Guide to Effective Negotiation Strategies - Anderson Kill, PC

132 Pages·2010·0.54 MB·English

ADR
Committee
AMERICAN BAR ASSOCIATION
Defending Liberty, Pursuing Justice

Guide to Effective Negotiation Strategies
Employed in Mediation of Large Dollar Disputes
ADR COMMITTEE
Guide to Effective Negotiation Strategies
Employed in Mediation of Large Dollar
Disputes
Author
Steven N. Taurke Joseph, Esquire
Chair, ADR COMMITTEE – TIPS
Contributing Authors
Floyd J. Siegal, Esquire, Mediator
Ettie Ward, Esquire
William Lancaster, Esquire
Jerry Strachan, Esquire
Derek Lisk, Esquire
Brian Ade, Esquire
Peter A. Halprin, Esquire

American Bar Association
321 N. Clark St.
Chicago, IL 60654-7598
800.285.2221
Steven N. Taurke Joseph currently is an Associate Vice President for Western World Insurance
Group in Franklin Lakes, New Jersey. He is a 1986 graduate of the University of Pittsburgh
School of Law. He recently served as the Chair of the Alternative Dispute Resolution
Committee of the Torts, Trial and Insurance Practice Section (2009-2010). Previously, he served
as Co-Chair of the Professional Liability Litigation Committee from 1999-2002 in the ABA’s
Litigation Section, and the Attorney Liability Subcommittee from 1997-1999, also with the
Litigation Section. Mr. Joseph has lectured on negotiation techniques for the Professional
Liability Underwriting Society, Practicing Law Institute, American Bar Association, and the
New York City Chapter of the Corporate Counsel of America.
Floyd J. Siegal is a partner in the law firm of Spile, Siegal, Leff & Goor, LLP., who currently
serves as a private mediator in Los Angeles and surrounding counties. Prior to transitioning to
mediation, Mr. Siegal was a civil litigator, from 1996 through 2008, whose practice was
primarily devoted to the defense of professional liability claims. Mr. Siegal began his career as a
criminal defense lawyer in 1978, after graduating from Loyola Law School. As a criminal
defense attorney, Mr. Siegal was privileged to serve as a commentator during the O.J. Simpson
trial, appearing regularly on "Rivera Live" and other similar programs.
William R. Lancaster is an attorney with Alford, Clausen & McDonald, where he practices in
complex litigation, and defense of nursing home, medical malpractice, workers' compensation,
and employment law claims. Mr. Lancaster earned a J.D. degree from The University of
Mississippi School of Law and a B.S. degree from Millsaps College. After practicing in
Mississippi for 9 years, he moved to Mobile and has practiced here since 1991. Mr. Lancaster is
a member of the Alabama, Mississippi, Texas, and Tennessee State Bars, as well as the Mobile
Bar Association, the Defense Research Institute, the Alabama Defense Lawyers Association, and
the American Bar Association. He is co-author of "Traps and Pitfalls of Medical Malpractice
Litigation," Voir Dire, May 1988, and the author of "A Practical Approach to the Punitive
Damages Trial: How, When, Where, and Why" MDLA Quarterly, Spring 2006. Bill has been
named as an Alabama "Super Lawyer" in Employment Litigation Defense in 2008 and 2009. Bill
has also been a member of the Alabama State Court Mediator Roster for a number of years, and
is a qualified Appellate Mediator.
Derek J. Lisk, a Partner at Shook, Hardy & Bacon LLP, is a trial lawyer and mediator who is
experienced in business, product liability, toxic tort, and environmental litigation. He has led or
served on litigation teams for Arthur & Gallagher & Co., Tyco Fire & Security companies,
DuPont, Pharmacia & Upjohn, Lockheed Martin, and other national and international companies.
In addition, he has spoken and published on a variety of legal topics, including alternative
dispute resolution, internet law, professional ethics, bioterrorism, and environmental litigation.
Brian R. Ade is a Partner at Rivkin Radler, resident in the New Jersey office. He holds the
designation “Certified Civil Trial Attorney” from the New Jersey Supreme Court, and is
admitted to practice in New York, also an experienced trial attorney with expertise in complex
civil and commercial litigation, much of Mr. Ade’s time is devoted to construction defect,
product liability, toxic tort, professional liability and insurance coverage cases. His experience in
mediation dates back to the mid-1980’s. Mr. Ade has lectured on topics relating to insurance
coverage at Seton Hall Law School and for the New Jersey Institute of Continuing Legal
Education.

