Abstract: Structured settlements for non-physical injury disputes, such as those arising from wrongful termination and similar employment-related lawsuits, remain a surprisingly underused and unappreciated settlement resolution tool. By taking the time to understand how this useful strategy can positively impact settlement talks, mediators will be better positioned to demonstrate how a series of tax-deferred cash flows can help level out the plaintiff’s tax burden leading to a better, fairer outcome for all parties.
Wrongful termination and similar employment lawsuits present litigants, their counsel and mediators with a few challenges not encountered during negotiations involving most other types of personal injury claims.
One of those challenges is taxes. Unreasonable taxes. Unfair taxes.
Unlike plaintiffs who compromise their physical injury disputes and pay zero taxes on their settlement proceeds (exclusive of punitive damages), those who choose to resolve their employment differences for a single lump sum can end up relinquishing an excessive share of their recovery to taxes.
Regrettably, this grim reality isn’t often realized until well after the case has resolved. Even more regrettable is the fact that overpaying taxes on employment settlements is completely avoidable.
Mediators who are conscious of these dual realities and understand how easily they can help parties overcome them stand to distinguish themselves as conscientious conflict arbitrators who can bring about the fairest of all possible outcomes.
Physical Versus Non-Physical Injury Claims
26 U.S. Code § 104(a)(2) exempts from taxation any damages (other than punitive) whether paid as a lump sum or as periodic payments received “on account of personal physical injuries or physical sickness” even though the word “physical” remains undefined.
Prior to 1996, however, the word “physical” had yet to be added to the code leaving the tax treatment for many types of claims open to interpretation. For obvious reasons, practitioners sought to qualify all sorts of damages, emotional distress chief among them, under § 104(a)(2) in their complaints even when the origin or fact pattern of the claim strayed from the original intent of the law.
Several court cases later (primarily United States v. Burke, Commissioner v. Schleier and Murphy v. IRS), prompted legislatures to address this tax ambiguity culminating with the Small Business Jobs Protection Act of 1996 (Public Law 104-188). The new law added the word “physical” to the code and clarified that emotional distress, unless stemming from an underlying physical injury, was indeed taxable. (See § 1605(b) of P.L. 104-188)
Taxable cash awards, particularly large ones, create serious tax inequity by catapulting the plaintiff into an extraordinarily high tax bracket for a single year even though the award may have been intended to compensation the aggrieved party for years into the future, even a lifetime.
Where is the equity in this?
Clarity Creates Opportunity
With the door for preferential tax treatment of damages permanently closed for wrongful termination and similar torts, the structured settlements industry stepped in to solve the fairness imbalance created when plaintiffs are forced to accept their settlement or verdict in a single lump sum.
By modifying the Qualified Assignment process used to facilitate physical injury structured settlements which pay future income that is 100% income tax-free, the industry was able to create an alternative which allows plaintiffs involved in nonphysical injury claims to mitigate their tax liability.
A Non-Qualified Assignment process now exists which helps parties arrange to have their settlement dollars – and their tax liability – spread out over time. A favorable 2008 Private Letter ruling from the Department of the Treasury (PLR 200836019) reinforced this settlement alternative as a sensible money saving tax deferral strategy.
Save Money, Save Face
Plaintiff A is a single taxpayer earning $80,000 a year (23% tax bracket) after being fired from his job. He plans to work another 15 years but $80,000 is about half of what he had been accustomed to earning. He resolves his wrongful termination lawsuit and nets $1,000,000 which he opts to take in cash.
Using current tax rates for a California taxpayer, Plaintiff A will pay roughly $467,000 in taxes on his $1,000,000 recovery.
Plaintiff B, on the other hand, is also a single taxpayer in identical circumstances and resolves an identical lawsuit netting her $1,000,000. However, she chooses to have her recovery spread out over the next 15 years to avoid the unreasonable, one-time, 47% tax burden. Instead, she chooses to have it paid out over time via a Non-Physical Injury Structured Settlement which lowers the tax she pays on her $1,000,000 to $396,400 – a 15% reduction – netting her $70,600 MORE than if she had chosen the cash lump sum. All at no out-of-pocket cost to anyone.
Aside from the immediate tax savings, the best part about Plaintiff B’s settlement is that it returns her to her pre-termination cash flow situation. The structured settlement generates roughly $80,000 a year for the next 15 years which, when coupled with her current salary, brings her back to $160,000 of taxable income she had been accustomed to. All on a tax advantaged basis.
All Sides Benefit
Cash offers and demands limit the parties during taxable damage negotiations and can lead to impasse. Employing a Non-Physical Injury Structured Settlement strategy instead affords both sides a better opportunity to bridge the negotiation gap more effectively by focusing on the plaintiff’s after-tax income rather than the gross value of the settlement. Mediators who embrace this creative, needs-based approach to negotiations validate their reputations as fair-minded arbiters who could very likely see their practices enhanced as a result.
Imagine something you really, really want, something that would make your life immeasurably better. Now imagine that you can’t find it anywhere. And, when you finally do find it, you’re not 100% sure you can trust the person selling it.
As a business owner, the seller has a duty to make it easy for customers – like you, who can benefit from what they do, to find what they’re looking for and feel confident in their decision to buy.
As a mediator who owns their own practice, you have that same duty.
Unfortunately, many qualified mediators give up on building their practices after a short time, because they hit unexpected challenges and worry they won’t reach the income they desire. Chances are, these mediators just didn’t know how to approach their duty as a seller.
If you want to build a rewarding mediation career, you should take time to learn about the business challenges you will face and how to overcome them.
