Summer 2016, Vol. 21, No. 4
TABLE OF CONTENTS
_________________________________________________________________________________________________________
Articles »
Eight Common Mistakes in Mediation and How to Avoid Them
By Jennifer B. Grippa
Improve your chances of a successful mediation.
A Primer on the Tax Consequences of Settlement Payments
By Julia Mandeville Damasco and Margaret Trollan
Proper drafting of settlement documents is important, as the language used can impact your client's tax
consequences.
Questions Every Litigator Should Ask about Mediation Confidentiality
By Rachel K. Ehrlich and Emily E. Garrison
Consider what the confidentiality agreements may not protect and how they may affect future
proceedings.
Practical Considerations for Mediating Complex Cases
By Jane I. Milas
Carefully structure mediation of complex cases for a successful outcome.
Collaborative Negotiation Techniques: Three Practice Tips Backed by Social Science
By Tracy Hughes
Following this advice can lead to a mutually beneficial, interest-based resolution.
Why Negotiate? In-House Counsel Explains Three Key Benefits for Clients
By Natalie Fabian
It allows both sides to air grievances, provides a baseline of the other side's evidence and theories, and
requires fewer resources than litigation.
Five Terms to Consider When Negotiating Settlement Agreements
By Julie Pettit and Jnana Settle
Address deadlines, tax and credit consequences, penalties for breach, attorney fees, and release of
claims when drafting the settlements.
Using Meditation Techniques to Succeed During Stressful Negotiations
By Kaitlyn M. Murphy
The neurological benefits of meditation can help you keep your cool in stressful negotiations with
opposing counsel.
An Interview with Judge Gail Andler about Class Action Settlements
By Jessica Scott
A California trial judge shares her insight into the unique considerations associated with settling class
actions.
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Practice Points »
Six Tips to Stay Connected to Your Professional Network
Maintaining a strong network is advantageous for future opportunities.
More Women in the Judiciary Means Justice for All
Critical mass for change begins around 20 percent.
Words of Wisdom »
What advice would you give a young lawyer who will soon participate in his or her first mediation?
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 2 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
ARTICLES
Eight Common Mistakes in Mediation and How to Avoid
Them
By Jennifer B. Grippa – September 8, 2016
Litigators often underestimate the power of mediation. Mediation can be incredibly valuable, not
only as a tool to settle disputes, but also as a mechanism to assess risk, view evidence from a
different perspective, size up your adversary, and get a neutral third party’s insight into the
strengths and weaknesses of your case. As a mediator, I frequently see litigators squander the
opportunities that mediation presents by making mistakes that can impair chances for settlement
and make the mediation process longer and less efficient than it otherwise could be. Learning
from these common mistakes can help you better prepare for mediation, avoid derailing
settlement, and create the most value for your time.
1. Preparing Insufficiently
Not to sound cliché, but it is true—preparation is the key to success. Prepare for mediation as
you would any other hearing. Know your facts inside and out, and be prepared to substantiate
your legal and factual positions. The more information you have, the more useful the mediator
can be to facilitate a resolution. Many lawyers make the mistake of not having a thorough grasp
of the timeline of events, material witnesses, or law relative to an important issue in dispute.
They end up spending time during the mediation digging through documents looking for
information or making calls to obtain evidence or understand the facts. This is not an efficient
use of time or your client’s money. If you confuse the facts or are unable to address your
adversary’s arguments, your opponent (and your client) are going to sense weakness. Being well
prepared will give your client confidence in your legal capabilities and send a message to your
adversary not to underestimate you.
2. Relying on Summaries Rather Than Evidence
Have the key documents to support your case with you. Believe it or not, I have frequently seen
lawyers make the mistake of coming to mediation without the “smoking gun” documents, which
they left at the office. Having those documents in hand gives the mediator the ability to use them
to advance settlement discussions. There is also a psychological impact in having that key piece
of evidence physically in front of your opponent during private caucuses with the mediator.
Merely relying on summaries, saying you have the records, or describing what the evidence will
show is less persuasive. If you have a key piece of evidence or witness testimony that is material
to the case, have it with you.
3. Failing to Set Appropriate Client Expectations
Some lawyers make the mistake of coming to mediation without preparing their clients. Talk
with your client about the process in advance. Make sure the client knows how long it could take
and that there will be down time during the mediation. Too often clients show up completely
unprepared to spend more than an hour or two negotiating, or are offended and discouraged by
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 3 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
initial offers. Depending on the complexity of the issues, the parties’ respective mindsets, and
how the parties differ on a resolution, mediation could take the better part of a day or more.
Setting expectations in advance will make for a more content and less anxious client.
It is equally important to set your client’s expectations for success. As always, it is far better to
underpromise and overdeliver. Do not make the mistakes of emboldening your client or being
overconfident yourself. It is hard to backtrack later if things do not turn out as well as you had
hoped. Leave room to negotiate. If you have set expectations low, clients are much more tolerant
when confronted with bad facts or impractical offers during mediation.
Consider using the mediator to keep client expectations in check. In a private caucus, a mediator
can help your client understand the risks of trying the case, without your client’s perceiving you
as not believing in his or her case or not being a fierce enough advocate. Depending on the type
of case, mediation can be emotional for clients. Rehashing events, quantifying damages, and
finding a way to resolve the conflict can be a painful process. If you have prepared your client to
keep an open mind, to listen, and to be receptive to potential weaknesses in his or her case, your
client will have a higher level of satisfaction with the mediation process even if the case does not
ultimately settle.
4. Talking Too Much
Most litigators like to talk. And some like to hear themselves talk. A common mistake of
litigators in mediation is to spend more time talking than listening. There is a lot to be gleaned
during mediation if you listen. Hearing the other side’s version of events may reveal facts or
legal arguments you had not previously considered. What you thought was a minor piece of
evidence or immaterial witnesses may become more critical once you learn about your
adversary’s strategic position. Listening—and viewing the case from your adversary’s
perspective—could change your strategy or shape your approach to a potential settlement.
5. Ignoring the Knowledge Gap
Remember that your mediator has not been living with the case for months as you have. Laying
out the material facts in a presentation or outline will help your mediator. Make sure your
presentation is well organized and concise. A power point presentation or outline is especially
helpful if the parties have not prepared premediation statements.
6. Forgetting the True Stakeholders
Remember your audience. I have often seen lawyers address only the mediator or their opposing
counsel during the mediation. The person you should be addressing is the opposing party or the
insurance adjuster. Do not lose sight of who holds the purse strings or who is the ultimate
decision maker in the room. You are not there to convince the mediator or opposing counsel of
anything. Showing respect and finding a way to satisfy the needs of the decision maker will go a
long way toward resolving the dispute.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 4 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
7. Being Too Adversarial
Remember: mediation is not a trial. While you want to be as prepared as you would be for a
hearing, mediation is not a forum for posturing, aggressive advocacy, or hostility. I have seen
young litigators make the mistake of coming to mediation with guns blazing—making opening
statements that are emotional, antagonistic, and divisive. Rarely does this have the effect of
convincing the other side that they are wrong and your side is right. Instead, it only serves to
drive the parties further apart and to make settlement even less likely. Mediation is not the place
to prove your case or convince anyone of anything. When you make statements in a joint caucus,
be mindful of your tone and choice of words. What you say and how you say it can impact how
the opposing party perceives you and your client, alter your opponent’s willingness to make
concessions throughout the mediation process, and influence your own client’s expectations.
8. Being Too Personally Invested
Litigators do a disservice to their clients when they are unable to distance themselves from the
case emotionally, and thus incapable of assisting their clients in making good decisions. While
client advocacy is important, remember that this is not your case and not your problem. It is one
thing to be sensitive to your client’s situation, but some lawyers can go too far and contribute to
a client’s fragile state. Do not let your personal opinions sway your clients’ decisions or impair
their ability to consider settlement options. Keep a clear head so you can best advise clients in a
manner consistent with their own best interests.
Avoiding these common mistakes can improve your chances of a successful mediation. And
regardless of whether the case settles, the more prepared you are and the more efficient the
process is, the happier your client will be in the long run.
Keywords: litigation, woman advocate, mediation, settlement, negotiation, common mistakes
Jennifer B. Grippa is a mediator with Miles Mediation and a partner with Miller & Martin PLLC in Atlanta,
Georgia.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 5 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
A Primer on the Tax Consequences of Settlement Payments
By Julia Mandeville Damasco and Margaret Trollan – September 8, 2016
The tax character of payments made in settlement of legal and equitable claims directly impacts
the value of settlement dollars, making tax implications important to all advocates. Those
implications are often within your control, because the language of a fee agreement, complaint,
settlement agreement, or judgment is an important factor driving the tax consequences of a
settlement payment.
In United States v. Gilmore, 372 U.S. 39 (1963), the Supreme Court held that the origin of the
claim controls the tax treatment of any resulting recovery, whether received pursuant to a
settlement or a judgment. Id. at 49. When a payment represents more than one type of recovery,
however, the U.S. Tax Court has held that the allocation among recovery categories in a
settlement agreement itself is generally binding for tax purposes to the extent that the parties
entered into the agreement in an adversarial context, at arm’s length, and in good faith. Where
the intent of the parties is not articulated, however, the default tax characterization based only on
the claim is often not desirable. The bottom line: drafting is important, not only because you
should be aware of the tax consequences of a particular settlement for your client, but also
because settlement dollars are worth more to a plaintiff when they are excluded from income or
enjoy a tax preferred status.
A full-scale explanation of all tax consequences associated with settlement payments is far
beyond the scope of this article. Instead, this article outlines some basic tax issues associated
with settlement payments to make you aware of how complex these issues can be.
