Snippets

How do you prepare for settlement discussions? With over 90% of cases settling before trial, we would expect litigators to place substantial emphasize on settlement preparation.

Many litigators take the approach that preparing and developing issues for litigation/trial is tantamount to preparing for settlement discussions. It is true that understanding your trial position (strengths and weaknesses) will strengthen your settlement position. That’s because developing a strong no deal option (i.e., going to trial) allows you to realistically ask, and ultimately settle for, more in settlement discussions. But preparation for settlement discussions goes well beyond strengthening your no deal option. While litigators may use a strong walk away position as a pillar of their settlement strategy, a strong walk away position alone is not a complete strategy.

Many things go into preparing for settlement discussions. That preparation should be as thorough as preparing for trial itself. If you find yourself facing settlement discussions and feel that a review of your preparation method would be useful, reach out to Marc Menkveld for a discussion.

To learn more, or to get a conversation started, please contact Marc Menkveld at marc@menkveldlaw.com

When people decide to engage in litigation, much of the human component of dispute resolution is lost. Unlike litigation, mediation is human-focused. It’s subjective. Its aim is to achieve preferential outcomes and to satisfy the interests of the individuals involved. In mediation, parties may use the law as much or as little as desired. Litigation is focused on establishing facts and applying the law to those facts. If it works as intended, litigation removes much of the human component to achieve a more objective resolution – something that others in a similar situation can rely on later. There’s a place for mediation and litigation (and a combination of both). Often, though, you get to choose your path. Which do you prefer?

People often engage in litigation because they want to gain control of an undesirable situation. Making demands on the other side hasn’t worked. They feel that the only way to get the other side’s attention and to force them to engage is to initiate litigation. Unfortunately, this is often true. After all, if the demanding party hasn’t the will to take meaningful action to correct a wrong, then the other side has little motivation to respond to the demand.

Initiating litigation temporarily serves the purpose of getting control of a bad situation. But the result of staying in litigation too long is relinquishing control. People who are less experienced with litigation often underestimate the burden of the lawsuit that they filed. They may be countersued, required to sift through old boxes of documents, sit for depositions, and so on. What began as a means to correct a wrong deteriorates into a time- and money-consuming monster that is bent on keeping you awake at night. At the end of this cumbersome process, someone else, who likely doesn’t know or understand you at all, will decide your fate. They won’t account for how you or the other side feel about the situation, or what it is that you wanted to achieve in the first place. They won’t resolve the matter based on what you really want or how each side’s interests align. They will decide facts and then apply the law to those facts. You, the person, will most likely be cut out of the analysis. That’s how the law works.

If you want to bring the human component into your options for resolution, mediation is the best path. A good mediation session will include a deep dive into the components that animate the dispute. It will account for the history of the parties. It will incorporate emotions and ultimate goals into the process. In short, it will aim to find resolution based on the people involved. The law invariably works its way into mediation on some level, but it doesn’t need to (and probably shouldn’t) be the centerpiece. In mediation, people decide the outcome that is best for them. That’s control.

To learn more, or to get a conversation started, please contact Marc Menkveld at marc@menkveldlaw.com

What will you do if you don’t strike a deal at mediation? The common, and most obvious, answer to this question is, “we’ll just take the case to trial.” Seems simple enough. But, if trial is your Plan B should you not strike a deal, a full understanding of the costs and potential benefits of trial (for all sides) must be achieved. Without that understanding, the line between striking a deal and walking away will remain arbitrary, and options for resolution will be restricted.

Most litigators are familiar with the concept of the best alternative to a negotiated agreement, or the BATNA. Put simply, the BATNA is your best option if you don’t strike a deal with your negotiation counterparts. Your BATNA, i.e., your no deal options, may be better or worse than your deal options. Just because you have a BATNA doesn’t mean that it’s any good. Your BATNA may be downright terrible. Or, your BATNA may be excellent, in which case striking a deal with the other side may not be very attractive.

Understanding your BATNA, as well as the other side’s BATNA, is an immensely valuable undertaking prior to and during mediation. Lawyers tend to have an intuitive sense of their clients’ BATNA. They can fairly accurately assess the strength and weaknesses of their client’s case based on experience and a good understanding of the facts and law before them. This basic understanding is as far as many of us get before heading into mediation. And it’s usually not enough.

Understanding the BATNA is a thorough process that must account for the budget (the cost) and potential benefits of litigation. Many things outside of money must be considered to develop a good litigation budget: opportunity cost, actual cost, emotional cost, time, public relations, consistency with mission, and so on are all included in the litigation budget. Once your litigation budget is understood, an estimated return must also be understood. You must ask what you stand to gain if litigation goes well, and what you stand to lose if things don’t turn out as planned. This includes a good, honest assessment of legal and factual issues. This process should include an assessment of your client’s interests – i.e., what they really want (which warrants a post of its own). Once you conduct this exercise for both sides, you’ll have a decent understanding of the BATNA.

During mediation, your BATNA, and that of your counterpart, will evolve. If mediation is properly designed, you will develop a much better understanding of your counterpart’s litigation position and motivating factors (i.e., its BATNA). Deal options that are developed during a meaningful mediation session should be analyzed against your BATNA before a deal is struck. In this way, your client will have a good, full understanding of all options available and will be more likely to avoid the dreaded post-deal buyer’s remorse.