Although some challenges will depend on personal variables, including location, area of practice, and length of time the practice has been in business, we will discuss some of the most common challenges today.
When you’re just starting out, it can be difficult to be confident in your abilities. But, the only way to build your confidence is through experience. Hang in there and keep going! The more mediations you conduct, the clearer it will become that you really do have the tools to mediate successfully.
The more confidently you can talk about your skills and experience, the easier it will be to convince new clients that you can resolve their dispute. This will help build trust, in turn, making their decision to hire you much easier.
Number of Clients
Almost no one starts a business with a proverbial rolodex filled with clients ready to pay for their services. Like any business owner, mediators need to create a marketing plan to attract new clients to their business.
It’s important to remember that marketing isn’t a one-and-done activity; mediators must constantly engage in marketing activities to remain visible to potential clients.
A good place to start is by identifying your target market and the personal attributes that make you an ideal fit for their specific needs.
Make sure to think about the things you can offer clients that competing mediators can not or do not currently offer. If you only advertise the abilities that are common to all mediators in your specialty, it will not sufficiently reveal what makes you the right choice.
You’ll also need to think about the channels you use to communicate this message. Do you have a website? Are you on social media? Do you use print ads? Do you write a blog?
No matter how you display your skills, the message should be clear and consistent for all of them.
Online visibility is very important. It’s how most people search for the products and services they need. At a minimum, a skilled mediator should have a professional-looking and useful website, and learn how to write an effective mediator profile.
Like a confident attitude, the ability to prove you have put time into your craft through training goes a long way to build trust with potential clients.
But because of the dynamic nature of mediation, it can be hard to quantify sufficient training.
Some states require minimal training, while other states do not mandate training requirements for mediators at all. This, unfortunately, leads to unskilled people calling themselves mediators, and potentially risking their personal reputation and the reputation of mediation in general.
Even mediators who seek out training can find themselves unprepared, since there is no universally accepted standard for training in the United States.
So how do you learn the right skills?
Finding a 40-hour basic mediation training that you trust to provide adequate instruction is a good place to start. This is usually enough to be recognized by the courts as qualified to mediate, if that is the goal, but is really very minimal.
Dispute resolution training providers, colleges, and universities are all resources for more advanced training. You can also find educational and training opportunities at industry conferences and workshops. These types of opportunities are often more agile in their content, allowing them to capture the constantly evolving philosophies in mediation.
Being a relatively new discipline, there are plenty of professionals working in the court system around the country who don’t understand how beneficial mediation can be for individuals involved in a lawsuit.
When supporting entities don’t have confidence in mediation, it can be much harder to convince disputants and their lawyers to take advantage of it.
You can tackle this challenge by being an advocate for mediation in the legal community. Get to know the lawyers and judges in your area, perhaps by holding an open house in your practice. Or, volunteer to give a talk at a conference or meeting for legal professionals.
Be open to talk about the benefits of mediation, and be prepared with concrete examples of those benefits. Put your mediator’s calm and trustworthy demeanor to use by persuasively discussing why mediation is such a promising tool for disputes.
The relationships you build may just change everything!
As we suggested in the opening paragraphs of this article, many mediators give up when they don’t initially see the results they were looking for.
You will face many challenges in every step of your business journey, but the secret to finding success is to seek out trusted advice when you hit a roadblock, then keep plowing through it.
Just keep working, keep marketing, keep learning, and keep communicating, and you will be unstoppable!
The most complex organ of the human body is the brain. It oversees every bodily function and lets individuals interact with one another. Research into the brain provides an in-depth look at human nature and an understanding of human behavior.
Neuroscience is the study of the nervous system. It explains why behavior changes under stress. These changes relate directly to fluctuating serotonin levels in the brain. In other words, stressors lead to the instability of serotonin levels. This impedes a rational decision on a resolution in a taxing situation.
What happens in a dispute?
Disputing parties often believe they have the bulletproof facts, the proper reasoning, and the soundest position in the disagreement. This frame of mind can intensify the conflict. Quite typically, one of the parties presents a constructed resolution and outlines what they deem a logical point of view. When this resolution is rejected, the presenting party is bewildered by their adversary’s conceived irrational reaction.
Unreasonable expectations and disappointment can form by assuming that one’s well-crafted argument and dispute resolution would never be rejected by the receiving party. When a proposal is rejected, the parties stop listening to any other views outside their own. When this occurs, getting the two sides to agree on a resolution is a daunting and difficult task.
The role of the mediator
A mediator evaluates the interaction and body language of the parties by contemplating the mediation style that will be most effective in resolving the dispute. Neuroscience provides sound research into the different methods to achieve this. Facilitating becomes a vital technique through the course of the dispute resolution process by allowing the mediator to be aware of the needs and interests of the parties.
The negotiating process commences by identifying what drives the parties’ thought process, understanding their relationships, and determining the compelling factors behind the dispute. The matter’s importance to each party is also considered. The mediator identifies the parties emotional and logical processes, allowing the parties to listen, acknowledge, and respect each other’s interpretation of the dispute.
These findings have enormous implications in a dispute resolution. Parties creating a resolution based on reasoning alone are destined to fail. The negotiation process involves understanding the tangible and emotional factors making up the dispute. Relying on a logic based argument creates unreasonable expectations, speculations, and opinions.
A mediator must create a vision for the parties to understand each other’s points of view. This allows the barriers separating the parties to break down, making for a sound decision. By creating a safe environment, the parties come to make the decision on their own accord. At this point, additional reasoning tactics and further persuasion are not necessary. People do not base their decisions on logic, people formulate decisions based on their well-being.