Characterizing Recovery Payments Based on the Origin of the Claim
Whether a settlement payment made to cure an alleged harm—i.e., a recovery payment—
qualifies as taxable income depends on the type of legal or equitable claim that the payment is
designed to redress. For example, wages are the presumed tax character of payments made to
settle most employment-related litigation, and exceptions to this general rule are construed
narrowly. Given this general rule, other components of recovery must be overtly identified in a
settlement agreement, judgment, or similar document, and evidence in the record is required to
support an exception created by the parties’ express allocation. Importantly, payments that would
have been tax preferred if made according to the rules establishing the tax preference are not tax
preferred when made to resolve a dispute about the failure to make the payment. Payments that
lose tax preferred status include retirement plan contributions and employee expense
reimbursements. Recent attempts to secure contrary rulings suggest that the IRS will continue to
cite LTV Steel v. United States, 215 F.3d 1275 (Fed. Cir. 2000), as authority for such a wage
characterization. A close reading of LTV Steel suggests narrowing the scope of payments treated
as wages, but the IRS has not yet accepted that interpretation.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 6 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
In contrast to recovery payments in employment cases, recovery related to a claim involving a
capital investment is usually a return of capital and is not reportable as taxable income. As a
result, there may be tax benefits associated with allocating settlement dollars as associated with
damage to a capital asset, the return of mortgage interest (assuming the mortgage interest amount
was not originally included as an itemized deduction), and/or general damages for a violation of
a banking law or a civil right. Specifically, these allocations will serve to increase the value of
settlement dollars flowing to recipients and reduce administration burdens in a class or
enforcement case. Proper drafting substantially impacts the tax result in mortgage practices,
securities, and other litigation involving capital assets and investments, as seen in IRS Revenue
Ruling 2014-2. The positive result for the borrowers in the National Mortgage settlement
explained in that ruling was made possible by the parties’ artful drafting.
In personal injury cases, settlement money received “on account of personal physical injuries or
physical sickness” does not qualify as taxable income. See I.R.C. § 104. Indeed, even a
settlement payment associated with emotional distress will not be taxable as long as that distress
flows from a physical injury. The nuance associated with emotional distress–related payments,
however, requires attention. Complex timelines and fact patterns provide an opportunity equally
advantageous to plaintiff’s and defense counsel to allocate specific dollars to specific time
periods. For example, a period of time where unwelcome touching caused no physical injury but
did cause emotional distress and a period of time where a subsequent assault caused physical
injury, emotional distress, and medical expenses should be expressly distinguished in settlement
documents for the best tax outcome. It is better to articulate the allocation in a settlement
document than to leave it up to the IRS.
Characterizing Interest Payments
Interest is always income. In West Virginia v. United States, 479 U.S. 305 (1987), the Supreme
Court held that notwithstanding the authority of the courts to award prejudgment interest as an
item of damages, its nature as “interest” remains constant. Id. at 310. Treating interest as income
does not necessarily result in a negative tax outcome, however. In a case where 1,500,000
members of a class receive a payment composed of ordinary income and interest income, the
1099 reporting thresholds may operate to reduce the number of tax reporting forms required and
thereby reduce the administration costs of the settlement by dividing each payment between
income reportable on a 1099-MISC and a 1099-INT. If the reporting threshold is not reached for
one or both of these forms, then no reporting is required. A similar result is reached with greater
impact on the value of settlement dollars where recovery is allocated between wages, 1099MISC income, and 1099-INT income.
Characterizing Attorney Fees Payments
Attorney fees paid by a third party are generally considered reportable income to the plaintiff
and the attorney. See I.R.C. § 61; Comm’r v. Glenshaw Glass Co., 348 U.S. 426 (1955); Old
Colony Trust Co. v. Comm’r, 279 U.S. 716, 723 (1929); Banks v. Comm’r, 345 F.3d 373 (6th
Cir. 2003); Banaitis v. Comm’r, 340 F.3d 1074 (9th Cir. 2003); Sinyard v. Comm’r, 76 T.C.M.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 7 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
654 (1998), aff’d, 268 F.3d 756 (9th Cir. 2001). Some cry double reporting and double taxation
because in many cases, the result is that the fee payment is taxed twice or almost twice.
Two exceptions exist to the general rule that attorney fees payments are income to the client.
First, attorney fees are not income where the underlying recovery payment is not taxable, such as
physical injuries under I.R.C. section 104. Second, money paid to compensate class counsel from
a common fund is not income to the class members in an opt-out class action. In 2002, IRS Chief
Counsel Advice 200246015 specifically explained that legal fees paid directly to class counsel
are not income, profits, or gain to a taxpayer if: (1) the taxpayer does not have a separate
contingency fee arrangement with the class counsel, and (2) the class action is an opt-out class
action. The IRS emphasizes that the inquiry turns on whether an individual class member has an
enforceable fee agreement with class counsel but informally acknowledges this as an unsettled
area of law.
In actions based on civil rights or employment claims, a taxpayer may take a deduction for an
attorney fee award attributed to the taxpayer as income in determining his or her adjusted gross
income irrespective of whether the taxpayer itemizes deductions or takes a standard deduction.
The attorney fee is also deductible for alternative minimum tax purposes. The fee attributed to
the taxpayer is no longer treated as a miscellaneous itemized deduction, and there is no other
adjustment or preference that would require the fee to be added back.
Given the generally taxable nature of attorney fees payments, recipients of such fees frequently
attempt to delay their receipt. The IRS, courts, and state bars have created rules governing
attorney fees payments structured for that purpose. Among those rules, the rules articulated in
Childs v. Commissioner, 103 T.C. 634 (1994), remains the leading authority. The IRS has
summarized the holding in Childs as follows: “[W]here attorneys entered into a structured
settlement which called for deferred payments of their fee, and the settlement was entered into
prior to obtaining an unconditional right to compensation for their legal services, the court held
that they had not constructively received income upon the purchase of the annuity contracts
meant to provide payments for the legal services fee.” Field Service Advice 200151003 (July 5,
2001) (emphasis added).
Under Childs, the correct way to defer the income realized as a result of a fee award is quite
simple: Counsel must enter into an irrevocable agreement for periodic payments, or the court
must issue an order that requires periodic payments of counsel’s fee; and the settlement must be
entered into or the order issued prior to counsel’s obtaining an unconditional right to
compensation for his or her legal services. The timing matters.
Reporting Requirements
There are new rules about reporting payments and requesting information. Generally, payments
made to corporations are excluded from 1099 reporting unless they are medical and health care
payments, attorney fees, gross proceeds paid to an attorney, or other specified payments. The
Internal Revenue Code no longer allows for an “eyeball” test for determining which entities
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 8 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
qualify as corporations for the purpose of the corporate reporting exemption, however. That is, a
payer may no longer rely on the name of a corporation for purposes of applying the corporate
exclusion from 1099 reporting. A payer must request W-9 forms from corporations and may only
exclude payments to them based on their status as a corporation if a valid W-9 form is received.
There are other new rules beyond the scope of this article. A good practice is to request W-8 or
W-9 forms from all recipients of payments.
Collecting information from recipients of payments raises issues beyond tax compliance. In
order to comply with the proper reporting of payments flowing from settlements and judgments,
it is necessary to collect personal information. All of this information is also personally
identifiable information (PII). The United States has no omnibus federal law regulating the
collection and use of personal data; rather PII protection is regulated by many different laws. For
example, the Federal Trade Commission Act prohibits unfair or deceptive practices and has been
applied to offline and online privacy and data security policies. The Financial Services
Modernization Act (Gramm-Leach-Bliley Act) regulates the collection, use, and disclosure of
financial information. And the Health Insurance Portability and Accountability Act (HIPAA)
regulates medical information. Be aware of federal and other state laws that regulate the use,
storage, and collection of PII in the settlement context. Best practices include the following:
1. Require secure storage of information in a location subject to the jurisdiction of the
United States for U.S. cases.
2. Protect from disclosure the information that is not required to effect the payments.
3. Protect the data during electronic transmission.
4. Provide for the secure and documented destruction of data.
OFAC Requirements
Making payments requires activities beyond tax compliance and protecting personal data. The
United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) is charged
with ensuring that payments made in any circumstances follow the United States’ current
sanctions policies. OFAC requires all entities involved in settlements—law firms, attorneys,
individuals, insurers, and settlement funds—to comply with OFAC regulations. This means that
names of payment recipients must be compared to OFAC’s “Specially Designated Nationals”
list.
Examples to Illustrate Tax Issues
Example 1: Let’s assume that the defendant agrees to pay $1,000,000 to the plaintiff in
exchange for an unconditional release of the plaintiff’s claim for unpaid wages, interest,
penalties, and attorney fees and costs. In this case, the underlying claims and statutes
provided for waiting time penalties and interest on any claim for unpaid wages.
Under the terms of this settlement, the failure to allocate the settlement payment among
wages, interest, and penalties results in wage characterization of the entire payment
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 9 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
exclusive of the attorney fee award. Some IRS field personnel would also characterize the
attorney fee award as wages. The attorney fee is correctly reported as nonwage income to
the plaintiff and deductible by the plaintiff, above the line.
Example 2: Let’s assume that the defendant agrees to pay $500,000 to the plaintiff for
violation of the plaintiff’s civil rights, $250,000 to the plaintiff as a return of overpaid
mortgage interest, and $200,000 as recovery for emotional distress. The defendant will
also pay attorney fees and costs in the amount of $300,000.
Under the terms of this settlement, $700,000—the $500,000 recovery payment and
$200,000 emotional distress payment—is reported as ordinary income on a form 1099
MISC. The $250,000 return of mortgage interest is reported on a form 1098. An
information return is properly delivered to both the plaintiff and the attorney for the
$300,000 attorney fee payment.
Because this case involves a civil rights claim, the plaintiff will be able to deduct the
$300,000 attorney fee payment. The $250,000 return of mortgage interest may or may not
be income in the hands of the plaintiff depending on whether the originally paid mortgage
interest was deducted as a miscellaneous itemized deduction.
Example 3: Let’s assume that the defendant agrees to pay $800,000,000 into a fund
established to resolve claims of fraud in the sale of securities. Each injured investor shall
receive a payment based on the number of shares purchased allocated between interest
and loss of the value of the shares purchased. Each payment shall be allocated one-half to
interest and one-half to the loss of share value. No information returns shall be sent to the
injured investors or to the tax authorities.
Under the terms of this settlement, one-half of the payments made to injured investors are
reportable as interest income on form 1099 INT. The remaining half is not reportable to
either natural persons or entities because it is a return of capital.
The statement in the example agreement that no information returns will be sent, even
when blessed by a court, is not dispositive. The IRS and state tax authorities are not
parties to the litigation and are not bound by the court order or the parties’ agreement.