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Gerald Strachan, a graduate of Rutgers School of Law- Camden, is a Managing Attorney for
Chartis Insurance. He serves on the Board of Directors of the New Jersey Defense Association
and as Chair of the Insurance Law Committee, he is also Chair of the Pennsylvania Bar
Association Staff Counsel Committee, Vice Chair of the Association of Corporate Counsel, Law
Department Management Committee, Vice Chair of the ABA TIPS, ADR committee and an
Editor of the Comprehensive Guide to the CGL policy. the ABA plans to publish the guide this
fall.
Ettie Ward, a graduate of Columbia Law School, is a Professor at St. John’s University School
of Law in New York City. She teaches and writes primarily in the areas of federal civil
procedure and court process. Before joining the law faculty at St. John’s, she was a litigator in a
major New York law firm. She has been active in the Federal Bar Council, the American Bar
Association, the City Bar of New York, and the New York State Bar Association. She is a
member of the Program Committee of the Federal Bar Council and is a Director of the Federal
Bar Foundation. She is currently a Vice-Chair of the TIPS ADR Committee and is Chair-Elect of
that Committee. She is also a member of the Executive Board of the AALS Dispute Resolution
Section and is Chair-Elect of the AALS Litigation Section. In addition, she is a practicing
mediator and serves as a pro bono mediator in federal district court.
Peter Halprin is an attorney in the New York office of Anderson Kill & Olick, P.C. He has
published several articles including the February/March 2010 cover story for Executive Counsel
entitled "Will Policyholders Be Compelled to Arbitrate International Disputes?" While attending
the Benjamin N. Cardozo School of Law, Mr. Halprin was an Articles Editor of the Cardozo
Journal of International and Comparative Law as well as a participant in the Sixteenth Annual
Wilhelm C. Vis International Commercial Arbitration Moot in Vienna, Austria.

I must give a special thanks to Dan Goldwasser of Vedder Price whose support and guidance has made this project
a possibility.
Steven Joseph

The opinions and statements expressed herein are solely the opinions and statements of the writer and shall not be
construed to be opinions, positions or statements of Western World Insurance Group or American International
Group.
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Table of Contents
Page
Preface
Why Mediation ............................................................................................. 1
Why Mediation Is Different .......................................................................... 3
The Mediation Process ................................................................................ 10
Criteria And Timing For Mediation Selection ............................................ 18
Negotiation Strategies ................................................................................. 27
Special Strategies For Special Situations ................................................... 93
When The Case Does Not Settle At Mediation ......................................... 118
Taking Power in the Negotiation…………………………………………127
ADR COMMI TTEE

PREFACE
This book on mediation refers to strategies employed in large dollar disputes so
obviously, there is a question; are the strategies also relevant for those disputes that are
not “large dollar.” Also, what do we mean by “large dollar.”
These are fair questions, and many of the strategies discussed in this book certainly apply
to disputes that involve small dollar amounts, which are certainly subjective, by the way.
Note that the book is written with a focus on “mediation”, and does not stick a “large
dollar dispute” stamp each step of the way.
The reason that I refer to “large dollar disputes” is because extra care and thought has to
be taken into consideration when you have a lot at stake. These days, practically every
jurisdiction has some institutionalized mediation program and every case, at some point,
may simply be ordered to mediation. So, when you have a larger dollar amount dispute, it
may be natural to do what you have always done. Get the mediator who is available,
prepare the two-page submission, show up and argue your case, make unreasonable
demands and offers, and have the frustrated mediator try to split the baby.
This book refers to “large dollar disputes” because here too much is at stake to do
business as usual. We are dealing with differences of hundreds of thousands, and
sometimes millions of dollars, and where you end up in the mediation process may hinge
on what kind of mediator you have selected, what kind of submissions you have agreed
upon, whether you bring your expert, whether you have opening statements. The list goes
on and on.
So, what we attempt to do is take the process and break it to down to bits and pieces with
stories, pointers, and tips thrown in along the way. What we hope you come away with
here is an enjoyable and informative read, but most importantly, understand that when it
comes to large dollar disputes, it is not a business as usual situation.
Steven N. Taurke Joseph
Chair, TIPS ADR Committee
ADR COMMI TTEE

1
PAGE

WHY MEDIATION
I
was faced with a very interesting paradox fifteen years ago after I got home from a
settlement conference in Hartford, Connecticut. The settlement conference had ended
with the parties coming to a resolution with neither side too happy with the result. The
parties were only able to put aside their differences after the settlement judge commented,
“Principles are a nice thing to have until they get in the way of reason.”
I drove home that day impressed with that comment from the settlement judge. But that
feeling was short lived. Telling my wife this line from the judge, she immediately
responded by saying. “Without principles, there is no reason.”
Though we hear all the time how the mediation process is both a more time and cost
efficient process, perhaps the best reason to choose mediation as the means to resolve a
dispute between parties is that, when done correctly, the mediation process can be the
only way that each of the disputing parties, based on their own set of principles, can find
a reasoned approach towards resolving their dispute.
This can be seen in how mediation is defined. Mediation is a process in which an
impartial third party – a mediator – facilitates the resolution of a dispute by promoting a
voluntary agreement (or “self-determination”) by the parties to the dispute. A mediation
facilitates communications, promotes understanding, focuses the parties on their interests,
and seeks creative problem solving to enable the parties to reach their own agreement.1
Typically, when I employ mediation, it involves rather complex litigation matters. Using
the above definition as our guideline, it can easily be seen why litigation arising from
complex claims may involve the kinds of matters best suited to the mediation process. By
their very nature, these cases involve complex issues that a jury may find very difficult to
grasp. These cases often are very document intensive, and thus, make the analysis for a
jury even more difficult. Too often, neither side has a compelling or appealing witness.
Neither side has a witness or group of witnesses who can act as a storyteller for the jury.
The battle of experts may come down to which expert can better keep the jury awake.
The other option too often is the process mentioned at the beginning of this writing, that
is, trying to settle a matter before a settlement judge or worse, after years of discovery,
before the trial judge on the eve of trial (or as people in the business say “on the
courthouse steps”). The settlement judge and trial judge each have an interest, first and
foremost, in moving their docket along. Thus, when a settlement judge says “principles
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are a nice thing to have until they get in the way of reason,” you can be very certain that
it is your own principles and his or her own reason that they are referring to.
We settled the case. We paid more than we wanted to pay, and the opposing side
accepted less than they wanted to get. We all looked very forlorn. So the Judge
commented: “This settlement had all the markings of a good settlement.” So, I asked the
Judge what these markings may be. He commented that that this had the markings of a
good settlement because neither side was happy with the result! In other words, a good
settlement will be the one that my boss really gets pissed off at me when I get back to the
office!!
Insurance Adjuster
Those are my principles, and if you don't like them... well, I have others.
Groucho Marx
U.S. comedian with Marx Brothers (1890 - 1977)
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3
PAGE