Those attending the 28th Annual Conference of SCMA had the privilege of hearing the keynote address of Senator George Mitchell, former Majority Leader of the United States Senate. In his remarks, Senator Mitchell noted how divisive the two presidential campaigns had been, and emphasized the need to change the political climate.
“Thank God for Donald Trump” was a sentiment that derived from a most unlikely source.
I was teaching a conflict resolution workshop to a group of Rotaracts (high school aged pre-Rotarians) at the Rotary International Peace Conference, and — since Rotarians are world renowned do-gooders who put “service before self” — I felt like I had a hall pass to take these young peace advocates deeper than your average high school class. We were moving through a section on emotional intelligence, empathic listening, and exploring what you can learn about someone’s needs if you aren’t preoccupied with being hurt by their language. After an impassioned discussion about cyber bullying and disparaging remarks made about Islam, a young Muslim girl in the front row looked up at me and asked in an inquisitive, challenging tone, “So what you are saying is…thank God for Donald Trump?”
I stood awkwardly in front of the room filled with high schoolers –a firing squad of eyeballs waiting to see if I actually believed what I preached. I took a deep breath, swallowed hard and said, “Yes.” The class giggled acceptingly in response and leaned in closer.
It is, after all, a logical fallacy to think that if Donald Trump were to disappear, so too would racism, bigotry, misogyny and distrust of a centralized government. That all of a sudden, “Poof!”, people would cease to feel marginalized, disenfranchised and dehumanized. After all, the man isn’t saying anything not already growled over dinner tables or joked about in bars. He is simply saying it openly and bombastically over the airwaves, and it echoes unavoidably through every form of media — social or otherwise.
Trump’s fiery rhetoric and his movement expose a deep wound in our country that has existed nearly since its inception. The Civil War was the first manifestation of this divide. Fittingly, that war didn’t end with an actual peace treaty at the Appomattox — merely a forced promise to surrender. For many, the resistance never ended. And, despite the best of intentions, Reconstruction was not reconciliation. The process did little to unite our country in more than words and titles. This chasm is further evidenced in Hollywood film productions; what is the easiest way to make a person sound stupid and low class? Give him a Southern accent.
It is impossible to know if Donald Trump actually believes what is coming out of his own mouth. What he has mastered, however, is the ability to give a voice to his following and to those who have never before felt heard. It has never been okay to speak these concerns out loud; rather, political correctness has banished these sentiments to silence in the public arena. Donald Trump says to hell with those shackles and speaks whatever comes to mind or is channeled from his audience. AND IT FEELS GOOD TO BE HEARD. If you need proof, you need only look at footage of his rallies. Thousands upon thousands of frenzied supporters are ready to go to war for a man because he gives voice to their anger and frustration.
But is anyone outside of the melee truly listening? The befuddled Republican establishment scrabbles to redirect that anger toward Obama, Hillary and the Liberals. The shocked Democrats do their best to marginalize and dismiss the movement with all-encompassing words like “hate speech”, “bigotry”, “racism”, and placing them in a “basket of deplorables.” The shunned and lambasted media fight back by fact-checking and making futile attempts to chip away at his integrity and business dealings — as if his personal character make his words less true to his followers. Again I ask, is anyone truly listening?
One thing I know as a mediator is that no one who feels listened to needs to raise their voice. And no one bothers to raise their voice if they are not passionate about their words. It is clear from the television set that Trump’s followers exemplify BOTH these truths. What we also know about the human brain is that when we feel threatened, our cognitive thought process shuts down and impairs our ability to fully listen. Donald Trump’s words are undeniably offensive to many people. In his proven calculation, unscripted, raw, offensive language is guaranteed to be heard and repeated. The greater the perceived impact, the greater the cheers at the rallies and retweets on his Twitter account. Ironically, the opposite is occurring with respect to others’ ability to truly hear him or his followers. This latter fact may not be Trump’s concern, but it definitely should be ours.
One thing we would hear in the anger (if we could listen) would be fear. REAL FEAR. Fear that we are living in a changing world where our neighbors, employers and leaders no longer look or speak like we do. There is, after all, a black president of the United States and a woman running to succeed him; both would have been inconceivable a generation ago. There are people permanently losing their jobs to foreigners who speak, eat, and act differently than we do, and technology is replacing us through automation. These fears are not unfounded or immaterial — they are real, they are concrete, and they are happening now.
If we had the ability to acknowledge this fear, what we might be able to see beneath that fear is care — care for our families, our way of life, our values, our religious beliefs, our identity. It is true, we will not be able to raise our children in the same world, in the same way or in the same environment in which our parents raised us. That fact is terrifying to some people. Moreover, if all I know is how to build cars, how will I feed my family and maintain my sense of purpose when I can be replaced by someone able to work for less or a robot that is twice as efficient? Where can I find hope if I can’t even provide for my family?
How would you respond if instead of hate, anger or even fear, you heard care in their words?
Yes, it can be said that Trump’s words are bigoted, hateful and racist. But why those labels are not helpful — and even naively dangerous — is because they let us off the hook from asking the more important question: what lies behind them? If we label someone a bigot, it gives us a pass from having to ask the deeper, more dangerous questions of how they got there and what is fueling their passion. More importantly and more conveniently, it enables us to excuse ourselves from trying to relate to them. Ironically, we become guilty of the same accusation of exclusion when we make Trump supporters “The Others.” To look at someone who is angry and slinging hurtful, shallow language, and then to take a look at ourselves and recognize our own fears is a risky and challenging proposal. But it is perhaps the only productive solution to start healing the divide that this election season has brought to light in our country and around the word.