Failure to comply with the information reporting obligations associated with these
payments subjects the payer (usually a defendant or a qualified settlement fund) to
substantial penalties.
Conclusion
This article is intended only to provide a high-level review of some of the tax consequences that
may flow from settlement payments, and to encourage you to consult with tax counsel and to be
aware of the ways in which tax consequences may allow you to achieve a more favorable
settlement for your client.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 10 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Keywords: litigation, woman advocate, settlement, negotiation, tax consequences, recovery,
attorney fees, interest payments
Julia Mandeville Damasco is a partner and Margaret Trollan is an attorney at Damasco & Associates LLP, a
certified public accounting firm with offices in the San Francisco Bay Area and in Hailey, Idaho.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 11 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Questions Every Litigator Should Ask about Mediation
Confidentiality
By Rachel K. Ehrlich and Emily E. Garrison – September 8, 2016
Litigators use mediation to facilitate the exchange of information, flesh out and narrow issues,
and resolve matters expeditiously. To limit the risk associated with achieving these benefits,
most participants agree to be bound by “mediation confidentiality,” which promotes candor and
thus facilitates mutually beneficial solutions. Sometimes the mediator or a court supplies the
confidentiality agreement, and sometimes a state’s mediation statute makes the mediation
automatically confidential. Litigators, focused on resolution of the dispute at hand, may not
contemplate the consequences of mediation confidentiality. But they should. Litigators need to
understand what mediation confidentiality may not protect and how mediation confidentiality
agreements may affect future proceedings. Here we address key questions to consider before
your next mediation.
What Protections Are Provided in My Jurisdiction?
The rules for mediation confidentiality vary among jurisdictions. Some jurisdictions have strict
rules protecting the confidentiality of mediation communications and materials. In California, for
example, the stringent confidentiality provided by Evidence Code sections 1115–1128 has been
repeatedly upheld. Section 1119 states that neither “evidence of anything said or any admission
made for the purpose of, in the course of, or pursuant to, a mediation or a mediation
consultation” nor any document “prepared for the purpose of, in the course of, or pursuant to, a
mediation or a mediation consultation” is admissible or subject to discovery. Disclosure of such
evidence cannot be compelled by any noncriminal proceeding, whether it be arbitration,
administrative adjudication, or a civil lawsuit. The same section further provides that “[a]ll
communications, negotiations, or settlement discussions by and between participants in the
course of a mediation or a mediation consultation shall remain confidential.”
Other jurisdictions provide less protection for mediation communications and submissions. For
example, the Indiana Rules for Alternative Dispute Resolution afford mediation the same Rule
408 protections as evidence of a settlement offer or its acceptance, which “is not admissible to
prove liability for or invalidity of the claim or its amount” but may be admissible “when the
evidence is offered for another purpose, such as proving bias or prejudice of a witness, negating
a contention of undue delay, or proving an effort to obstruct a criminal investigation or
prosecution.” See Ind. R. Evid. 408 (incorporated by reference in Ind. A.D.R. R. 2.11). The
Indiana rules protect mediators from compelled disclosure of matters discussed during
mediation, treating them as privileged, and confidentiality requirements may not be waived by
the parties. The Indiana Supreme Court has held that these rules apply only to mediations that
take place after a suit has been filed in Indiana. See Vernon v. Acton, 732 N.E.2d 805, 808 n.5
(Ind. 2000).
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 12 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
The Uniform Mediation Act (UMA), adopted in 12 jurisdictions (Hawaii, Idaho, Illinois, Iowa,
Nebraska, New Jersey, Ohio, South Dakota, Utah, Vermont, Washington, and Washington, D.C.)
and under consideration in two more jurisdictions (Massachusetts and New York), strikes a
balance between protecting mediation communications and preventing parties from using
mediation to cloak otherwise discoverable/admissible evidence. Specifically, the UMA protects
“mediation communications,” defined as “a statement, whether oral or in a record or verbal or
nonverbal, that occurs during a mediation or is made for purposes of considering, conducting,
participating in, initiating, continuing, or reconvening a mediation or retaining a mediator.”
UMA § 2. It creates a privilege against disclosure that may be claimed by the mediator,
mediation parties, or even nonparty participants. UMA § 4. That said, the privilege may be
waived in certain circumstances, and there are several exceptions to confidentiality, including for
communications reflected in an agreement signed by all parties to the agreement;
communications available under the Freedom of Information Act or pursuant to the Open
Meetings Act; communications used in a claim of professional misconduct or malpractice against
a mediator, party, participant, or representative of a party; and communications involving threats
to commit violence or a crime or used to plan, attempt, or conceal a crime. UMA §§ 5–6. And a
party cannot shield evidence that would otherwise be discoverable or admissible, merely by
using it in mediation. UMA § 4(c).
Differing protections among jurisdictions only complicate this task, because litigators need to
pay careful attention to how specific categories of documents are classified in their particular
jurisdiction. For example, briefs or statements submitted to the mediator, oral statements in the
mediation, and letters between the parties are confidential and privileged under the UMA as well
as in California and most other non-UMA jurisdictions. Exhibits that were created specifically
for the mediation (e.g., a chart) and exhibits to briefs that are otherwise discoverable are not
privileged under the UMA (although the fact that such exhibits were used in the mediation may
be privileged). But they may receive different treatment in other states, such as California.
Adding a further wrinkle, be aware that multiple jurisdictions’ rules or laws may apply, where,
for example, a matter is pending in federal court based on diversity jurisdiction, see, e.g.,
Milhouse v. Travelers Commercial Ins. Co., 982 F. Supp. 2d 1088 (C.D. Cal. 2013), aff’d, 641 F.
App’x 714 (9th Cir. 2016), or a case involves actions and potential tortfeasors in multiple
jurisdictions.
The patchwork of laws and rules that govern confidentiality of mediation—from state statutes to
state agency rules to state and federal court local rules—requires careful consideration before
agreeing to mediate. Think about the protections that are needed for the particular action and
what may be provided under potentially applicable laws and rules.
The Mediation Confidentiality Provisions Were Breached: Now What?
Consider the following: after a matter does not settle in mediation, someone submits evidence
citing statements made during mediation. This violates mediation confidentiality, but what
recourse is available? Courts hesitate to go further than finding evidence inadmissible. The
decision in Higbie v. United States, 778 F.3d 990 (Fed. Cir.), cert. denied, 136 S. Ct. 37 (2015),
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 13 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
is instructive. There, the confidentiality clause provided: “Any documents submitted to the
mediator(s) and statements made during the mediation are for settlement purposes only.” Id. at
992. The court nonetheless denied monetary damages for breach, explaining that the plaintiff
failed to show that the mediation agreement could be fairly interpreted to contemplate money
damages because nonmonetary relief (i.e., exclusion) was available. Id. at 995.
The Eastern District of Pennsylvania reached a different conclusion where the mediation
confidentiality provision provided that the parties “underst[oo]d that discussions during the
mediation session are confidential and will not be used during subsequent proceedings” and
“therefore, agree[d] not to call the mediator as a witness in future proceedings.” Bethlehem Area
Sch. Dist. v. Zhou, No. CIV.A. 09-03493, 2012 WL 930998, at *1 (E.D. Pa. Mar. 19, 2012). The
court awarded nominal damages of $1 and permitted evidence of actual damages at trial in
connection with breach of mediation confidentiality. Id. at *5.
The consequences of a breach of confidentiality could be clarified by the parties from the
outset—for example, by expressly providing for liquidated damages. But consider the impact
that requesting such clarity may have on other parties’ desire to move forward with mediation.
Related Disputes and Nonparticipating Parties: What Is Protected?
When a matter developed primarily in mediation settles, the confidentiality provisions that
governed the mediation may mean that little or no otherwise admissible evidence regarding that
dispute exists. This may create issues in related disputes, such as disputes about contractual
indemnity issues, insurance coverage, or malpractice arising from the mediation.
Consider the following hypothetical scenario: early in a construction defect lawsuit, the
contractor and subcontractors that built an apartment building settle with the allegedly injured
tenants of that building. During the mediation leading to the settlement, the parties exchanged
documents, discussed case theories, and ran damages allocation models. None of this evidence
became part of the litigation record. After the settlement, a dispute arises between the
contractor’s insurer and the subcontractor’s insurer. What happens to the evidence that was
developed during the course of the mediation but that is not part of the mediation record?
Mediation confidentiality provisions can present serious proof problems in such related disputes.
While the risk is particularly great in California and other states with strict mediation
confidentiality statutes, even disputes following mediations governed by the UMA are not
immune to the risk.
In Rojas v. Superior Court, 93 P.3d 260 (Cal. 2004), the California Supreme Court highlighted
the evidentiary consequences of mediation confidentiality in a subsequent, related case. There,
contractors/subcontractors settled in mediation a construction defect case brought by the owner
of an apartment complex. The settlement agreement stated in part that “throughout this resolution
of the matter, consultants provided defect reports, repair reports, and photographs for
informational purpose which are protected by the Case Management Order and Evidence Code
§§ 1119 and 1152, and it is hereby agreed that such materials and information contained therein
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 14 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
shall not be published or disclosed in any way without the prior consent of plaintiff or by court
order.” Id. at 262. Thereafter, the tenants sued the complex’s owner and construction entities
alleging, among other things, health impacts from the construction defects. Because the tenants
were not parties to or participants in the mediation of the underlying construction defect matter,
they had no ability to influence the scope of its mediation confidentiality. Nevertheless, the
tenants were denied discovery of materials prepared for the mediation, including photographs of
alleged defects. The California Supreme Court concluded that the items were not discoverable
because they were “prepared for the purpose of, in the course of, or pursuant to [the] mediation”
in the underlying action. Id. at 265.
While Rojas highlights the potential evidence-related consequences of a strict mediation
confidentiality provision, litigators should keep in mind that communications that might be
otherwise protected may be admissible for limited purposes in future disputes, including:
•
Suits about lawyer and/or mediator misdeeds. See, e.g., Alfieri v. Solomon, 365 P.3d
99, 116 (Or. 2015) (holding that communications between a mediating party and her
attorney outside of the mediation proceeding were not “mediation communications,”
even if integrally related to a mediation, and could be used in a subsequent malpractice
action). But see Cassel v. Superior Court, 244 P.3d 1080, 1087 (Cal. 2011) (holding that
mediation-related discussions were inadmissible in a subsequent malpractice action
against attorneys, even if those discussions occurred in private, away from any other
mediation participant).
