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Washington Lawyer

Legal Spectator: The Perfect Case

From Washington Lawyer, February 2008

By Jacob A. Stein

spectator“Mediation,” said the thoughtful gentleman in the back of the room.

“Arbitration,” said the businessman who hates lawyers’ fees.

“Litigation,” said the litigator slapping the table and declaring “we must teach them a lesson.”

Mediation is a nonbinding way to resolve disputes by using a mediator. It works well if the parties are acting in good faith and neither is obsessed with matters of principle or is seeking revenge.

The mediator cannot compel a settlement. She must gain the respect of the parties so they will respect her advice concerning the terms of a settlement when the parties want it.

She must know the names of the parties, the key dates, the controlling events, and the few legal principles at issue. She will help the parties rise above their natural tendencies of greed, resentment, hypocrisy, and disappointment.

She will flatter the lawyers in the presence of their clients. She will be resourceful in finding ways around the roadblocks.

She will meet privately with each side, receiving information from one and passing it on to the other, and, if requested, she will sparingly offer a sage comment. Lord Chesterfield, in a letter written to his son on May 22, 1749, describes the art of the successful mediator:

Some people are to be reasoned, some flattered, some intimidated, and some teased into a thing; but, in general, all are to be brought into it at last, if skillfully applied to, properly managed, and indefatigably attacked in their several weak places. The time should likewise be judiciously chosen; . . .

The mediator, like the priest, the doctor, the lawyer, and (faithful) spouse, keeps everything secret.

Binding Arbitration
Binding arbitration does away with burdensome discovery, a lengthy trial, and an appeal. The complicated rules of evidence and procedural rules are only advisory. There is no jury. Sometimes it does all these things.

The arbitrator should aspire to follow Rule 1 of the Federal Rules of Civil Procedure. The Rules “shall be construed and administered to secure the just, speedy, and inexpensive determination of every action.”

The arbitrator, having Rule 1 in mind, perceives which side wants a delay, the exploration of irrelevant issues, and needless discovery. He discourages the filing of papers.

He encourages oral argument of each motion. Before the hearing the arbitrator gives notice of his tentative ruling. The motion should be ruled upon at the conclusion of the oral argument.

Some people believe arbitrators find a way of splitting the difference. Professional arbitrators are aware of this gossip and try to avoid splitting the difference. Also, there is controversy concerning whether arbitrators can include in their verdict an award of punitive damages.

In the contracts that provide for arbitration of disputes, the arbitration clause itself gets so complicated that the arbitration agreement itself becomes an issue. In certain law firm agreements there is an effort to discourage litigation among the partners by including some unusual things in these arbitration clauses. The place of the arbitration may be identified and placed at a point intended to discourage a partner who wants to make a claim.

What seems to be the best arbitration clause is to settle on the arbitrators in the arbitration clause.

Big-time commercial and class action litigation is an effort to destroy the other party. It is warfare by other means, out in the open for all to see. It is oppressive, in time and money. Character defects in the parties are exposed and exploited. Conflict issues flare up. Sanction motions are filed. Allegations are made concerning the destruction of documents and e-mail.

There may be interlocutory appeals. Unforeseen events may arise and change the course of the litigation. Isn’t there a proverb which says that a piece of paper that floats into the courtroom through an open window may affect the outcome?

There are firms ready to dispatch, at a moment’s notice, troops of lawyers trained to look through the thousands of documents, good and bad, that are in an unheated, bug-infested warehouse. The litigants may never see the judge who granted summary judgment against them. And then there is the appeal and the retrial.

Let’s see what happened to the plaintiff’s perfect case with which we began. Counsel for the plaintiff first chose mediation. The mediator violated each of Lord Chesterfield’s recommendations. When the mediation ended, the parties were further apart than when the mediation started.

Counsel considered arbitration but when he learned three arbitrators must be assigned at high hourly rates, he chose litigation.

The complaint was met with motions to dismiss. When the motions were denied, the defendant filed a counterclaim. There followed discovery disputes, and with each motion denied, there was a motion for reconsideration. The matter has been pending for three years without a trial date.

Moral: May your worst enemy have a lawsuit in which he knows he is in the right.

Jacob A. Stein can be reached by e-mail at [email protected].