We cannot solve a problem if we are unwilling or unable to talk about in a public forum. Pretending that there isn’t a problem isn’t a solution. So yes, thank God for Donald Trump. Thank him for having the unique ability, bravado and fortitude to be the mouth piece for millions of Americans who are living in fear of losing their identity and way of life. I am not advocating that you must like him or his politics, but can we set aside our hurt and outrage long enough to listen with compassion, empathy and an open heart?
I admit empathy does not feel like a trustworthy weapon against hateful slurs, ignorant sounding rants and death threats. Indeed, the path to healing our nation will not be linear, nor will it come quickly. Peace, however, starts in our own hearts and overflows incrementally into our local community before it can happen nationally. If enough of us have the courage to ask authentic questions in the face of anger along with the compassion to truly hear the answer, we might just have a chance.
“Us and them. And after all we’re only ordinary men.
Me and you. God only knows it’s not what we would choose to do.
With, without. And who’ll deny that’s what the fighting’s all about.” Pink Floyd
Historically our civilization has evolved primarily as successful hunters and gatherers. This evolution has been largely shaped by our environment, which gives us new resources and technology to continue our journey. But make no mistake about it, we are and will always be hunters and gatherers. It is embedded in our DNA. In this role our instincts require us to do what prior generations did which is to take as much of the resources available that we can get at any given time because they might not be available in the future. This explains a lot about what has happened to cases that jump into early mediation without analyzing the readiness or actual value of a case. This piece will address those issues.
The current thinking is that a lawsuit gets filed and the court encourages the parties to jump into mediated negotiations, whether or not discovery has taken place or legal issues have been sorted out through law and motion. This is contrary to our hunter and gatherer instinct and has contributed to some awkwardness on the part of trial lawyers engaged in early settlement discussions. While early negotiation does work in some instances and has been embraced institutionally in the past, it has led to a lethargic approach by some litigators to settlement. By this I mean that some folks simply show up and hope that their adversary comprehends the real value of their case without a proper exchange of data critical to an evaluation. This lethargy is due to what some commentators have described as the failure to consider the “intermediate steps between filing a case and mediating” that are critical to a successful mediated negotiation.
The Conflict Continuum
It is helpful to consider a dispute as a continuum of conflict where on one end is the “dispute” and the other end is “resolution”. In the middle are a number of signposts where the parties have real and substantive moments to reach closure.
On the right end of the continuum is a jury trial, which is the most effective and elegant approach developed by our judicial system. It has succeeded for centuries and is the cornerstone for everything else that flows from the system. The real challenge with the jury trial is that it is only available for less than 3% of all cases. That means the civil justice system had to create other methods to deal with the 97% of cases that are in need of resolution.
On the left end of the continuum is self-help. While it is not encouraged in the face of breaking the law, it is a common form of dispute resolution where parties take matters into their own hands. Early hunters and gatherers used this approach instinctively until it became illegal in most civilized countries. In the U.S. legal system we see it used in zero sum financial matters such as wage and hour class action cases where employers settle directly with their workforce (Chindarah v. Pick Up Stix, (2009)171 Cal App 4th 796) before the other side is aware of their action. It is also used in employment matters where offers of reemployment are offered, and in family matters particularly where children are involved.
In between the two ends of the continuum lie the bulk of processes that are primarily designed to get cases settled. Following “self-help,” the parties absolutely need these two intermediate steps before engaging in Mediation:
1. Self Help – Explained above.
2. Communication – This is the part where lawyers are supposed to talk to the other side to gauge their desire for resolution. It might be a friendly exchange of data, a simple question about how their client feels about early resolution, or a firm “this case is going all the way.” In any event, some type of communication is warranted before taking the bait and going to mediation where bad news is expensive.
3. Negotiation – More often than not I am told by parties to mediation that there is no demand to settle and they have no sense of where the other party is coming from. Instead of pre-qualifying the case in advance, they use their best instincts and knowledge of the other lawyer’s leanings to surmise expectations. When they hear the first demand at the mediation that same hunter and gatherer instinct kicks in and they threaten to leave. We begin flailing to keep parties at the negotiation table. To say it is exhausting is an understatement.
4. Mediation – Trials are vetted way in advance because parties have exchanged substantial information about their case. The jury is now ready to hear the entire story and can make an informed decision on the outcome. Mediation, particularly early mediation, is often not vetted in this manner which is why it sometimes fails. That is not say that early mediation is not useful for settling cases. It’s just that our hunter and gatherer instinct forces us to ask for value that might not be present, or have more optimism in our position than we should if our case was fully vetted. How to properly appraise a case for mediation is similar to how you might vet a case for trial, but you have compressed all the time and expense into smaller arena.
5. Jury Trial (or Arbitration) – Explained above.
Here is a simple checklist when vetting a case for mediation that can be considered as a starting point that I suspect will be supplemented for by your firm.