•
Suits about insurance coverage and bad faith. See Sharbono v. Universal
Underwriters Ins. Co., 161 P.3d 406, 419 (Wash. Ct. App. 2007) (holding that the trial
court properly admitted mediation evidence not offered for the purposes of liability but to
prove state of mind); Mutual of Enumclaw v. Cornhusker Cas. Ins. Co., No. CV-07-3101FVS, 2008 WL 4330313, at *3 (E.D. Wash. Sept. 16, 2008) (holding communication
about insurance coverage unprotected because it was unrelated to the mediated dispute).
•
Circumstances where information has been shared with a nonparticipating
insurance carrier. See Cont’l Cas. Co. v. St. Paul Surplus Lines Ins. Co., 265 F.R.D.
510, 530 (E.D. Cal. 2010) (finding an insurer that did not participate in mediation of the
underlying case could not claim that information shared with it by the insured and the
insured’s counsel about what occurred at the mediation is privileged).
Takeaways
There is not a one-size-fits-all solution to addressing potential issues surrounding mediation
confidentiality. Parties should consider the ideal mediation confidentiality provisions and
compare those to the provisions that will likely apply to the dispute absent an agreement by the
parties to the contrary (if one is permitted).
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 15 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Finally, while this article has tackled some of the key questions associated with confidentiality,
litigators also be should cognizant of other mediation confidentiality pitfalls—such as the
consequences of a party’s copying the mediator on communications to attempt to cloak them in
privilege, or the separate but related risk of waiving privilege by sharing documents or
information with a mediator. These issues can be tricky to discern and resolve, but they are
nonetheless an important part of the mediation process. They should be considered by litigators
as they evaluate whether and under what terms to mediate their clients’ disputes.
Keywords: litigation, woman advocate, mediation, ADR, confidentiality, privilege, mediation
confidentiality
Rachel K. Ehrlich is a mediator with Ehrlich Mediation & Dispute Resolution Services in the San Francisco Bay
Area. Emily E. Garrison is a senior associate at Reed Smith LLP in Chicago, Illinois.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 16 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Practical Considerations for Mediating Complex Cases
By Jane I. Milas – September 8, 2016
Complex cases—those that involve numerous parties; complicated technical, scientific, or
industry-specific issues; and/or large dollar amounts—may at first appear to present
insurmountable obstacles to mediation. Yet these are precisely the sort of cases that call out for
mediation. In these major cases, the cost of litigation, both in terms of dollars and the time
involvement of the parties’ key personnel, can easily overwhelm even a sophisticated and
successful business. The negative publicity and hard feelings among the parties in a high-profile
commercial case can affect business development and future business opportunities. The public
nature of litigation, with its open hearings and accompanying public access to court documents,
can subject parties to inaccurate media reports and unwanted public scrutiny. Mediation, when
structured and handled appropriately, can mitigate or avoid many of these collateral
consequences of litigation.
Complex cases, however, call for careful consideration in order to structure a successful
mediation. This article will outline some particular issues and practical tips to keep in mind when
mediating a complex case.
Define with Your Client What Counts as a “Successful” Outcome
Any lawyer who has mediated a case—large or small—has probably heard the mediator say that
the mediator and lawyers know a mediation is successful when all parties are similarly unhappy.
While an unhappy client is not the goal of mediation, this tongue-in-cheek observation highlights
an essential step in any mediation: The lawyer and his or her client must set reasonable
expectations for a mediated result. Clients need to understand that mediation is not a trial in
which there is a “winner” and a “loser.”
In a case with two parties and relatively straightforward legal and factual issues, setting
reasonable expectations means discussing with the client the strengths and weaknesses of each
party’s case, the potential cost of future litigation, and the relative probabilities of success. That
discussion will yield a range of acceptable settlement amounts as well as potential resolution of
any nonmonetary issues.
In a complex case, this sort of targeted discussion generally is too simplistic. Minimizing the
preparation needed in order to set reasonable expectations and short-circuiting the process of
client educating is one of the best ways to ensure that a mediation in a complex matter fails.
Instead, make sure that you have your clients’ “buy-in” to the benefits of mediation and to doing
the work necessary for a successful process. Then, discuss with your clients the strengths and
weaknesses of each party’s claims and/or defenses in advance of the mediation, think through
possible outcomes with each party in mind, and learn from your client what ideal and acceptable
resolutions of the various issues presented by the case might look like. Set reasonable
expectations about the extent to which your client will be able to influence the settlement terms
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 17 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
that apply to each and every party and the degree to which compromise might be required to
achieve settlement.
Obtain the Major Players’ Commitment to Participate in the Mediation Process
In a complex case, it is imperative to obtain the commitment to participate fully in a mediation
from at least those parties who appear to have the bulk of the exposure. For example, a large
construction case with allegations of defective design, faulty construction, delays, payment
issues, code violations, and work requiring repair and replacement may involve design
professionals, the general contractor or construction manager, subcontractors, suppliers, payment
and performance bond sureties, and the owner’s representatives. The list of parties can easily
exceed 20 or more entities. The more parties from whom you can obtain agreement to participate
in the mediation, the better, but in a complex case there often are parties whose exposure is more
limited and narrow. A successful mediation can be structured without the participation of these
“bit players” as long as the major players commit to mediate. Without the major players, the
mediation stands little chance of success. Even if the factual and legal issues are such that
potential liability can be apportioned with little or no overlap, parties will be disinclined to settle
with one opponent when they will still have to litigate with other major parties.
To ensure buy-in from the major players, consider drafting a mediation agreement with the
assistance of the mediator. While no one wants to add another layer of complexity to an already
complex matter, a mediation agreement can serve several useful purposes. Although parties can
withdraw from participation in a voluntary mediation scenario, parties are less likely to simply
pull out of a process to which they have agreed in a negotiated writing. And, the mediation
agreement can also outline the parties’ responsibilities for payment of mediation expenses and
set a schedule for mediation-related discovery, position statements, and mediation sessions.
The mediation agreement should cover these recommended topics:
•
•
•
•
•
An initial outline of the kind of information exchange the parties need—e.g., mutual
exchange of documents, a limited number of depositions, etc.—to be supplemented if
necessary with the assistance of the mediator.
A provision for the exchange of expert reports and any power point or other presentation
materials the experts intend to use at the mediation. The agreement may indicate that the
reports are for purposes of mediation only.
A provision for a written submission to the mediator, exchanged with the parties,
containing a summary of the facts, theories, and opinions on which each party intends to
rely.
A schedule of key information-exchange dates, together with potential dates and
locations for the mediation.
An outline of the anticipated way in which the mediation will proceed—e.g., initial joint
session with all parties followed by breakout sessions, timed presentations of expert
opinions or findings, opening statements by parties, or any other particular process the
mediator and the parties intend to follow.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 18 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
•
A listing of the anticipated fees and expenses of the mediator, the time frame required for
payments, an allocation of those fees among the parties, and provisions concerning the
confidentiality of information exchanged and of the mediation itself, as well as privilege
or other applicable protections under any state or federal rules of evidence.
Obtain the Court’s Cooperation in the Mediation Process
In complex cases, mediation often occurs after a lawsuit has been initiated. Claims, counterclaims, cross-claims, third-party actions, apportionment complaints, and various other pleadings
have already been filed among the parties. Indeed, the proliferation of pleadings is one factor that
often drives the client’s willingness to consider mediation. It is important to involve the court in
the mediation process to the greatest extent possible. Courts routinely encourage alternative
dispute resolution efforts; some courts have special programs to facilitate court-supervised
mediation. To the extent the court becomes interested in the mediation process, the mediation
takes on more significance.
Parties should consider whether they want to stay the case pending mediation. If the parties don’t
want to stay the entire case, they may nonetheless be open to staying discovery in the court case
to allow mediation sessions, with more limited discovery, to go forward. A mediation agreement
with a schedule can be useful to show the court that the parties are serious about mediating the
matter, and to obtain either a stay of the litigation or court rulings that can work in tandem with
the mediation. Discussing ways to meet the court’s scheduling requirements while facilitating the
mediation process will help the lawyers control litigation costs and increase the likelihood of a
successful mediation process.
In the event there are “bit players” who do not voluntarily participate in the mediation, the
parties may be able to use dispute resolution mechanisms available through the court to foster
participation of these outlying parties in settlement efforts. Most courts have settlement
conferences, pretrial conferences, status conferences, or other conflict resolution vehicles short
of a trial. These court proceedings can open up settlement discussions with the “bit players,” who
must appear at them.
Not All Mediators Are Well Suited to Conduct Complex Mediations
Not all mediators are comfortable mediating complex cases. A complex matter requires a
mediator who is able to oversee a process that frequently includes discovery. The mediator must
enforce deadlines and understand technical and scientific data. Most critically, the mediator
needs to have the experience and authority to command the respect of the parties, even when
they are being asked to pay more, or settle for less, than their ideal scenarios. The most
successful mediators can make each party feel that it has been fully heard and its position has
been seriously considered.
But how to find a mediator with the requisite qualities? Your complex mediation should never be
that mediator’s first complex mediation. In a multiparty case, create a list of potential mediators
from among those with whom the parties have dealt directly and regarding whom the parties
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 19 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
have received feedback from trusted sources. Consider the mediator’s style, approach, and
knowledge. In a very large matter involving many parties and stakeholders, two mediators
working as a team may be an effective way to manage the process, as long as the mediators are
comfortable working together and the economics of the case support a team of mediators.
Using Discovery in Aid of Mediation
Extensive, sometimes runaway, discovery drives up the cost of litigation in complex matters.
Because the desire to avoid an out-of-control discovery process is one of the most compelling
factors in favor of mediation, discussing discovery in the context of mediation may seem like
heresy.
