Viewing posts categorised under: Resolution-strategies

AN OFFER YOU SHOULDN’T REFUSE

After nearly four hours of mediation, the gap separating the parties had been reduced to $70,000. Defendant was not willing to make another move, but I sensed plaintiff still had room to negotiate. With the permission of counsel for plaintiff, I offered to present a Mediator’s Proposal for the parties to consider — an offer that counsel for defendant immediately refused, explaining that his adjuster had no interest in having me present a Mediator’s Proposal. Given defendant’s position, the mediation ended for the day.  

SHOW & TELL

Long before I ever contemplated transitioning from litigator to mediator, I learned a valuable lesson about the power of communicating “visually” in mediation – one I have never forgotten.

I was defending a real estate brokerage in a nondisclosure claim for which plaintiff was seeking substantial damages. Counsel for plaintiff requested an opening joint session, to which I agreed. Using an exceptionally well-constructed computer presentation, he proceeded to preview what he was planning to show and tell the jury in his opening statement if the matter proceeded to trial.  

FLYING BLIND

After mediating an interesting case last month, it struck me that mediators and air traffic controllers share something in common. Like air traffic controllers, mediators are responsible for managing the transmission of critical information to multiple parties, providing advice and guidance along the way to assist them in reaching their destination. Sometimes, as in the case I mediated last month, that may require taking an alternate route.  

YOUR JOINTS DON’T HAVE TO HURT

In less than ten hours, the Dodgers host the Astros in game 7 of what even this Cubs’ fan concedes may well be the Best World Series Ever! Ironically, instead of being home, I’m in Austin, Texas, attending the 2017 Fall Conference of the International Academy of Mediators.

Based on previous experience, one topic likely to generate significant discussion at the Conference — in addition, of course, to the World Series and the friendly rivalry between mediators from California and mediators from Texas — is the continuing reluctance of California attorneys to engage in joint sessions during the mediation process, in stark contrast to their colleagues from Texas, the rest of the country and around the world.  

KNEE-JERK REACTION

For the past ten days, the country has been embroiled in debate on social media and elsewhere over yet another divisive issue, i.e., whether NFL players show disrespect for the flag, the military and the country if they “take a knee” during the National Anthem. Whatever your position may be, there are valuable lessons to be learned from the back story concerning the relationship between Colin Kaepernick and Nate Boyer, a story which many people have not yet heard.  

THE SOONER, THE BETTER

The judicious and timely use of Statutory Offers to Compromise, pursuant to CCP Section 998, can be an exceptionally powerful tool. But when is the best time to serve a 998 Offer? The simple answer — at least for plaintiffs in personal injury actions and defendants in matters in which the prevailing party has a right to recover attorney fees — is the sooner, the better.  

TENDER LOVING CARE

[The following is an updated version of the July 2012 edition of Resolution Strategies]

In multi-party disputes, a tender of defense can be an instant game-changer when it comes to assessing risk and developing a cost-effective resolution strategy. All too often, parties who may be contractually obligated to defend and indemnify another party fail to recognize that their duty to defend may arise immediately upon receipt of a proper tender and may exist whether or not there is a later finding that indemnity is owed.  

EASY DOESN’T DO IT

[The following is an updated version of the September 2012 edition of Resolution Strategies]

After nearly four hours of negotiations, the parties were still more than a million dollars apart. Convinced that plaintiffs could not prevail on liability, defendants refused to offer more than a five-figure settlement in a wrongful death case. When presented with defendants’ last and final offer, counsel for plaintiffs remarked: “Well, that sure makes the decision easy.”

Given the economics involved, defendants had given plaintiffs no choice but to reject the offer. The case had been expensive for plaintiffs to litigate, with more than a dozen percipient witness depositions and the retention of numerous experts. After deducting costs and attorney fees, accepting the offer would have left a paltry sum for the decedent’s widow and two young children, whereas a jury would probably award substantial damages if plaintiffs were to prevail at trial. Recognizing they had little to lose by rejecting defendants’ offer, and potentially much to gain, plaintiffs decided to leave their fate in the hands of the jury — which ultimately returned a verdict in excess of $8,000,000!

If your objective is to reach a resolution, making the other side’s decision easy just doesn’t do it. Settlements are reached when decisions are difficult — when both sides fear the possibility of an outcome substantially worse than the proposed settlement. Unless plaintiffs demand less and defendants offer more than the other’s worst probable outcome, it will usually be an easy decision for one or the other — and sometimes both — to make.

Entering into a settlement is analogous to purchasing insurance. As with every insurance policy, premiums must be paid to insure against risk. For defendant, the premium to insure against the risk of an adverse verdict is to offer plaintiff more than defendant believes the claim is really worth; for plaintiff, the premium to insure against the risk of an adverse verdict is to demand less from defendant than plaintiff believes the claim is really worth. When one side demands an unreasonable premium from the other, as defendants did in the wrongful death case, the decision is easy.

Although it may seem counter-intuitive, the more difficult you can make the other side’s decision the easier it will be to reach a resolution.

As always, it would be my pleasure to assist you and your clients in the dispute resolution process. Please don’t hesitate to contact me if I can be of service.

Best regards,

Floyd J. Siegal

APPLES & ORANGES

[The following is a "new and improved" version of the June 2012 edition of Resolution Strategies]

In one of my favorite books on negotiation, “The Science of Settlement: Ideas for Negotiators,” Professor Barry Goldman devotes 64 of his 167 pages to the topic of “bargaining confounds,” which he describes as the “psychological factors that can enter into our negotiations and screw up our results.”

One of the bargaining confounds he examines is the concept of “reactive devaluation,” which he defines as “the tendency to undervalue or reject a negotiation proposal, irrespective of its merits, because it is perceived to come from the enemy.” In other words, we automatically assume that any proposal made by our negotiating opponents must be bad for us because it is presumably good for them.  

DIVIDE & CONQUER

[The following is a "new and improved" version of the November 2011 edition of Resolution Strategies]

More than nine years ago — in the very first edition of Resolution Strategies, titled “THE ART OF NEGOTIATING: PAINT WITH NUMBERS” — I noted that “every demand or offer you make will be analyzed . . . to deduce your negotiating strategy. Be mindful, therefore, to choose numbers that paint the picture you want the other side to see.”

In order to choose numbers that paint the picture you want the other side to see, it will help to plot out your negotiating strategy in advance. When you do, don’t underestimate the value of using basic arithmetic — especially simple division — to design an effective strategy.  

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