Intermediate Step Checklist
a. Insurance – No matter the type of case, knowing the identity of the insurer, their policy limits, the deductible, whether there is a reservation of rights and their position on coverage is a basic first step. This applies across the board and could include class actions, business disputes and routine tort cases. Gathering intelligence about the insurer and it’s propensity to resolve cases early, who they use as counsel, whether they will attend a settlement conference in person or handle via phone are all critical considerations.
b. Ability to pay – In the employment litigation arena, particularly wage and hour class actions, having a great case with large penalties is not enough to save the day. Understanding the nature of the employer and their business, and whether they can respond to “reasonable” settlement proposal is just as important.
c. Company on the market to be sold – How often do we read in the Business section of the newspaper that certain companies are merging or being bought by other companies. This information is readily available on the internet, particularly when dealing with public companies. This information creates a dynamic that is sometimes useful for settlement, depending on the timing of the negotiation.
d. Claims administrator needs to move files – Surprisingly, many lines of disputes involve insurers have plenty of funds in reserve but are literally backed up in their claims department with files. These files are waiting to be settled but we often don’t know it. If a defense lawyer reaches out on a case, it might not be a bad idea to find out if the carrier is in a “run off” type business or simply needs to move files.
e. Mood of the marketplace – With the exchange of electronic information via listserv and other electronic bulletin boards, lawyers are able to gauge which lines of disputes are settling and the range of value. That being the case, consider where your case stands in the marketplace. It might be that your case is such a unique outlier that you would not want to negotiate early because the value will only come after certain damage depositions are taken. On the other hand, you might need to move the case quickly because of the many minefields it has such that you are more than willing to settle for market value or less.
f. Current state of legal defense – This is really a question of uncertainty in the law. In wage and hour class action litigation there are usually a number of areas where an employer simply can’t rely on a clear rule or approach in paying wages. The uncertainty opens the door to settlement opportunities, particularly where the plaintiff is reasonable. It does not give rise to settlement opportunities for hunters and gathers who want to eat all the vegetables they find in the garden.
g. Opposing counsel – Reasonable counsel usually means reasonable clients. Follow the cues when counsel opens the door to discussions about the case. It is hardly a sign of weakness to want to discuss settlement.
h. Case facts – Some facts speak for themselves and others require a lot of explanation. Most cases fall into the latter category. If your case speaks for itself, offer up transparency in providing whatever information your opposition requires to fully evaluate the merits.
i. Information needed to evaluate – Put yourself in the shoes of your opponent. What would they need to advise their client about the case? Imagine they are drafting a formal report that goes through the strengths and weaknesses, and provides a financial quantification of your dispute. It would certainly be in your best interest to arm your adversary with whatever information might lead to a fair evaluation that opens the door to a reasonable negotiation. In other words, tee it up for the other side so that they can be your champion with their client.
j. Future cases with adversary – Are you a frequent flyer with this defendant or law firm? If so, make sure they know that the case at hand is either an outlier or falls within the scope of what they are accustomed to getting from your firm. Failure to do so will result in an evaluation that is mediocre.
k. Symbols matter – The Confederate flag became a symbol of hate in our country. It stood in several government buildings in the south until people used “self-help” to eliminate the symbol. Your confederate flag consists of nasty emails, defamatory statements about lawyers and their clients on electronic bulletin boards and so on. These symbols inevitably get into the hands of your adversary so be forewarned. Communicating in a respectful and principled manner in writing is the only way to properly vet a case for mediation.
Terms of Engagement
After considering the above checklist (which will no doubt be supplemented to adapt to your case), it’s now time to negotiate the terms of engagement to mediate. Here are a few quick things to remember:
a. Scheduling – Mediators who understand how to close deals are in high demand, meaning that getting a last minute case onto their calendar is challenging. Consider reserving a couple of dates which select mediators a year in advance with an understanding that those dates will be returned to the mediator with ample notice if not used. Take advantage of the administrator for the mediator who usually knows how to herd cats;
b. Who will attend the mediation – When insurance is involved, particularly carriers from geographic distances outside your jurisdiction, do you need them at the table or will telephonic availability be acceptable? In a commercial setting, is the Chief Executive Officer attending or is s/he sending a subordinate? Discuss the pros and cons with your adversary and make it work for them.
c. Where will this mediation occur? – Generally speaking, a mediator is more effective in his or her neutral space. Conducting the session in a law office does work but doesn’t utilize all the skills a mediator needs develop a proper settlement dynamic.
d. Costs – In most cases, the cost of a successful mediation shared by all parties is miniscule compared to the value obtained in settlement. Don’t be penny wise and pound foolish. You get what you pay for, no matter the size of the dispute.
e. Pre-Mediation Conference – In any case that is sizable, schedule a short call with the mediator in advance of the mediation to highlight the areas that might be an impediment.
f. Agreements – Consider exchanging either a formal Settlement Agreement and Release or Memorandum of Understanding before the session. While there are some terms that are subject to negotiation and can be left out, at least the key terms can be handled without wasting precious time at the conclusion of the mediation.
We are hunters and gatherers. A form of entrapment is built into the civil justice system since it cannot handle our desire to eat all the cherries that are picked in the forest. As a result, we have asked mediators and others to assist in our efforts. Mediators are often misled and used as pawn when they are put into a case where the parties haven’t considered the intermediate steps outlined above. This has led to wasted resources and time, which is contrary to why mediation was placed into the system in the first place.
Pacifism, including peace theories that spring from philosophies of religion and ethics, can and should inform the way that mediators approach parties in conflict. One hazard in anchoring ourselves to the factual minutiae of conflict is to neglect the context of higher level desires for peace. We must always work to keep a holistic perspective on the parties we are trying to help, seeing them as psychological, social and spiritual brothers and sisters. Any aspect of our common humanity can serve as independent bases for wanting to make peace, over and above the practical necessity of resolving a specific conflict per se. Peace is psychologically enjoyable. Peace is socially freeing. Peace is spiritually life-giving.