Even so, in a large case involving technical and scientific evidence, it is virtually impossible to
have a successful mediation without some discovery. And the stakeholders are not limited to the
parties themselves but may include their insurance carriers, sureties holding bonds, banks or
other financing sources, state or municipal agencies, boards of trustees, or building committees.
To facilitate a mediated resolution, the parties and stakeholders need sufficient information to
assess their potential exposure and that of other parties, the likelihood of success on the merits,
and the dollar amounts of claimed damages or other relief. It is critical to the success of the
complex mediation that any information obtained as part of the limited discovery process be
shared and fully reviewed with all the relevant stakeholders as part of the mediation preparation.
The limited discovery process, ideally set forth in the parties’ mediation agreement, can and
often should result in exchange of written articulation of claims and defenses, exchange of expert
reports, and the inspection and copying of documents.
The Mediation Session: Part Art, Part Science
Scheduling a mediation session in a complex case is both an art and a science. If the schedule
does not allow enough time for all parties to be heard, or for them to fully accept a negotiated
settlement, the mediation will be doomed to failure. On the other hand, allow too much time, and
momentum is lost. The parties have too many opportunities to become unproductively
adversarial. A skillful and experienced mediator should guide the parties as to the appropriate
number of days to schedule for a mediation. Even a very complex mediation loses its focus and
momentum if it goes beyond four consecutive days.
When scheduling mediation sessions, the mediator and parties should consider who the decision
makers are and what information should be presented as part of the mediation itself. For
example, in cases involving complex issues driven by expert analysis, power point or other
visual presentations by the experts summarizing their findings—with strict time limitations to
ensure the process moves along—can be very useful in helping to focus the issues for decision
makers and stakeholders. Any tool that challenges the parties’ assumptions about the merits of
their position facilitates movement toward a negotiated resolution.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 20 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
It is a fundamental principle, yet one that is sometimes breached, that decision makers and
stakeholders should be present for the mediation. Being available by phone is not the same as
having people with decision-making authority present to participate in the process, listen to and
assess what is being said by the experts and the mediator, and evaluate the positions of the other
parties. It also is fundamental that when insurance coverage plays a major role in complex
litigation, representatives of the respective carriers with authority to settle must be present and
participate. Nothing derails a carefully planned mediation more quickly than the unavailability of
a claims representative for a key party. The parties and mediator should require in-person
participation by all key stakeholders.
Conclusion
Mediating large, complex cases presents interesting challenges. The human and financial costs of
litigating such cases, however, highlight the importance of thoughtful, carefully structured
mediation as a means to resolve the disputes and allow the parties to move forward.
Keywords: litigation, woman advocate, mediation, mediation agreements, complex litigation,
settlement, multiparty cases
Jane I. Milas is the managing director of Garcia & Milas, P.C., in New Haven, Connecticut.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 21 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Collaborative Negotiation Techniques: Three Practice Tips
Backed by Social Science
By Tracy Hughes – September 8, 2016
Most lawyers have been exposed to negotiation courses or trainings that emphasize the “winwin” model of compromise as the best strategy for negotiating a case. This model, popularized
by Roger Fisher and William Ury’s negotiation bible, Getting to Yes, emphasizes a need-based,
open information approach to negotiated outcomes. My own experience is that this negotiation
model leads to strong settlement agreements and facilitates positive professional relationships
with opposing counsel.
And yet, while preparing a recent training about using these techniques, I realized that I had not
yet won over some old-school colleagues who still perceived the collaborative model as “weak.”
To help explain why these methods work, I looked to Dr. Robert Cialdini’s Influence: Science
and Practice, a psychology textbook used in business schools to teach students about how
marketing influences purchasing decisions. Cialdini, a recognized expert in social psychology,
has identified some “click whir” responses that drive our perceptions, specifically reciprocity,
consistency, social proof, liking, authority, and scarcity. Much of Cialdini’s work helps to
explain why the collaborative negotiation model works in the first place, and provides some
additional useful tools negotiators can use to make that model even more successful.
This article sets out three key strategies that I have developed by incorporating social psychology
ideas into my collaborative negotiation toolkit.
Smart Preparation: Marshalling the Best Support
Thorough preparation is key to any successful negotiation. Be in command of the facts. The
foundation of your power in a negotiation is knowing the details and themes of your case
completely so that you can articulate your message persuasively.
In addition to your command of the facts, social psychology research suggests that you should
marshal particular kinds of support for your position, if possible. Cialdini devotes an entire
chapter of his book to “social proof,” or how human beings are wired to emulate the behavior of
groups. In the context of your case, find other similar settlements and precedent before your first
negotiation to show your offer is consistent with similar resolutions. This will resonate with your
opposing counsel, and your offer will appear reasonable.
Gather authoritative sources that support your position. Cialdini’s work identified that human
beings have a natural tendency to obey without question when authority factors are present.
Marketing professionals are acutely aware that using highly regarded professionals, such as
doctors and dentists, gives extra power to advisements. In the context of a negotiation,
assembling authoritative sources and expert opinions as you prepare will make your message
more compelling and persuasive. Doing so will also help you honestly assess the strengths and
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 22 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
weaknesses of your case. Such information will be invaluable as you proceed to the more
challenging task of crafting a negotiated agreement.
Thorough case preparation should also focus on the negotiation itself. Consider your adversary’s
possible interests and obstacles. Where are their sources of power? Who are the players, and
what third-party interests will be affected? Do any of your interests overlap? If possible, take the
time to record your impressions on these questions, and refer back to your notes as the
negotiation progresses.
You are setting the stage in the first meeting for a long chain of communications. Err on the side
of more preparation than you think you need, and you will be rewarded in the end.
Building Rapport
Building rapport with your opposing counsel is another important negotiation technique
supported by collaborative negotiation theory and social psychology. Establishing a connection
with your adversary can make communications easier. Basic courtesy and professionalism are
always a good practice. Cialdini identifies two other aspects of influence that can build rapport:
“liking” and “reciprocity.”
Find something in common: “liking.” I went to a family camp this summer that
organized children into different groups. In the lunch line one day, I saw two three-yearolds spontaneously hug each other, looks of pure joy on their faces. I thought they must
be close friends or cousins. The mother of one explained that they had just learned they
were both in the “Munchkins” children’s group that week. That small commonality
caused them to feel close to each other. Their embrace was driven by the realization that
they were, in a small way, the same. Cialdini has traced this trigger to our desire for
social conformity. Similarities are familiar, and familiarity creates rapport and comfort.
In my own negotiations, I have found that if opposing counsel and I have something in
common, our negotiations will proceed more smoothly. In the Internet age, information
about your opposing counsel is readily available. Perhaps your opponent went to your
law school or college. You may know people in common, or have worked on similar
cases. Even family interests can strike a common note. I once worked on a case with a
lawyer who was a former child star on Broadway. I used that information as an ice
breaker and was able to share that theatre was an interest of one of my children, building
rapport.
This technique seems obvious, but it works. As Fisher and Ury acknowledge in Getting to
Yes, if there is rapport in the beginning, your negotiations will go more smoothly later. A
small investment in knowing your audience, on both sides, will more likely lead to
positive outcomes.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 23 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Give a gift: reciprocity. A compelling study on reciprocity examined how providing an
after-dinner candy with the check affected a waiter’s average tip. David B. Strohmetz et
al., “Sweetening the Till: The Use of Candy to Increase Restaurant Tipping,” 32 J.
Applied Soc. Psychol. 300 (2002). Waiters who provided a candy with the check received
higher average tips than waiters who did not. Waiters who gave one candy received
average tips 18 percent higher than waiters who gave no candy. Waiters who offered
customers a second candy received average tips 21 percent higher than waiters who gave
no candy.
According to the research, a feeling of reciprocity is triggered when people are offered
something tangible without any requirement of repayment. Cialdini suggests that this has
to do with cooperation being necessary to sustain human societies. People who did not
cooperate and reciprocate did not survive, and this has been ingrained in humans across
cultures.
In the context of a lawsuit, small concessions are possible, especially early on. Does your
opposing counsel need a deadline extension? Do they want more pages in a response
brief? These are usually concessions that you can give without consequences to your
client. Making a small compromise can create goodwill and a spirit of reciprocity that is
likely to continue as your case proceeds.
Presenting Your Case
The first communications between you and your opponent will also impact the trajectory of any
negotiated solution. My preference is to have in-person meetings, with all of the stakeholders
present, and to use visual displays of information.
Communicate in person. When I began handling consumer protection cases, the
standard approach for communicating settlement offers was an opening offer letter. I
realized early that communicating in person could be much more effective. In our era of
short attention spans, wading through a 20-page offer letter can be tedious for the lawyers
and decision makers alike. This is not to say you should not conduct a well-reasoned
legal analysis of your case. But if you can present it in person to the other side, you
should. You can always follow up with the letter, or provide one at the meeting.
Other professionals with sales-related jobs have already adopted this technique. Real
estate agents are loathe to give you an offer over the phone. They present it in person
because they know it will be more compelling and they can be more persuasive. If you
are presenting live, you can modulate the pace and emphasis of the information, and also
observe your opponents’ reactions to your case. You will also be building rapport, which,
as discussed above, will improve your ability to communicate your mutual interests.
Assemble the stakeholders. I also like to get all the key players in the room. Are you
representing multiple decision makers? Who will be making decisions about the case for
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 24 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
the other side? Getting the stakeholders together ensures your message gets to the right
people, and allows you a glimpse into your opponents’ decision-making process. You
may be negotiating with a smaller subset of parties later, but bringing all the parties
together may provide better information upon which to base your negotiated solution.
Communicate visually. Prosecutors are taught the value of demonstrative evidence early
in their careers. Juries like seeing the gun, the clothing, and other key evidence live. In
the negotiation context, graphically displayed concepts are likewise much more vivid.
There are now entire businesses devoted to teaching professionals to communicate in a
more visual, compelling way.
Visual displays work because they appeal to more than one sense at a time. People are
more likely to understand and retain the information. A study conducted by the
Minnesota Mining and Manufacturing Company (3M) at the University of Minnesota
established that using visual displays improved the effectiveness of the communication,
the students’ perceptions of the presenter, and the speaker’s confidence. Douglas R.
