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The One Thing You Can Control in Negotiation

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Here’s a basic fact of life. People like to feel in control, whether it’s at their workplace, at home, or in a negotiation. But we are seldom in sole control of any of those situations, and that’s how disputes arise and continue. Though the result of a negotiation is not completely under your control, your preparation is.

Start by defining the pivotal issues. There are seldom more than five, usually just one or two. Determine the specific range of results your side needs to bring the matter to conclusion.

Imagine the circumstances from your opponent’s point of view. Be specific. What is the hot button? It’s usually not just money. The emotional or reputational costs as well as the financial drain of drawn-out proceedings may be factors. Many litigants feel they have been disrespected. Sometimes a carefully worded apology goes a long way towards bridging a negotiation gap. What does this person really need?

It Takes More Than Two
Bringing everyone together for mediation shows a serious intent to resolve the dispute. Make sure the real decision-makers are attending. That might be a corporate higher-up like a claims manager, but it might also be a family member.

Using the mediator as a buffer between parties can magnify the effectiveness of your message. Your opponent may have brushed off your arguments before, but will listen to them when they come from the mediator.

You cannot completely control a negotiation. The opposing party could surprise you in a number of ways. Your own client may surprise you. But thorough preparation will help you manage a negotiation. You are the one person you know you can control.

Was King Solomon Right?

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Judgment of Solomon – Nicholas Poussin

Pretty much everyone knows the bible story about King Solomon. Two women claimed they were the mother of an infant after a different child had died. Solomon ordered the baby to be split in half and divided between them. One woman agreed; the other would rather abandon her claim. Solomon then knew that the one who put the baby’s welfare ahead of her own interests was the true mother.

Splitting the Baby
Attorneys and claim professionals complain about judges who decide cases where it appears the result does nothing more than equally divide the difference between the parties’ positions. Complaints about “baby-splitters” are loudest when the defendant or employer maintains no money should be awarded at all.

Pay Attention to the Midpoint
In mediation, the parties are in control of the outcome. As mediator, I facilitate the negotiation, gradually narrowing the negotiation gap until the parties can agree on terms to resolve their dispute.

Each demand and offer sends a message. Smart negotiators pay attention to how the midpoint changes with each round of negotiation. Cases do often resolve at the midpoint between the first reasonable settlement proposals.

Some negotiators start with an extreme position intended as an anchor. Anchoring communicates what your ballpark is. However, if the proposal is so unreasonable as to be ridiculous, no one will take it seriously, and the midpoint is not predictive.

Is There Ever A Time to Split the Baby?
When the negotiators’ positions are close, they may agree to split the difference. Often cases settle near but not exactly at the midpoint to avoid the appearance of a baby-split.

Sometimes the parties would accept a compromise at the midpoint, but are unwilling to let the opponent know this because they fear the disclosure would not resolve the dispute. When I see a likely resolution that the parties are not willing to put on the table themselves, I may make a “mediator’s proposal.” My proposal rarely suggests an even split, but like Solomon’s suggested result, it does resolve the dispute.

COVID-19 IS MESSING THIS UP, TOO

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HOW CCP 599 HELPS AND HURTS

Due to the pandemic, very few cases are being tried. Reports from the legal community indicate that the absence of an imminent trial date is inducing parties to put off settlement as well.

A History of Procrastination
Lawyers have always seemed to have a reason why it’s too early to settle a case. They need to get another report, look under every rock for new information, research the heck out of every issue whether or not it is pivotal. Traditionally, discovery cut-offs and upcoming trial dates have put up a big stop sign to that process in civil cases. Without that stop sign, some workers compensation cases continue for decades.

Human nature being what it is, litigants tend to wait to the last minute to undertake the tasks necessary to close a case. The global pandemic has aggravated our proclivity to procrastinate.

When do cases settle? Legal and claims professionals have always referred to the ubiquitous last-minute settlements as happening “on the courthouse steps.” As trial dates get pushed further and further back on courts’ calendars, parties put off settlement longer.

CCP 599 Makes Procrastination Easy
When the global pandemic forced courthouses to close their doors, the California legislature recognized the obstacles to litigants’ ability to move their cases forward. The response was Code of Civil Procedure 599. This new section delays most civil litigation deadlines during the official COVID-19 state of emergency and for 180 days thereafter. If a deadline had not passed by March 19, 2020, the continuance or postponement of a trial date extended that deadline. That includes discovery cut-offs and dates for identification of expert witnesses and motions for summary judgment. Notably, the court retains the power to order litigation deadlines. Parties can also agree to self-impose deadlines which would otherwise be suspended.