Everyone desires peace for a variety of reasons and these reasons come up in mediation. Parties may be thinking first about what they want from the negotiation in terms of dollars and cents or a boundary line drawn in their favor, but they are usually also looking forward to having the process itself over and done with. It is easy enough to remind parties that one of the greatest benefits of settling a dispute will be peace itself; an end to conflict and a chance to heal. Though we may not think in terms of being “pacifists” always, there is a pacifism inherent in being a party to mediation, with the exception of the few people who show up to mediation for some untoward gamesmanship. The vast majority of voluntarily mediated disputes are convened by parties who want to make peace, and who are therefore pacifists in at least the broadest sense.
Of course, there are some very strict philosophical definitions of pacifism, which might require that peace not be “contingent,” of must be “universal” before we could call someone a true theoretical pacifist, but if we define pacifism more broadly as something that echoes out of history, and as it has been historically instantiated by exemplary pacifists, we could conclude that anyone who places a high value on peace could be called a pacifist. A pacifist could be someone influenced by Erasmus’ Praise of Folly or the philanthropy of William Penn.
If we define a pacifist as someone who simply places a high value on peace most people should answer that they are amenable to identification with the concept, and historically there have been times when pacifism was viewed this way, as a broadly inclusive term. If we go further still and define pacifism by looking to the most famous proponents of the idea, we find that there are few among us that would not be very happy indeed to be counted among famous pacifists. Who would not want to be counted with Martin Luther King Jr., standing up to racism, committed to an active resistance to Jim Crow laws; his bravery and success require us to see pacifists as no less than heroic. But we need not be a giant of pacifism to make a little peace. On a much smaller scale, through dialogue and negotiation, participants in mediation have this opportunity to work toward largescale harmony incrementally; to do as Otto Frank advised in his immortal words, “insofar as it is possible” in our own circumstances “to work for unity and peace.”
On the other hand, pacifists have sometimes been criticized by the warrior spirits among us as naïve and cowardly. Pacifists respond to this criticism by noting the salutary benefits of cultivating peace, the wastefulness of conflict and the bravery it takes to work for peace. But oftentimes it is the criticism of pacifists as unrealistic wishful thinkers that has stuck in the modern caricature. Rather than the heroic and nuanced version of who a pacifist is, from Ghandi the Father of India, to Martin Luther King Jr., and to our contemporaries like Rachel MacNair, we too often see pacifists through the lens of straw man scenarios, like the interchange between Neville Chamberlain and Adolph Hitler, where the pacifist comes out with egg on their face in our 20/20 hindsight. Pacifists’ Quixotic undertakings seem doomed to failure in this light, even to invite war for which the pacifist is unprepared, as Teddy Roosevelt put it.
Some modern historians have concluded the opposite though. Even Neville Chamberlain can be seen as a nuanced historical character. Tongue-in-cheek, we might rehabilitate Lord Chamberlain for proving, if nothing else, that England had really tried everything before going to war. England’s attempts at appeasement gave World War II a moral sanction unique in modern history.
In hindsight it is not inaccurate to remember World War II as being justified by the predominating horror of the holocaust, which the world later discovered made Nazi Germany an extraordinary case of human rights violations. But some of us are tempted to misremember the holocaust as the most important justification for entering into World War II, which it may be that too in hindsight, but those atrocities had not begun to reach their worst, and would not be widely known and accepted until after the war was over. It was instead the aggressiveness of Germany and the Axis Powers that propelled the Allied response after the invasion of Poland in 1939. Hitler’s Germany being an aggressor nation against peaceful nations was the flashpoint, and Chamberlain’s desire for “peace in our time,” though ultimately perhaps naïve, was borne out of the pacifism that made World War II a cause worth fighting under just war theory. It made Chamberlain look a fool in some eyes, but Hitler a ruthless bully. This makes it difficult to identify with Neville Chamberlain’s arguably naïve pacifism, where that term is associated with being weak or a Judas goat qua appeasement. So the term “pacifist” remains almost a pejorative in some circles.
But there are many great reasons to want to identify with the historical pacifists. Figures like Martin Luther King Jr., Dietrich Bonhoeffer, Ghandi and the Quakers (who ran the underground railroad,) were all deeply committed pacifists whose legacies are among the most important in modern human history. Instead of thinking of pacifism in terms of its historical blunders, we should recall its greatest successes.
Perhaps not in so many words, mediators raise the question of whether we are dealing with each other as pacifists at the outset of most mediations. We remind parties of their pacifism as we say something in our opening remarks to the effect that “we are all here because we want such and such a problem to be resolved amicably.” We want to make peace. Some mediators go so far as to expressly project pacifism as a part of their persona, naming their practice “Peaceful Mediation Service” or something to that effect.
Three Pacifists Walk into a Mediation
Taking the view that disputing parties are pacifists who place a value on peace can help us to appeal to the peaceable nature of those we encounter in conflict situations. Initiating discussion about what value each party places on peace invites parties to rediscover their own preference for peace and what that means for their dispute.
Alongside any practical or legal considerations that parties are contemplating are ethical and spiritual logic driving their desires for peace. Many of us have studied “ultimate questions” somewhere in our liberal arts education, learning about the ethical impact of summum bonum conclusions. As we see these conclusions held by parties to a dispute, they can be appealed to in order to foster discussion of the reasons why participants may have come to a mediation to make peace with each other. As the contemporary Thomist philosopher Peter Kreeft puts it, “the question of the summum bonum, the greatest good, final end, meaning and purpose of life . . . is crucially important[,]” and once someone answers the question of what the meaning and purpose of life is, “their answer colors and determines the rest of their practical philosophy.” Many parties to mediation will have reasons for peacemaking that spring from summum bonum ideas.