To learn more, or to get a conversation started, please contact Marc Menkveld at marc@menkveldlaw.com

What would you rather be doing? This is fair question to ask litigants, or anyone engaged in conflict, to consider. At our core, we are all generally the same. We have hopes and visions of how we would like things to turn out. I've yet to meet a person whose purpose is to enter into legal conflicts. That being the case, litigants and their lawyers should frequently assess whether continued legal conflict promotes, rather than erodes, a company's or a person's vision.

Businesses and the people behind them almost always have a vision of what they want to be, even if that vision is not well-defined. Rarely does a company envision its success as being pulled into litigation. So why would a business decide to litigate? If you dive into this question, the answer is often some variation of needing to correct a wrong through litigation to achieve a legitimate purpose. In other words, litigation is justified by the company vision. That's a fair answer. But it's just the starting point.

The danger arises when continued conflict begins to overshadow the reason litigation began in the first place. What began as a means of furthering a larger purpose can often become its own beast, untethered to the overall success of a company or person. This phenomenon often happens without notice. There is usually some catalyst or threshold of commitment that causes people to dig in their heels and define a new purpose of "winning" the dispute. This is where things go off the rails, and the goal of "winning" is elevated above true success.

To avoid that danger, litigants and their lawyers should frequently revisit the initial goal of litigation. They should reassess the risk and opportunities of litigation at various stages of a lawsuit, and compare that analysis to the vision/mission/purpose that must hold the primary position. The same should be done for settlement options. If settlement options exist that are better suited to promoting the overall vision of success, then continued litigation is most likely unjustifiable. Sometimes litigation is justified through trial, but that is not true for the great majority of disputes.

Asking yourself and litigants, "what would you rather be doing?" helps to get the focal point of a dispute where it belongs: On the vision that people work hard to achieve. Our mediation method is designed to inquire into the reason litigation began and whether it remains the best method of manifesting your purpose.

In mediation, it’s not uncommon for an all-around good deal to be rejected. The mediator sees the value of the deal; the lawyers see it too. But the parties can’t seem to agree on a final resolution. If the proposed deal is good, but no deal is struck, what’s going on?

We are people. People are emotional creatures. And it turns out that emotions heavily influence our decisions. Most of us like to think that our reason takes the primary position in our decision-making process, and that emotions play a distant secondary role. If you believe the work done by behavioral economics pioneers, Danny Kahneman and Amos Tversky, our automatic reactions (emotional, instinctive, etc.) drive most of our decisions. We then use our slower, more deliberative thought process to rationalize our emotional decisions, rather than to correct them.

Emotions manifest during mediation in multiple ways: Ego, sense of justice, anger, frustration, and so on. These emotions, unless fully vetted and addressed, often doom settlement discussions.

The common reaction for dealing with emotions offered by mediators and their counsel, is to simply ignore them. Parties are told to put their emotions aside, see the deal objectively, and are promised that they’ll eventually be able to live with the outcome. But the problem is that disputes often arise because of the emotional reaction to them. If there was no emotional response to a problem, there is often no dispute. Failing to resolve the emotional responses to disputes, even if the deal is eventually struck, leaves parties dissatisfied with the deal that they were forced to enter, and may redirect the parties’ frustration toward the mediator and counsel. Even worse, if the deal includes terms in which the parties will work together going forward, failing to address emotions can be catastrophic to the success of deal implementation.

In mediation, emotions should not be ignored or set aside. They should be dealt with directly, fully understood, and worked into the settlement process. Effectively dealing with emotions will help to clear the path to a settlement that will leave the parties more satisfied when the deal is inked. Our mediation process is designed to account for the parties’ automatic reactions to the dispute and to proposals made during mediation itself.

Ensuring a meaningful mediation begins with the structure of mediation itself.

Most mediation sessions begin with an offer or a demand, sometimes given after the parties provide brief presentations that resemble loose closing arguments. From there, participants often spend the rest of their valuable negotiating time attempting to bend key issues and concepts around their initial demands. This approach gets it backward.

As lawyers, we don’t begin preparing our clients for mediation by stating what we will ask of, or offer, the other side. Instead, we first explore the risks and opportunities of settling or going to trial through a vetting of key issues, interest, options, etc. Then, we use that analysis to inform and justify the options that we will present at mediation. The demands/offers/options that we present early in mediation make sense to us, because we’ve undertaken this analysis first.

But your opponents didn’t participate in your analysis. So, they will often view your early offers/demands as being unjustified or nothing more than an attempt to drop an early anchor to eventually settle upon some midpoint. This is why we often hear an early warning from mediators to not overreact to the other side’s first move – which often happens anyway.

Mediation should begin with a mutual vetting of key issues and negotiation concepts. Options should be discussed only after the parties understand – but not necessarily agree with – each other’s underlying rationale for taking certain positions (based on objective criteria when available). When this approach is properly incorporated into the mediation process, the parties are more likely to achieve a more satisfying result.

MLM takes a different approach to mediation, which was developed by top leaders in the fields of negotiation and mediation.