As Featured on Law360: Shepherding Insurers Through The Mediation Process

In a recent Law360 article, mediator Bruce Friedman discusses ‘Shepherding Insurers Through The Mediation Process’.

While insurance lawsuits involving claims directly between an insurance company and its policyholder make up a relatively small percentage of our courts dockets, cases triggering liability insurance from automobile accidents to securities class actions constitute a very large percentage of all cases before our courts. Settlement of these cases requires the proper shepherding of the insurer(s) defending/covering the case. The participation of the insurer(s) at the mediation is necessary to the ultimate resolution of the case. The challenge is making sure that the insurer(s) are prepared to participate in the mediation in a meaningful way.

The Biology of Decision-Making

It is a common understanding among trial lawyers that decisions are made emotionally and not rationally. We are always looking for the emotional hook on which to hang the case and sway a jury to see the case through that emotional prism. Now science is teaching us that decision-making is actually physical. In a recent…

The Antidote to the Spiteful Litigant

We have all encountered the spiteful litigant. Maybe it’s the husband in a divorce who says that he is going to Las Vegas and putting the marital estate on red or black at the roulette wheel. If he wins he will split it with his ex; if he loses, neither of them get anything. Or perhaps it’s a partner in a dispute that says that he would rather the business fail then have to share its value with his soon to be ex-partner; or a litigant that states that he would rather drive the defendant into bankruptcy even if it means that he would not recover for his injuries.

How does one deal with spite in the context of a mediation? Recent scientific studies of spite provide the answer. Spite is defined as the urge to punish, hurt or humiliate another, even when one gains no obvious benefit and may well pay the cost. New research summarized in a recent New York Times article concludes that spite is both a vice and a virtue that may be linked. Not surprisingly, in one survey conducted by David K. Marcus, a psychologist at Washington State University, spitefulness generally cohabited with traits like callousness, Machiavellianism and poor self-esteem.  Spite is not associated with agreeableness, conscientiousness or guilt.

The Mediator’s Proposal: The Ultimate Impasse Buster

The end of the day is nearing and the mediation has ground to a halt.  The parties have narrowed the gap between them, but cannot close it.  Is it time to suggest a mediator’s  proposal?  Does a proposed settlement amount coming from the mediator have a reasonable likelihood of acceptance?  Are the parties interested in having the mediator make a proposal?  If the answer to these questions is yes, then it is time to employ the ultimate impasse busting technique, the mediator’s proposal.

But what amount should the mediator propose?  Splitting the difference between the last demand and offer has undoubtedly been discussed with the parties and rejected.  Otherwise, a mediator’s proposal would not be necessary.  How does the mediator avoid the appearance of favoring one side over the other when the contemplated mediator’s proposal is closer to one party’s last position than the other’s?  Should the mediator have a reasonable degree of confidence that the plaintiff will accept the proposed amount?Should the mediator have a reasonable degree of confidence that the defendant will pay the proposed amount?   Is one of these factors more important than the other?

Ranges and Brackets — Impasse Busting Techniques for Your Consideration

The negotiation has ground to a halt.  The parties have been at it all day and they are frustrated that there remains a big distance between them.  The negotiations have proceeded in a traditional incremental way.  Plaintiff’s last number is over $1,000,000 and the defendant is stuck at $100,000.   At the rate things are going, it would take days to bring them into a zone of agreement.  Again, this is an opportunity for the mediator to strut her stuff.  Possible techniques to break the logjam include a consideration of ranges.  For example, the mediator might suggest the following:  Would you, defendant, settle the case in the low six figures meaning between $100,000 and $300,000 if the plaintiff would accept a number in the high 6 figures, $700,000 to $900,000?

If the parties do not like the mediator’s numbers, then the discussion turns to what numbers they would consider.  This is an invaluable discussion from the mediator’s perspective. It gives the mediator information about where the parties are willing to settle and provides a means to determine whether and at what ultimate figure the case can settle.  If the parties agree to the suggested range, the mediation has taken a big step forward toward settlement and compromise can ultimately be reached.

Bruce A. Friedman Appointed as Arbitrator to IFTA

Bruce A. Friedman has been appointed as an arbitrator on the Independent Film & Television Alliance (“IFTA”) Arbitration Panel.  IFTA was created by the American Film Marketing Association, the trade association of producers and distributors of independent film and television programs as its arbitration system to resolve entertainment industry disputes relating to production, finance, and distribution of independent films and television programs.
The members of the IFTA panel are distinguished attorneys with substantial experience in litigation and complex entertainment related transactions. Bruce, who was appointed to the Los Angeles Panel, is looking forward to participating alongside his esteemed colleagues. He will contribute his knowledge and vast litigation experience in connection with the financing, distribution, insurance and bonding of independent films.

Bruce A. Friedman Named as ‘Rising Star’ Among the ‘Top 50 Neutrals in California’ by the Daily Journal

Congratulations to Bruce A. Friedman for being named as a Rising Star among the ‘Top 50 Neutrals in California’ for 2013 by the Daily Journal. The Daily Journal compiles this prestigious list annually, researching which California neutrals handled the most high stakes and most influential cases, and which neutrals were most in demand. Having transitioned from litigation to…

What It Takes to Settle

I am a true believer in the evaluative approach to mediation.  I not only enjoy engaging counsel and the parties in a discussion of the issues in a case, but I know that this discussion will eventually lead the parties down the path to settlement of the case.  When the actual negotiation begins, I am a proponent of a principled negotiation in which the settlement offers and counter offers are tied to the evaluation of the issues of the case and the likelihood of success or failure at trial.  But the evaluative method only goes so far.  It is an effective way to narrow the gap between the parties, but it may not be enough to close the gap.  I see this routinely in cases where one party has a much stronger case than the other and in light of the strength of the case and based on the evaluative approach, that party’s last and best offer is close, but not enough to settle the case.  The reason lies in the mediation process and the psychological effect on the party with the weaker case of having the mediator consistently holding up the mirror to the case and working that party up or down during the course of the mediation.  Ultimately, I hear the refrain, “they just don’t respect us and our case.”  In spite of my efforts to persuade counsel and party that it is not personal.  It is personal for them.

After the evaluative method has been exhausted, and the parties have narrowed the gap between them, the question on the table is what does it take to settle the case.  Should the party with the stronger case, make a final effort to bridge the gap?  Is there a settlement premium that should be paid or accepted?

I believe that there is a settlement premium that comes into play and should be seriously considered for a number of very important reasons.

1.  The evaluation approach is not science.  Reasonable minds can differ.  There is the old adage that even the best case has no better than 80/20 odds attached to it and no one could quibble with the odds dropping to 70/30 or even 60/40;

Online Mediation — Press Delete

As you might be aware, there is a LinkedIn Group dedicated to Online Dispute Resolution, featuring announcements of conferences on online mediation and blogs on new products that will revolutionize technology assisted dispute resolution. This group is just the latest example of a renewed interest in online or e-mediation as a means to resolve disputes. …