If we are dealing with theologically driven parties, the general rule among all theistic religions is that relating to God rightly is the greatest of all goods. Since many instances in scripture reveal God as desiring peace, obedience to God’s call to pacifism can be a powerful motivator. When dealing with non-theistic parties, appeal may be made to humanitarian consequences of peacemaking. The desire to turn the other cheek and settle with their enemies is a pacifist drive that religious and non-religious persons carry with them. All people have a code of ethics informing their sense of right and wrong, and understanding what spiritual and ethical beliefs have been brought into the mediation room can help peace to flourish in unexpected ways.
Invoking Pacifism in Mediation
There are four steps I use to remind people that they are pacifists, respecting that my reasons may be different than theirs for seeking peace and that we may place different values or characterizations of what peace means in the end. The steps are 1) first to note that all participants in a mediation have the common goal of resolving disputes, which, like it or not, makes all parties to a mediation at least potentially peacemakers. Noting also that ultimate resolution is voluntary, but that mediations are never convened without peacemaking as at least a hoped for end. 2) I share my own identity as a pacifist mediator without going into detail about why I am a pacifist. More important are the reasons that parties see peace as desirable than reasons why a mediator does, because party values inform the context of their specific dispute, which only they have the power to settle. When encountering pushback from participants who view pacifism in a negative light, I take a moment to acknowledge the problems of naïve pacifism, using Neville Chamberlain as an example, and noting that no one wants peace at all costs, but that mutually beneficial peace can often result from good faith negotiations. 3) This invites parties to share whether or not they see themselves ideally as peacemakers also and 4) invites parties to share any higher order reasons they have for desiring peace. Identifying with pacifism, parties can maintain whatever confidence they have in their positions, while negotiating from that point of strength, while also being willing to make concessions for the sake of peace that will not be seen as caving in.
Parties come to mediation to make peace. Rather than seeing mediators as the peacemaker in the room, it is useful to view pacifism as a universal human inclination. In our modern world especially, we should remember the wisdom of traditional pacifists.
See Metaphysics Research Lab, CSLI, Stanford University, Pacifism, Defining Pacifism para. 1, Stanford Encyclopedia of Philosophy (available at http://plato.stanford.edu/entries/pacifism/) (first published Jul. 6, 2006, last updated Aug. 14, 2014).
See for instance Arthur Deerin Call, The Doom of War 15-17 (The Am. Peace Socy., rev. ed., 1916)(noting intellectual pacifists from ancient to modern times)(available at NEED LINK to GOOGLE FREEBOOK).
See Ralph Albertson, Who Are Pacifists?, 103 World Affairs 155 (1940).
See The Anne Frank House, The Anne Frank Timeline, Otto Frank (available at http://www.annefrank.org
/en/Subsites/Timeline/Floating-pages/1961—Otto-Frank-corresponds/) (last accessed June 15, 2016).
 J. Hartt Walsh, Victory then Disaster?, 33 The Social Studies 195 (1942).
 See for instance Theodore Roosevelt, Newer Roosevelt Messages: Speeches, Letters and Magazine Articles Dealing with the War, Before and After, and Other Vital Topics Vol. III 960 (William Griffith ed., Current Literature Publg. Co. 1919).
See for instance Erica Chenoweth and Maria J. Stephan, Why Civil Resistance Works: The Strategic Logic of Nonviolent Conflict (Columbia U. Press 2011).
 See John J. Michalczyk, Filming the End of the Holocaust: Allied Documentaries, Nuremberg and the Liberation of the Concentration Camps 54,55 (Bloomsbury Academic 2014).
 Gerhard L. Weinberg, A World at Arms: A Global History of World War II 64 (Cambridge U. Press 1994).
 Thomas Aquinas, A Shorter Summa 101 (Peter Kreeft ed., Ignatius Press 1993)
Recently, I came across a report from the Harvard Law School Program on Negotiation entitled “Salary Negotiations”. (HLS_PON_FR_SalaryNeg_V03_031416_wf ) While it focuses on negotiating the best salary possible, some of its points are equally applicable to negotiations in general.
In one of the articles, the authors make three important points: “(1) mispredicting what we will truly value in life; (2) holding ourselves back in job negotiations; and (3) failing to recognize our relative bargaining position.” (Id. at 5.)
Many times parties may be in the middle of a dispute or litigation and have lost sight of the forest for the trees. They have forgotten why they started down this road, and what is important to them. The authors suggest that a party think long and hard about what it is she truly values and what she wants out of the negotiation. To do so, the authors suggest creating a scoring system. Write down all of the things or issues that are important and then put a score (e.g., 1 to 10 with 10 being the most important!) by each of them. This will help a party determine more accurately what is at stake and what is most valued. Perhaps, it is avoiding trial. Or, obtaining a set sum of money; or “saving face” or clearing your name or reputation, et cetera. While most litigation or disputes start based on “principle”, rarely do they end that way. As the dispute proceeds, the issues we value the most will change and thus the scoring will change. So, in any long term dispute such as a lawsuit, it is important to conduct such an assessment periodically. This is the only way that a party will truly know which goal is the most important and why, and not get lost in the trees. (Id. at 5-6.)