Vogel et al., “Persuasion and the Role of Visual Presentation Support: The UM/3M
Study” (Univ. of Minn. Mgmt. Info. Sys. Research Ctr., Working Paper No. MISRC-WP86-11, 1986).
In a recent food, drug, and medical device task force negotiation, we showed the CEO of
a company a graphic display of the level of contaminants in his product compared to
other companies’ products and to the legal standard. It was difficult to deny liability
given the dramatic spike in his product’s contaminants compared to the others, and we
successfully settled the case shortly after the meeting.
Conclusion
Collaborative negotiation theory, social science research, and my own experience have taught me
that smart preparation, building rapport, and communicating visually and in person will enable
you to work toward a mutually beneficial, interest-based resolution.
Keywords: litigation, woman advocate, negotiation, negotiation theory, social psychology,
rapport, communication techniques
Tracy Hughes is a deputy district attorney at the Orange County District Attorney’s Office in Santa Ana, California.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 25 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Why Negotiate? In-House Counsel Explains Three Key
Benefits for Clients
By Natalie Fabian – September 8, 2016
No one likes to be sued. A lawsuit is an indication that you might have done something wrong,
or at the very least that someone thinks you did. As in-house counsel, I know my client very
well. And I know that executives everywhere are often upset about the filing of a lawsuit against
their companies in the first place. They say, “I did nothing wrong,” or “They injured me!” Why
should a company negotiate, especially before a court orders it to do so? What if the company
ends up paying money that it wouldn’t have had to pay? It is my job to answer these tough
questions and to explain why negotiation before litigation can be the best course of action. Even
though we may eventually win a case and may even get attorney fees, the company’s interests
are frequently best served by early mediation of a dispute. This is because early mediation offers
three key benefits.
Mediation Allows Both Sides to Air Their Grievances
When two parties have a disagreement, both want to tell their sides of the story. A mediation
allows that storytelling to unfold in a controlled environment. The cathartic exercise of airing
grievances can make both parties more open to listening and coming to a resolution that may not
have occurred otherwise. Once both sides have had a chance to explain their positions, they will
be better prepared to work toward a mutually acceptable agreement.
Mediation Provides a Baseline of the Other Side’s Evidence and Theories
Mediation frequently provides an opportunity to learn more about the other side’s case against
you. Each side comes into a mediation believing it has a winning case. The plaintiff is certain it
will win, and the defense is also certain it will win. The information provided through a
mediation allows the parties to explore the weaknesses and strengths of each argument and the
defenses the parties may have. As both sides present some evidence, the mediator can help adjust
the expectations on both sides as necessary. Maybe the plaintiff will not get what it asked for, but
maybe the defense is relying too much on a weak argument. A mediator can help both sides see
the issues with their respective cases in a way that a judge will not.
Compared to Litigation, Mediation Is Less Risky and Requires Fewer Resources
Litigation is extremely expensive, especially when companies need to hire outside counsel to
handle the litigation. Moreover, the loss in employee productivity associated with use of
employee time to help with the litigation is a cost that adds up quickly. Instead of doing the job
that they were hired to do, employees are tasked with finding documents or giving deposition
testimony. In addition to being expensive, the result of litigation is not guaranteed. No one can
predict with 100 percent accuracy how a court will rule. And if the case goes to trial, that trial
can last anywhere from a day to several weeks (or months, if it is very complicated).
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 26 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
By contrast, a mediation generally lasts a day. If I’m able to convince the company to mediate
early and I’m able to settle the matter today, we may be able to avoid hiring outside counsel at all
and can certainly avoid the high costs of litigation. Even when it makes sense to take outside
counsel with you to a mediation, you have the authority to settle. As in-house counsel, you are
the company’s authorized representative. There are no phone calls or emails back and forth
asking for authorization. Many times, mediation is a fast way to end a case, and it requires
substantially fewer resources than litigation would require.
Of course, not all cases will be resolved through mediation. Either party can walk away.
Sometimes talks dissolve before any issues can be resolved. This is an unfortunate reality. But if
you can explain to your client why mediation is useful, and why it is important, then you may be
able to settle more cases efficiently.
Keywords: litigation, woman advocate, mediation, negotiation, settlement, in-house counsel,
cost savings, managing expectations, discovery costs
Natalie Fabian is associate general counsel at ResCare in Louisville, Kentucky.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 27 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Five Terms to Consider When Negotiating Settlement
Agreements
By Julie Pettit and Jnana Settle – September 8, 2016
Even trial lawyers will concede that these days, nearly all civil cases will settle. A handful of
them will nonetheless rise from the ashes for secondary litigation because of poorly drafted
settlement agreements. And while litigators are litigators for a reason—we love to litigate!—this
is one circumstance in which we really must do all we can to avoid litigation.
You’re much more likely to draft a settlement agreement in a case than jury instructions, so best
practices for settlement agreements should be a part of any litigator’s toolbox. Before you even
start drafting, confirm the “deal points” that must be included and ensure all of the parties agree
on them. Then consider “what if” scenarios that could arise, and incorporate terms that cover
those hypotheticals into your agreement. And then consider settlement agreement terms that can
be particularly important when you’re on the plaintiff’s side. This article discusses some of those
more overlooked or underestimated aspects to settlement agreement drafting and negotiation.
Once you realize that collateral issues to the settlement can be easily resolved in the agreement
itself and start to include terms to that effect, the entire process becomes much more streamlined.
Deadlines
Failure to include appropriate deadlines is common, particularly among lawyers who are just
learning to draft an agreement. This mistake can result in minor inconveniences, such as
opposing counsel who fail to have their client sign in a timely manner, or much larger issues,
such as eventual litigation over the settlement agreement itself. Parties displeased with settlement
terms may hesitate to sign without a hard deadline for execution. Such difficulty can be avoided
entirely by including within the terms of the settlement agreement itself the date by which the
agreement must be executed by all parties.
Perhaps the most important deadline that is commonly overlooked is the deadline for settlement
payments. Always specify whether the settlement will be paid by check, wire transfer, or
installments, but go on to specify when the payment is to be made and to whom it should be
made. Sometimes settlements are paid to the attorney and sometimes to the client directly. Be
sure that all parties are in agreement regarding such terms when the agreement is signed, and that
the terms are clearly included.
Stipulate when dismissal documents will be filed. From a plaintiff’s perspective, the filing of
dismissal documents should always be explicitly conditioned upon first receiving the settlement
payment, including any consequences should the paying party fail to make the settlement
payment by the specified deadline. Then, set out a timeline for the dismissal filing.
Deadlines keep the post-settlement course running smoothly. When they are omitted, you’ll
inevitably find bumps in the road that were otherwise easily avoidable.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 28 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Tax and Credit Consequences
Depending on the client’s sophistication, he or she may or may not realize that some settlement
payments will have tax consequences. If you are not a tax attorney and have not counseled your
client sufficiently on possible tax consequences, it is important either to include a disclaimer
regarding tax consequences within the settlement agreement or to have your client sign a
separate document stating that he or she has not received tax advice from you. When the
opposing party is a large entity and your client is an individual, opposing counsel might insist
that a disclaimer of assurances regarding tax consequences be included in the agreement. Even
when that is the case, consider having your client sign a separate document stating he or she has
not received tax advice from you. And encourage your client to talk to his or her CPA or tax
preparer ahead of time about the consequences of any settlement amounts received.
Terms explicitly related to credit consequences should also be considered in appropriate
circumstances. Our office handles many foreclosure defense suits and other consumer lawsuits.
In instances where the opposing party is a lender, creditor, or debt collector, do not overlook that
credit remediation can be included as a settlement term. Opposing counsel will likely stipulate
that her client cannot make any promises or assurances as to outcome on your client’s credit
report, as it is technically not in the lender’s power to change the reports. However, a settlement
term can be drafted (and enforced) whereby a party agrees to contact the credit bureaus and to
make a good faith request to have negative credit reporting deleted, or the entire tradeline
removed.
Consequences for Breach
More lengthy articles can and have been written on how to handle breach of a settlement
agreement. The most common scenario upon breach is for the nonbreaching party to sue the
breaching party to enforce the agreement and/or to obtain money damages resulting from the
breach. You can avoid litigating the settlement agreement by incorporating an agreed judgment
(or consent judgment) into your settlement documents. Most counsel representing defendants
will not want to agree to file an agreed judgment unless a settlement agreement is breached, but
our office routinely adds this into negotiations and is sometimes successful. Agreed judgments
are especially useful when the settlement agreement contemplates installment payments or one
payment shortly after execution of the agreement followed by a secondary payment after
dismissal of the underlying lawsuit. Under the terms of an agreed judgment, if the opposing party
defaults on a payment, you will only need to move forward under the judgment rather than file a
lawsuit for breach of the settlement agreement. When the other side will agree, you can attach
your agreed judgment as “Exhibit 1” to the settlement agreement so that everything is signed and
agreed to at once.
Recovery of Attorney Fees upon Suit to Enforce
Provisions covering attorney fees incurred in a suit to enforce a settlement agreement are so
important that they deserve to be discussed separately. The only thing worse for your client than
having to bring a second lawsuit against the defendant in order to enforce the settlement from the
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 29 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
first lawsuit is having to shoulder the cost of doing so without reimbursement. We also reject
arbitration provisions in settlement agreements.
Releasing Unknown Claims
Consider whether you want to resolve future disputes regarding unknown claims in your
settlement agreement. We frequently learn new facts forming the basis of new claims or
bolstering existing ones after the filing of a lawsuit. When this happens during the course of a
lawsuit, you can in most instances file a motion to amend your pleading. But because such an
option isn’t available post-settlement, it is important to fully understand and address unknown
claims with your client and then determine how to address them in the terms of the agreement
itself.
Generally speaking, the release options are either a general release or a limited release,
sometimes referred to as a special or specific release. The appropriate type of release to include
turns on whether the parties want to settle and preclude any and all claims that exist now or in
the future between the parties, or only certain claims related to the lawsuit or underlying
transaction. Make sure your client understands that a general release will preclude him or her
from all claims, even those not contemplated at the moment. If the objective is to settle all claims
as of the date of settlement, the release should specifically state that it covers claims of every
kind, known or unknown, suspected or unsuspected. A broad, general release of this type is
usually most appropriate when there has been limited interaction between the parties, such as a
personal injury lawsuit or a lawsuit involving a single transaction. Specific releases—i.e., those
that enumerate the claims released and leave any others unreleased—may be more appropriate
when the parties regularly engage in business with each other or contemplate an ongoing
relationship. However, some defendants will make a general release by the plaintiff a sticking
point in negotiations.