WHY MEDIATION IS DIFFERENT
W
hile every litigator is likely to have engaged in settlement negotiations at one or
more times during his or her career, such negotiations that do not involve a
mediator provide little guidance as to how to approach mediation.
As more fully explained below, mediation differs greatly from settlement negotiations,
even those negotiations conducted with the assistance of a judge or magistrate. As such,
we need to explore the mediation process and the role of lawyers in the context of a
mediation.
Many litigators who have a “take no prisoners” approach will not only view mediation
with skepticism, but also with disdain. Their clients retain them to vindicate their rights
and actions and the very goal of mediation is compromise. Even more disheartening is the
fact that they have been trained to take discovery, to engage in motion practice and to
present cases to a jury; and these skills have little or no place in the context of a
mediation. In short, they find the very notion of compromise as a sell out of their client’s
interest and a mark on their record as a successful litigator.
AND THE WINNER IS . . .
Negotiation as a necessarily competitive process that paradoxically requires cooperation
in order for the parties to reach their shared destination, i.e., resolution.
The process is competitive in that each party understandably desires to be the “winner”
by obtaining the most favorable outcome that is possible, but the process requires
cooperation because a negotiated resolution cannot be achieved without concessions and
compromise.
Sometimes, the competitive nature of negotiation thwarts the process from the very start,
with each party staking out an extreme position, thinking it will enhance the likelihood of
that party being the “winner.” All too often, however, the strategy fails and negotiations
end abruptly.
A better strategy will usually be to take a more measured approach to the negotiations,
sending a clear message of cooperation, i.e., that you want to work together to achieve a
mutually acceptable compromise.
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Sometimes, the need to be the “winner” thwarts the process at the very end, with each
party refusing to make the final concession – often leading to the suggestion that the
mediator assume responsibility for the outcome by making a mediator’s “proposal”
A better strategy may be to let the other party be the “winner” that day, especially if you
think that you might someday find yourself involved in future negotiations with the same
person and that you might want or need that person to return the favor.
The point to remember is that when each party insists on being the “winner,” it may not
be possible to reach a resolution – and when the parties fail to reach a resolution that
might otherwise have been possible, everybody loses.
Floyd Siegal
Unfortunately, we live in a culture that celebrates winners and hates losers. Also, in a
mediation setting, you don’t want to present yourself to your client as a loser unless you
want to lose the client. So, I understand that it is very hard to give up the temptation of
trying to be a winner.
But, in mediation, there is a way around this dilemma. When I mediate, I intentionally
hope that I can convince the other side that they are the “winner”. There is the public
position number one – where I am willing to go to resolve the case as my winning
position. This is also the position that I know will not resolve the case.
Then, there is my private or “real” winning position. I let the mediator work to get me off
the “public winning position” to go to my “private winning position.” My opposing side
thinks that they beat me, and I ended up exactly where I wanted to be.
Steven Joseph
While such thoughts are not unusual, they are also the product of a different era. The fact
is most clients are primarily interested in pursuing their businesses and personal
activities, and litigation generally is a distraction from those endeavors. Thus, the client
in most cases would like to have the dispute resolved so that he or she can again
concentrate on making a living. It is for this reason that most clients would gladly forego
the pleasure of watching their attorney embarrass, if not demolish, their adversary in a
brutal cross-examination. Moreover, the rising costs of vindication at trial have led the
vast majority of clients to implore their attorneys to find a more cost-effective way of
resolving their disputes.
Even those attorneys who accept the fact that mediation is gradually replacing litigation
as their clients’ preferred dispute resolution process still view mediation as simply
another forum in which to argue their client’s case. They present their arguments in the
same “take no prisoners” and “winner takes all” approach that they customarily use in
their closing arguments. Indeed, they are loath to make concessions of any kind.
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