At the beginning of the pandemic, no one had any idea how long this suspension would last or how we would all learn to conduct much of the court’s business remotely. Still, 599 remains in place. Some lawyers and claims professionals report that the absence of a hard deadline has resulted in fewer settlements.

Blessing or Curse?
In the last year, we have learned to manage litigation pretty well without setting foot in the courthouse. Doctors have resumed seeing patients. The suspension of many hard deadlines provided breathing room while we figured it all out. These are blessings.

On the flip side, cases are backing up. After courthouse life returns to a version of normal, it will take a long time to work through the backup. Once 599 expires, there will be a rush to undertake long-delayed tasks critical to settlement. Things could get kind of crazy, and that’s the curse.

What to Do Now
Before any more time passes, look at those files to see what can be done to set them up for settlement. Almost all mediations are now occurring remotely. Let’s settle those cases promptly, so you can better manage your caseload once the state of emergency is lifted.

A Real Life Lesson Why It’s Almost Always Better To Settle

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LaQuan Tremell Taylor’s injuries were horrific. The 27-year-old veteran, was robbed, carjacked, and shot in the parking lot of a Kroger grocery store in Atlanta, Georgia. After three weeks in a coma, roughly a year in the hospital, multiple surgeries, and millions of dollars of treatment, plaintiff’s spinal cord injury left him a partial paraplegic with scars over his entire body and continuing pain. Kroger was the primary defendant in his suit for the store’s negligent failure to maintain adequate security.
Kroger’s insurance stacked thusly:
$3,000,000 self-insured retention (SIR)
$2,000,00 ACE American Insurance Company.
$25,000,000 Starr Surplus Lines Insurance Company
$25,000,000 Great American Insurance Company Of New York
Excess above Great American: XL Insurance America and Chubb Group of Insurance CompaniesPlaintiff’s pre-trial demands were within Starr’s coverage limit. But Starr refused to settle. The final judgment exceeded 61 million dollars. It appears that Starr did not attempt to mediate a settlement until after judgment was enteredNotwithstanding its ill-advised choice, Starr refused to pay more than its policy limit to satisfy the judgment. Great American settled the case and on February 11, 2021 sued Starr for reimbursement. The complaint for declaratory judgment alleges that Starr had acted in bad faith and was “stubbornly litigious.” Great American has asked for reimbursement of its settlement contribution plus attorney fees and expenses.

I see many cases that, like the Taylor case, clearly have the potential to “blow up.” Cases settle when parties are willing to spend the necessary time in good faith mediation and make reasonable settlement proposals. When parties are “stubbornly litigious”, the results can be disastrous.

And Then There’s . . .
In workers compensation cases, being “stubbornly litigious” can mean denying requested medical treatment. Often, though, alternative treatments end up being more expensive in the long run. Patients who cannot get treatment through the usual process sometimes end up in emergency rooms, incurring a much larger bill.
 

Authorizing a quick, “expensive” treatment can lead to early claim closure and a less costly claim overall. Sometimes the injured worker ends up undergoing the procedure which was originally requested anyway. And don’t forget the administrative expenses of utilization and bill review.Patients aren’t doctors. Patients are not writing the Requests for Authorization. Almost every patient will prefer conservative treatment to life-threatening surgery. Sure, there are malingerers and patients who exaggerate their pain in the hope of scoring heavy-duty medication or just gaining attention. And, yes, some doctors overtreat to increase their fees. Independent doctors, claims personnel, and defense attorneys have heightened their awareness of those patterns.

Don’t lose sight of the forest for the trees. Like Starr Surplus Insurance, a “stubbornly litigious” stance can end up costing you more in the end.

The Smartest Thing to Do in Mediation

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W-A-I-T: these four letters remind you to ask yourself Why Am I Talking? Silence is often your most effective negotiation technique.
 

Silence has two big benefits
The first benefit of silence is to be better able to respond. Too many people come to mediation with their attitudes so entrenched that they don’t listen. You cannot successfully respond if you have not listened—really listened—to the opposing party.