Bonus Advice
Lastly, a few closing tips for during and after drafting. First, save each draft as a separate file on
your computer, so that changes can be compared and tracked. You don’t need to strain your eyes
or use fancy software for this if you’ve been saving each draft as a separate file. Basic word
processing software nearly always includes a feature to compare two documents and highlight
any changes between them—use this feature often! Don’t depend on opposing counsel’s cover
email to identify all the changes. Second, when you have a proposed final version that has been
agreed to by all parties, read it multiple times and make sure your client reads it too. Finally,
remember the thread that ties all settlement drafting advice together: a little foresight today saves
a lot of headache tomorrow.
Keywords: litigation, woman advocate, settlement, negotiations, settlement agreements,
deadlines, tax consequences, credit consequences, consent judgment, agreed judgment, attorney
fees, releases, unknown claims
Julie Pettit is a partner and Jnana Settle is a law clerk at The Pettit Law Firm in Dallas, Texas.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 30 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Using Meditation Techniques to Succeed During Stressful
Negotiations
By Kaitlyn M. Murphy – September 8, 2016
Meditation is the mental state of being focused on the present moment, including on one’s
feelings, thoughts, and sensations. Recent studies in the field of neuroscience provide empirical
support for the proposition that meditation’s focus on the present moment and a meditator’s
effort to maintain equanimity in the face of whatever presents itself offer tangible benefits to
those who engage in strategic and adversarial work. These studies suggest that meditation can
actually change the brain’s neural networks. In one study, MRIs of subjects participating in an
eight-week mindfulness practice showed a decrease in the size of the amygdala—the portion of
the brain most closely associated with fear and other strong emotions. Other studies identify a
correlation between mindfulness practices and decreased levels of the stress hormone cortisol.
Attorneys are engaged in strategic and adversarial work almost constantly. Litigators in
particular spend much of their time negotiating with opposing counsel without the benefit of a
neutral party like a judge or arbitrator. Ahead of its time, the Harvard Negotiation Law Review
hosted a forum nearly 25 years ago on the potential implications of meditation for lawyers. In the
wake of recent research, top law schools like the University of California, Berkeley and the
University of Virginia have started offering meditation programs and courses to law students.
Few doubt the neurological benefits that lawyers can experience from meditating. Less attention
has been paid, however, to the skills that meditation teaches and the way those skills may be
particularly useful for lawyers in stressful negotiations. This article draws on the tools commonly
taught through meditation and offers five strategies to help lawyers maintain focus and keep cool
in emotionally charged situations. Whether you have an established meditation practice or have
never tried meditation before, these exercises are designed to help harness your meditation skills
and make the most of them during a negotiation.
Set an Intention
Even before setting their posture, many meditators take time to set an intention and reflect on
their purpose in meditating. Setting an intention slows and focuses the mind. Advocates can draw
on this practice as well. Take a moment before walking into a negotiation to think about your
purpose for being there. What are your client’s goals? How can you best accomplish them? How
will you respond if something unexpected occurs?
Use Reminders
Setting an intention is a great place to start, but intentions don’t get you very far if you forget
about them as soon as you step into the negotiation. Meditators sometimes use the sound of a bell
or a woodblock to remind them to keep focused during a sit. You may not want to bring a gong
to the negotiation table, but you could set a vibrating alarm on your smartphone or wearable
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 31 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
device (like a Fitbit, Jawbone, or watch) to give you a gentle reminder to return your focus to
your intention if your mind wanders.
“Just Like Me”
Some meditators turn their practice away from a focus on the breath and toward their feelings or
emotions in a practice known as metta, or loving-kindness meditation. Metta is designed to help
cultivate a sense of emotional connection with all living beings, including difficult people. One
way to draw attention toward the connection we share with difficult people is by using the phrase
“just like me.”
Lawyers can use this same technique with an opposing counsel who triggers feelings of
exasperation, frustration, or anger. If opposing counsel says something that triggers an emotional
response, try to think of a few statements about that person beginning with “just like me.” For
example, “just like me, this person cares about her client,” or “just like me, this person is trying
to do his best.” If statements like that feel too charitable, you can start with something more
basic such as “just like me, this person breathes the air,” or “just like, me this person is alive.”
This type of practice likely will not have any impact on the other person’s behavior, but it can
help you transform the way you respond to that behavior.
Curiosity
Meditation instructors advise practitioners to greet their thoughts and feelings with gentle
curiosity. This means not pushing the feelings away, but also not clinging to them longer than
they need to be around. In the same way, during a negotiation lawyers can think about listening
to opposing counsel’s positions with gentle curiosity, giving yourself time to play with their
ideas before you respond. This helps to slow down the communication process and gives you
time to fully consider each option before making a decision about what is best for your client.
Start Where You Are
Sometimes strong emotions are not triggered by something external, but from an internal critic
berating us for a perceived misstep. When this happens, advocates can get stuck ruminating on
past decisions rather than focusing on how to best represent their clients in the present moment.
Meditators refer to this response as a “second arrow.” The first arrow is the outside circumstance
that causes us pain and cannot be avoided. The second arrow is the one we shoot at ourselves by
needlessly dwelling on how we wish we had avoided the first arrow. Buddhist nun and
meditation instructor Pema Chödrön gives the following advice for dealing with second arrows
and overwhelming situations: start where you are. Repeating this advice to yourself can help pull
you back into the present moment, taking things one step at a time rather than getting lost in an
impossible alternate reality.
Whether you practice meditation or not, these meditation techniques can help you maintain your
cool and achieve success in stressful negotiations with opposing counsel.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 32 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Keywords: litigation, woman advocate, negotiations, meditation, mindfulness, neuroscience
Kaitlyn M. Murphy is an associate at Boies, Schiller & Flexner LLP in Oakland, California.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 33 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
An Interview with Judge Gail Andler about Class Action
Settlements
By Jessica Scott – September 8, 2016
Negotiating a class action settlement involves different considerations from
settling your run-of-the-mill case. But once you have made it over the hurdle of
agreeing on a settlement, the process does not end there. Settling a class action
case is like crossing the finish line and being told you still have two miles to run.
Approval and administration of the settlement require additional work from the
parties and the court, extending the life of the case for months, if not years. To
flush out the unique considerations every lawyer must prepare for when
negotiating a class action settlement, I enlisted the help of Judge Gail A. Andler,
who is in her 23rd year as a California trial judge. She has spent the last 10 years
as a complex civil judge, devoting a substantial part of her time to class action
litigation. Judge Andler evaluates, on average, two class action settlements per
week. This article reflects her insight into the unique considerations associated
with settling class actions.
As Judge Andler aptly recognized, “most class action cases settle.” If you have never settled a
class action before, however, you may begin with only vague notions that settling a class action
is different from settling an individual action. To provide the best representation for your client,
you should be fully apprised of two particular differences between class and individual
settlements, even before you start to negotiate.
First, you must know the universe of potential exposure and costs. Unlike an individual
settlement, a class settlement amount may not end with agreement on a monetary benefit to the
class. You must be fully prepared to address various costs to ensure that your clients do not end
up paying more (or receiving less) than they bargained for. Class counsel will expect to be paid
attorney fees and costs, which can often be substantial, especially when considered in relation to
the class benefit. One side will also have to hire and pay a settlement administrator to provide
notice to the class, process claims, maintain a website or call center, and issue payments.
Depending on the size of the class and the type of notice the court approves, costs for a
settlement administrator can be several hundred thousand dollars.
Negotiation of the settlement therefore must cover who will pay for the administrator, and who
will pay for attorney fees and costs. In a common fund settlement from which costs and fees will
be paid, you must factor in attorney fees and court costs, as well as settlement administration
costs, to fully evaluate the benefit left to the class for actual payout.
There also are class settlements where the defendant agrees to pay for attorney fees and
administration costs separate from any payment to the class, a structure most commonly seen in
statutory fee-shifting cases. This usually takes the form of the defendant’s agreeing not to object
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 34 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
to class counsel’s request to the court for fees up to a certain amount. If you are defense counsel
negotiating such a settlement, you must ensure that your client is prepared for the outer limits of
potential total exposure. Doing so, however, is trickier than one would expect, as the parties
should negotiate fees only once they reach an agreement on the class benefit, lest there appear to
be collusion between the parties where class counsel is willing to accept a smaller recovery for
the class in return for red carpet treatment on fees. As Judge Andler recognized, “judges must
scrutinize proposed class action settlements to ensure there is no collusion between the parties in
agreeing not to oppose a fee request. Where the fees requested by counsel appear large in
relationship to the benefit to the class, a detailed explanation is required to satisfy the concerns of
the court.”
Second, class action settlements require court approval and supervision. The fact that class
settlement typically cannot be confidential is perhaps the most obvious consequence of the need
for court approval, yet it seems surprising to many defendants. If you are defense counsel, you
must prepare your clients for the reality that whatever they agree to pay in settlement will be
available in the public domain. For some clients, that is enough to nix the idea of a class
settlement entirely. For those that can live with it, they will not only be on the hook for the
settlement payouts, but will also have to continue to pay attorney fees to their counsel well after
the parties agree to settle due to the plethora of filings required to obtain preliminary and final
approval of the settlement from the court.
As for the required filings, there are several. The first filing is typically the motion requesting
preliminary approval of the settlement, which must include copies of the proposed written
settlement agreement, a proposed plan for class notice, and any proposed notice documents. As
Judge Andler explains, you must tell your judge in these filings “how [your] proposed settlement
benefits the class, and how much will go into the pockets of the individual class members at the
end of the day. The parties should not only provide a concise summary of the ‘deal points’ in the
negotiated settlement but also clearly set forth the damages model and the amount of the average
class member’s recovery along with the expected highest and lowest payouts per class member.
