Beyond Mediation: The New Frontier of Dispute Resolution
Those who read the recent obituary of JAMS founder Hon. H. Warren Knight (Ret.) will be reminded that mediation was still a revolutionary idea in the early 1980’s and took nearly twenty years to gain widespread acceptance among litigators as an effective tool for resolving cases. Today, attorneys and many of their clients are sophisticated consumers of mediation, integrating the process into most if not all of their cases.
Now that the legal community has fully embraced private dispute resolution, new processes are developing that, under the right circumstances, can be more effective than a standard mediation at overcoming barriers to settlement. At a recent WLALA program, attendees learned from a panel of distinguished neutrals, attorneys, and a jury consultant, about three relatively unknown dispute resolution models that deserve serious consideration: Standing Neutral, Early Neutral Evaluation, and Jury Mediation.
The Standing Neutral. Barbara Reeves Neal of JAMS presented the case for contracting parties to appoint a “standing neutral” at the beginning of their business relationship to avoid litigation by resolving disputes in “real time.” First developed in the construction industry to keep the peace on construction projects, it is now expanding to all types of long-term business relationships. In its simplest form, the parties mutually appoint a trusted, independent neutral with subject matter expertise to act as a “first responder” whenever disputes arise so that they can be resolved promptly and economically without resort to litigation. The standing neutral approach succeeds because the previously selected neutral is immediately available, already familiar with the parties and their business relationship, and sets an expectation at the outset of straightforward dealing without legal posturing.
Ms. Neal described several examples in which she has been called upon to act as a standing neutral, including a pharmaceutical industry joint venture that needed to iron out issues as they arose over intellectual property rights and marketing, a long-term energy supply contract that required periodic pricing adjustments, and a closely held corporation with two equal shareholders who had different goals for the development of the company as it reached a crossroads for its future. Having a standing neutral at the ready, she explained, is like having a vacuum cleaner in your closet. If you don’t have one, you tend to postpone the clean up until the mess is unbearable and everyone is pointing fingers. Having a vacuum cleaner available encourages everyone to tackle small messes before they become much bigger ones.
Early Neutral Evaluation. “ENE” has been an accepted dispute resolution method in Northern California for over a decade, largely due to its strong endorsement by federal judges in the Northern District. It has yet to gain traction in Southern California, however, escaping the attention of most attorneys who opt instead for mediation when completing their CMC statements.
According to Max Factor, an ARC neutral who serves as the Los Angeles Superior Court ADR representative for ENE, or “NE” as it is generally referred to in Los Angeles, the oversight is truly unfortunate. ENE can be much more effective than mediation in instances where the expectations of a party or attorney are completely unrealistic or both sides are open to an objective evaluation of the merits. Gail Killefer, ADR Program Director for the USDC, Central District, and former evaluator for the Northern District and consultant on the design and implementation of the LASC Neutral Evaluation Program, added that ENE can also provide much needed guidance early in a case on narrowing and prioritizing issues even if the evaluation does not lead directly to a settlement.
ENE differs from mediation because the parties authorize the neutral to evaluate the merits of a case after a brief presentation of evidence and legal argument in a joint session. The neutral and counsel are free to design the procedure for presenting evidence, e.g., by counsel’s summary of evidence or a direct examination of key witnesses by counsel or the neutral. Typically, after the evidence and legal analysis have been presented, the neutral gives the parties an option of jointly electing to proceed to mediation before delivering the evaluation. The parties can also elect to mediate after the neutral issues his/her evaluation.
Mr. Factor, Ms. Killefer, and Ms. Neal, also an experienced evaluator, all concurred that ENE can be more effective than an evaluative-oriented mediation because mediators usually only share their evaluations confidentially in private caucus and each side assumes the mediator is “beating up the other side” as well. In an ENE, the neutral’s evaluation is transparent and therefore more likely to assist attorneys who have client control challenges or persuade attorneys blinded by their own zealous advocacy.
Jury Mediation. When previous attempts at mediation have failed and parties appear destined for a high-stakes jury trial, there is a brand new dispute resolution method available that combines the benefits of mediation with mock jury analysis. Developed jointly by Judicate West and jury consultants at Decision Analysis, “Jury Mediation” is designed to resolve some of the most difficult cases where the unpredictability of juries is the biggest obstacle to overcoming impasse at mediations. Working with both the mediator and jury consultant, counsel identify the key issues for jury feedback and make a brief trial presentation with actual witnesses before a focus group arranged and moderated by Decision Analysis. After seeing and hearing the focus group’s comments, the parties and counsel sit down to mediate, frequently on a later date after they have had an opportunity to absorb the jurors’ comments and findings. According to Richard Gabriel, President of Decision Analysis, the shared cost of jury mediation is very reasonable and the format is adaptable to the case and needs of the parties.
Panelists Richard Gabriel and lead trial attorney Christopher Hiddleson at Cal Trans discussed the first test case for Jury Mediation which succeeded in resolving a high-damage personal injury suit shortly before trial. The suit involved an extremely sympathetic young girl who suffered third degree burns over much of her body and loss of most of her right hand after a driving accident blamed on Cal Trans. Although negligence was highly disputed, the experts estimated her injuries at nearly $10 million and the girl’s family had vigorously resisted prior efforts to compromise. Mr. Hiddleson agreed to become the “guinea pig” for this new dispute resolution model believing that mock juror feedback, after hearing and seeing the actual plaintiff on the stand, was the only way to bridge the perception gap. He assumed correctly – the eye-opening comments of the focus group combined with the mediator’s skill succeeded in breaking impasse and reaching a settlement.
Christine Page is chair of WLALA's ADR Section and Partner at Gilchrist & Rutter.