Do not multi-task. During a remote mediation on your laptop, no one may be able to see you scrolling on your phone. But you are cheating yourself of the opportunity to collect information to help you conclude the case. You can miss something important if you’re not paying attention.

Lose the condescension. If you come to mediation with the attitude that your side is righteous and the other side’s views are valueless so you don’t have to pay attention to them, the initial obstacle to reaching settlement is yourself.

The second benefit is that if you just stay quiet, the other party may rattle off information to fill the silence void that damages their own case.

Listen First

Lawyers in particular are prone to thinking about what to say next instead of taking heed of what’s happening in the moment. It’s why they can miss asking the follow-up question a deponent’s answer should have prompted. And it’s why they ignore signals that would help them settle their case.

As your mediator, my job is to recognize those missed signals and follow up with the participants to facilitate settlement.

Align Thoughts, Words & Deeds to Get Results

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Having trouble concentrating? Affected by shelter-in-place orders to contain the COVID-19, overlaid with curfews activated by civil unrest following the death of George Floyd? Join the club.

For some cases, nothing is urgent right now. It’s easy to leave those cases on autopilot.

What you focus on is what you get. If what you really want is to avoid the expense and stress that go with delaying case resolution, you need to align these:

Thoughts: Concentrate on one, just one, file and put together an action plan in your mind specifically what you can do right now to bring it to resolution. That may well be mediation. Do you really need that pending deposition when everyone knows pretty much what that witness will say? How about trying to resolve the case now without it?

Words: Document the plan, and communicate it to everyone needed to effect it. Tell your lawyer what you want to happen next. Contact opposing counsel to explain your plan. Set deadlines.

Deeds: Don’t slip back to inaction. Too many so-called action plans are never implemented. Calendar a follow-up date to make sure your plan is moving forward.

People prone to procrastination find that forcing themselves to action on one matter prompts them to tackle another and another. Taking ownership of a situation is challenging. It takes courage. It’s the way to get the result you want.

The Role of Empathy in Settlement

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Empathy, the ability to see a situation from a different point of view, is an important negotiation and advocacy skill. You must be able to anticipate and understand your opponent’s position to effectively counter it. Debate trainers assign students to argue the position opposite their personal beliefs to foster this skill.
I’m Fine. To Hell With You
Lately we have seen a stunning lack of empathy in our country. On the same day as a county announced that COVID-19 had become the county’s leading cause of death, one resident yelled, “It’s my body and I want to go to work.” Another defiantly asked, “Why shouldn’t I be able to sit in a restaurant and eat?”

The answer is that many people, perhaps the majority, who are infected with the virus are asymptomatic. COVID-19, unlike collisions, drownings, obesity, heart disease, and cancer, is wildly contagious. There is currently no vaccine and no cure. More than 81,000 Americans have died. Around the world, people are not allowed to work in close quarters or sit in a restaurant because that potentially exposes coworkers, servers and other customers to the contagion. Not everyone reacts to the virus the same way.

Similarly, the television journalist who tweeted that anyone who wants to continue to shelter in place should just stay home lacks any awareness of how most people live. If the boss requires workers to show up or lose their jobs, those workers don’t have the luxury of working from home. There are more people living paycheck-to-paycheck to pay the rent and buy groceries than people pulling in big bucks.

And then there’s the 79-year-old Wisconsin Supreme Court Chief Justice who said “regular folks” were not getting COVID-19. Got that, anyone with a family member in a nursing home?

Negotiators need not have suffered a serious injury or business reversal themselves to empathize with someone who has. Perhaps you have had a personal experience which makes you wonder why your negotiating opponent is apparently so much less resilient that you. Again, not everyone reacts to an event the same way. An inability to concede that these are that person’s feelings, even if you think they are baseless, impedes meaningful settlement discussions.

Mediator As Filter

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There’s a lot of interest lately in filtering out bad stuff. Of course, we use filters all the time: air filters in the ceilings in our houses, filters to keep the coffee grounds out of our drinks, water filters to improve the stuff that comes from our faucets, filtered cigarettes— well, you get the idea.

Think about this. Your negotiations aren’t leading to resolution because of the absence of a filter. A big part of what a mediator does is filter messages between disputing parties.

Self-Filters Don’t Lead to Resolution
Negotiators shape their message to achieve their goal. They might threaten. They might withhold critical information. Negotiators seldom admit the flaws in their position; they’ve filtered those out to make their case look as strong as possible.