The briefing should address the overall value of the claims and discuss generally the factors that
caused the value to be compromised, such as potential proof problems, the financial condition of
the defendant, nonmonetary benefits to the class, etc.” Further, says Judge Andler, “the briefing
must also address the qualifications of counsel and the suitability of the class representative, and
must justify all amounts deducted from the gross settlement for fees, costs, enhancements, and
any other amounts.”
Judge Andler requires this information, as will your judge, because judges must “exercise [their]
independent review and discretion before approving” even stipulated settlements. “This makes
class action settlements unique because the judge must act as a fiduciary to the absent class
members.”
Once the court preliminarily approves the settlement, notice plan, and notice documents, the case
does not end there. The parties must then execute the notice plan and take any other required
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 35 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
steps, usually through a settlement administrator—a process that can last months or even years.
Class members will be given notice and an opportunity to object or opt out, and can file their
claims (if the settlement is a claims-made settlement, instead of an automatic pro-rata
distribution). And the parties must return to the court to request final approval of the settlement.
Before final approval, the court will conduct a fairness hearing, at which time it will consider
objections to the settlement, if properly lodged. Judge Andler expects the parties to “file a
written response to written objections stating why they believe the objections are without merit,”
and sometimes she has “asked the parties to meet with the objectors to try to understand their
concerns.” If the court grants final approval of the settlement at the fairness hearing, then the
time to appeal will begin to count down. Only once that time has expired will class members and
class counsel actually receive any payout.
Negotiating a class settlement and seeing it through to conclusion requires managing client
expectations, being prepared for the circumstances unique to class actions, and educating the
court. Keeping these considerations in mind will help you make it to the real finish line of a
final, court-approved, binding class action settlement.
Keywords: litigation, woman advocate, settlement, class action, class settlement, court approval,
class notice, attorney fees, interview, judicial perspective
Jessica Scott is a partner at Wheeler Trigg O’Donnell LLP in Denver, Colorado.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 36 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
PRACTICE POINTS
August 1, 2016
Six Tips to Stay Connected to Your Professional Network
In a recent Glasshammer.com article, author Zoe Anderson sets forth six practical tips to help
busy professionals maintain a strong professional network:
1. Ensure that your contact information is readily accessible to maintain relationships
with former colleagues and foster relationships with “key players.”
2. Rethink relationships with networking acquaintances who do not necessarily improve
your prospects. Do this in an effort to prioritize relationships with influential people who
can provide professional assistance.
3. Utilize social media to post relevant material and be sure to retweet, like and share
your professional contact's posts—this will ensure that you stay fresh in their minds.
4. Maintain your online presence to “build a reputation as an industry leader and a voice
of authority.”
5. Show that you are an excellent resource by referring customers and clients to
individuals in your professional circles. Your contacts will reward you when the time is
right.
6. Calendar bimonthly events to advance existing relationships and develop new
connections.
Anderson suggests that by cultivating a strong professional network, busy professionals will
remain apprised of upcoming career opportunities without too much hard work.
—D’Anna Harper, Bressler, Amery & Ross, P.C., New York, NY
_________________________________________________________________________________________________________
June 13, 2016
More Women in the Judiciary Means Justice for All
Jay Newton-Small’s article published in the National Law Journal entitled “More Women in the
Judiciary Means Justice for All” discusses how “when females compose even just 20 to 30
percent of courts, changes are dramatic.” The article focuses on the sociological theory that when
women reach between 20 and 30 percent of a body, whether it's a legislature, a court, or a
corporate board, “they begin to really have an impact.”
Newton-Small describes how in 1995, Linda Morrissey—then a new county judge in Tulsa—
quickly learned that unpaid child support often sparked domestic violence cases. Judge
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 37 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
Morrissey, herself a mother of three small children, created a "rocket docket" for child support
cases, to speed resolution and reduce domestic violence. If a defendant failed to pay after
arraignment, Morrissey would bring the case to trial within 30 days, "even if I had to stay to
midnight to see it done." The court generated $1 million in child support payments in the first
year, paid on average in 32 days. The docket is still one of the most effective in the county.
The numbers of women on the bench have dramatically increased over the last 30 years. When
the National Association of Women Judges was formed in 1979, it had 100 members. Today, it
has more than 1,250 members, and women hold one third of the spots on the United States
Supreme Court.
Newton-Small describes a 2005 study published in the Yale Law Journal which “found that not
only were female judges significantly more likely than male judges to rule for plaintiffs in cases
of sex discrimination or sexual harassment, but the presence of female judges on court panels
significantly increased the likelihood that a male judge would rule for the plaintiffs in such
cases.”
Newton-Small points out that the public section is ahead of the private sector with regard to
women beginning to reach critical mass in the judiciary and argues that “[g]iven how much
women have achieved in the judiciary, one can only imagine what achieving critical mass at law
firms might bring.”
Keywords: woman advocate, litigation, career, gender parity, law firms, women, female judges
—Tiffany deGruy, Bradley Arant Boult Cummings, LLP, Birmingham, AL
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 38 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
WORDS OF WISDOM
September 8, 2016
What advice would you give a young lawyer who will soon participate in his or her first
mediation?
The single most important thing that can make or break a successful mediation is giving the other
side the time and space to “let it all out.” Do not attempt any negotiations or solutions until the
other side feels that they have been heard.
This is a lesson that I learned long ago from my summer job as a ride supervisor at an
amusement park. I spent the majority of my time responding to guest complaints because they
were stuck on a ride, not able to take giant stuffed animals with them, or upset that their children
did not meet the proper height requirement to ride safely. But even when confronted by the
angriest guest, I was always able to defuse the situation. The simple trick was actively listening
and giving the guest the time and space to vent. Only then was the guest willing and able to listen
to solutions.
Thankfully, I’m no longer scaling 200-foot roller coasters to talk to angry guests, but sometimes
a tough mediation can get the adrenaline pumping just as much. The lesson I learned from my
amusement park days has served me well as an attorney and has enabled me to achieve
settlements in cases where compromise seemed hopeless.
Joy M. Grow is Chief Legal Counsel at the Indiana Veterans’ Home in West Lafayette, Indiana.
Preparation is key. Although the mediator is neutral and will not be deciding the case, having a
strong handle on the facts and knowledge of the applicable law is just as important during your
mediation as it is during a day in court. Decide beforehand how you will respond to inquiries
during the mediation. Will you speak first and defer to your client for additional commentary?
Would you like your client to confer with you before actively participating, and if so, how?
Prepare your client for some of the arguments and tactics that the other side may use. And be
prepared to compromise.
Professionalism is imperative. How you and your client conduct yourselves during the meeting
greatly affects the other party’s perception of you (and often times how quickly they settle). A
mediation setting is more personal and informal than a courtroom but can also be highly
emotional. Common courtesy and respect will help you to successfully navigate this meeting and
reach a resolution. There are no benefits to rudeness or dishonesty.
Patience is crucial. Be sure to set aside enough time for the process to work. Confirm that you
have arranged a time and date for the mediation with nothing else on the calendar. You want
both your client and the other party to know that you are focused entirely on the matter at hand.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 39 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
If it seems that an impasse has been reached, ask for a brief recess. And always express your
interest in reaching a settlement.
Brittney D. Alls is district ombudsman for Richland County School District One in Columbia, South Carolina.
Every successful mediation or settlement discussion requires three key components:
1. A sound strategy: Enter a mediation or settlement discussion with a well-prepared
strategy. Develop your Best Alternative To a Negotiated Agreement, or BATNA. The
better your BATNA, the greater your power. Also, make sure to consider opposing
counsel’s BATNA while negotiating. Keeping the parties’ BATNAs in mind will allow
you and your client to reach the best possible solution.
2. An open mind: Be willing to compromise. Focus on what outcome would serve your
client’s interests. Then, focus on opposing counsel’s interests to reach common ground.
3. A balance of preparedness and patience: Prepare as you would for trial. Your job is to
persuade the opposing party to reach a settlement that is better for your client than its
BATNA. Feel confident in your position and advocate with zeal. That said, be patient!
Never rush into a settlement.
Sara Qureshi is a J.D. candidate at Barry University School of Law in Orlando, Florida, with an expected graduation
date of May 2017.
As a consultant and trainer on dispute resolution techniques, I offer five tips for new lawyers as
they prepare for and participate in their first mediations:
1. Read articles about effective mediation advocacy skills. You will note these skills are
different from effective arbitration or trial skills. Incorporate these differences into your
approach.
2. Be prepared to discuss the strengths and weaknesses of your case with respect to
liability and damages. Where possible, bring documents and data that support your
position.
3. Know your mediator. Mediators have different backgrounds and utilize varying
mediation styles. Knowing how your mediator will conduct the mediation should inform
you and your client how to best prepare and about what to expect.
4. Think outside of the box. It is important to understand your client’s underlying
interests and goals. A negotiated agreement can involve numerous creative solutions
beyond the traditional monetary settlement.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 40 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
5. Do not give up. Commit the time necessary to prepare for, and participate in, the
mediation. Mediation can be a slow-moving process, and not all cases settle in the time
allotted. If the parties remain engaged in trying to reach resolution, most cases will settle.
Elizabeth J. Shampnoi is a director in the Dispute Advisory & Forensic Services Group of Stout Risius Ross in New
York, NY.
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 41 of 42
Woman Advocate Committee
Summer 2016, Vol. 21, No. 4
_________________________________________________________________________________________________________
EDITORIAL BOARD
Committee Cochairs
» Sabrina Beavens
» Beatrice O'Donnell
» Erica Calderas
» Heather White
Web Editors
» Tiffany deGruy
» Angela Turiano
» Suzanne Jones
Newsletter Editor-in-Chief
» Margaret I. Lyle
Newsletter Editors
» M.C. Sungaila
» Jackie Palik
» Elizabeth T. Timkovich
» Lindsay Breedlove
» Emily Farr
Staff Editor
» Genuine Pyun
The views expressed herein are those of the author(s) and do not necessarily reflect the positions or policies of the
American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).
ABA Section of Litigation Woman Advocate Committee
http://apps.americanbar.org/litigation/committees/womanadvocate
_________________________________________________________________________________________________________
© 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database
or retrieval system without the express written consent of the American Bar Association.
Page 42 of 42