In mediation, parties have the opportunity to let their guard down. One of the most powerful features of mediation is caucusing. In caucus, only one side meets with the mediator. By statute, everything that is said is confidential. The mediator cannot disclose anything unless you authorize that disclosure. She cannot be subpoenaed.

Confidentiality promotes candor. Parties can stop filtering their message and discuss the good and bad points of the case with the mediator. Here’s your chance to discuss the case with a professional neutral who can help parties identify the issues and resolve them.

Reframing
Mediating parties make demands and offers, and the mediator conveys them to the opponent. Part of this process often includes the mediator reframing the message to filter out animosity or extraneous issues. The mediator is using her own filters to enhance the likelihood of settlement. This focuses the parties’ attention on what is important for settling the case.

Posturing
Even in caucus, some attorneys will grandstand in an attempt to assure the client of their support, no matter how unreasonable the client’s position.  An experienced mediator understands the dynamic and how to use it to resolve the case.

Maybe you think your opponent is the biggest jerk in the world. In mediation, the mediator can filter out that attitude to get your case settled.

Mediation During the COVID-19 Shutdown

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Mediation Is Critical Right Now
Courts are closed. Attorneys and claims professionals are working from home as best they can. But disputes continue. If an employer is responsible for a claimant’s medical care, delivering that care during a “Shelter in Place” order is a challenge. How a dispute is handled now can determine how the case will proceed in the long term.

Because courts are closed, litigating parties should make an extra effort to resolve disputes through negotiation. However, when they are unable to do so, agreeing to mediate is the best alternative. Issues subject to mediation can include conflicts usually resolved by motion, discovery disputes or entire cases. You can contact your mediator of choice by phone or text at 310/889-8165 or by email. She will take it from there.

Two mediation options are available during the shutdown.

Mediation by Video
Your mediator can conduct a mediation while everyone remains at home through several applications, including Free Conference Call, Zoom, or Legaler. This can happen quickly– as soon as parties agree on a time and electronically send the mediator their mediation statements so she knows the basic outlines of the dispute.

Scheduling an In-Person Mediation
If parties insist on an in-person mediation, the time to schedule that is now.

Once courts and mediation venues re-open, scheduling will be a mad dash to secure an available time. Cases already on the court’s calendar for a future date have first priority, pushing litigants with disputes cresting now further back.

In contrast, cases with a date already on the mediator’s  calendar will get first chance for any other date if circumstances allow an earlier date or must be further delayed.

You may be feeling frustrated as you see the conflicts mounting in your email inbox. There is a solution available right now: mediation.

New Law on Settlement Agreements

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A new California law effective January 1, 2020 governs settlement agreement language regarding employment dismissals and rehires. An employer and employee can still agree that a settlement includes termination of employment, but the agreement cannot include language that the person is barred from re-employment.

The legislative history of AB749 shows that the motive behind the law was to prevent situations where a sexual harasser remains employed by a company, but the victim can’t get back or hang on to a job. Here’s the language:

“An agreement to settle an employment dispute shall not contain a provision prohibiting, preventing, or otherwise restricting a settling party that is an aggrieved person from obtaining future employment with the employer against which the aggrieved person has filed a claim. . .”

The law specifically allows termination of a current relationship. Also, the law explicitly states that an employer need not re-hire someone when “the employer has made a good faith determination that the person engaged in sexual harassment or sexual assault” or ”there is a legitimate non-discriminatory or non-retaliatory reason for terminating the employment relationship.”

If It’s Not a Sexual Harassment Case?
This law applies to all claims brought by an employee against an employer in any forum, including mediation, arbitration or other internal process. When an injured worker has not returned to work for years, their employment status in certain situations could still be technically “employed.” To clarify that the injured employee cannot access employee benefits, a settlement agreement may include language defining the date of termination of employment or might specify that the employee is resigning.

I have helped create a settlement where status as an employee was reinstated for a minimal amount of time with the proviso that the employee was resigning on a specific date. I have also helped create settlement agreements where the employee was paid as an independent contractor for a limited period.  This will be more difficult now after passage of AB5, also going into effect on January 1, 2020, which tightens the definition of who is an independent contractor.

Settle, Settle, Settle

It’s almost always better to settle than to keep pouring money into litigation. A trained settlement professional can help you negotiate the best result.