The second point is to get out of our own way. Sometimes, we are our own worst enemy. We do this by focusing on our weaknesses and conceding issues before we even begin to negotiate. The little voice in our head tells us not to pursue it even though we do not really know what the other party’s response will be. We give up ground before even starting. While we know that a certain fact may exist and be a “weakness”, we forget that the other party does not necessarily know it as well. We assume the other party knows it, which is an assumption that we should not make. Rather, we should act on the premise that the other party is NOT aware of it. (Id. at 7-8.) (Example: we know that a certain critical witness is no longer available to testify. In negotiating, we should NOT assume that the other party is aware of this “weakness” in our case.)
Or, we fail to see or pursue opportunities to negotiate and resolve a matter. (Id.) The prime example of this is mediation. Many believe that it is a sign of “weakness” to suggest mediation to the other side. Wrong! Litigation is time consuming, expensive, inefficient and emotionally exhausting. Moreover, a trial typically does not provide the catharsis that people are seeking. It is much more “rational” to end the dispute as quickly as possible and to move on with life. So, to suggest “mediation” is simply a recognition that everyone has better things to do with their lives. Why spend years on a dispute when it can have resolved in a matter of hours?
Closely related to not allowing our own internal dialogue to defeat us is that we should recognize that we do have bargaining power relative to the other party. Each party should negotiate forcefully, using information gathered in preparation for the negotiation. But, at the same time, we should prioritize our demands. Using the scoring system mentioned above, we should focus on the two or three issues most important to us and push for those in the negotiation. (Id. at 8-10.)
In close connection to this is the strategy to be used. Which strategy is used plays an important role in the outcome. (Id. at 13-14.) Should it be a competing (i.e. zero sum game) strategy? A collaborative one? Or, one that is compromising and accommodating?
While a competing strategy may provide better results in the end, the authors note that “collaborators were more satisfied than competitive bargainers with the negotiation process.”(Id. at 13.) And, as one might suspect, the use of a compromising and/or accommodating strategy did not yield satisfactory results. (Id.) Parties using such strategies were not satisfied with the results of their negotiations.
So, don’t get lost in your dispute. Do a periodic soul searching of what is important to you and then use mediation and a good strategy to get there. And, never let the little voice within you assume and thus concede anything before you even start to negotiate.
From Maria Simpson’s Two Minute Leadership Training
Sean O’Callaghan, former member of the IRA, spoke on the concept of radicalization at the 6th Annual International Cyber Conference on Dispute Resolution, hosted by CSU Dominguez Hills, and his comments on the process of radicalization seem especially appropriate after the tragedy in Orlando. As a former member of the IRA, and one who admits to violence, he has clearer insights into this concept than a lot of commentators and psychologists who have not gone through this process and, more importantly, rejected it. His comments, made after the violence in France, are equally applicable to Orlando.
O’Callaghan commented that every ideology has its own extremists, adherents to the ideology who do not compromise. “Fanaticism is part of the human condition,” he said. Fanatics exist within all groups and do not represent everyone from a country or religion or political party, but they get most of the attention, often by violent means.
“The people we have come to call radicals or fanatics don’t think they’re radicals or even different,” said O’Callaghan. They are proud of their commitment to their ideology and think they are doing the right thing. In a twisted logic, they explain their willingness to risk their own lives as caring more about you than about themselves; the violence is a way to save your from evil.
“We live our lives through a series of small negotiations,” said O’Callaghan, but zealots “do not engage, they do not negotiate.” They look for perfection and anything that spoils it, including the imperfect “you,” must be eliminated to reach the ideal state as only they define it. “I’m capable of murder and love, sometimes in the same heartbeat,” he admitted.
Experts talk about how the sense of isolation can drive fanaticism. Radicals suffer from a “poverty of aspiration,” and will cling to anything that offers self-esteem such as being heralded as a martyr. One psychiatrist explained that sometimes people with murderous rage need to legitimize it, so they identify with an extremist ideology and use it as an excuse.
O’Callaghan does not hold out much hope for peace processes as they are generally understood because they attempt to deal with global problems while ignoring the local problem and rhythm of everyday life. Restorative justice processes, he thinks, can bring out “unpalatable truths” that make peace more difficult to achieve. And what works in one place will likely not work in another because the underlying issues and cultures are different. The local population won’t believe in the process, doesn’t believe they’ll get the truth, and can’t really forgive their neighbors. “Politicians arrive at a solution,” he said, “but we go on hating each other.”
Instead, O’Callaghan advocates peace processes that are simple, defined, and deal with the current reality rather than getting “entangled with the past.”Fanatics, he said, decide to move on. They get worn down and accept the current reality. (See my column of April 19 for additional comments.) Fanatics may not forgive or forget, but they get on with a new life.
To get radicals to move on, then, radicals need a good reason that replaces the lack of aspiration, the sense of isolation, the sense that martyrdom is the only source of self-esteem and that perfection is not necessarily the criterion for ending another person’s life.
The answer may be with concepts called “therapeutic jurisprudence” and “positive criminology” that were also discussed at the cyber conference.
Therapeutic jurisprudence focuses on the legal process and suggests incorporating elements of mediation such as allowing the defendant to tell his or her story, listening respectfully, and bringing in family members to develop a relapse prevention plan. The plan focuses on the defendant’s humanity rather than criminality.
Positive criminology focuses on addressing the sense of social isolation that drives fanatics to find self-esteem in fanaticism. It requires that the social systems that exclude the fanatic change to accept the fanatic on some level so that the need for affiliation with a radical group is reduced. This process focuses on separating what the person did in the past from his or her basic humanity and connecting to society on that level. Processes focus on providing positive experiences that demonstrate that there are rewards outside of fanaticism, and working on social integration.
These same ideas were suggested after the tragedies in France: find a way to include people in society so they have no emotional or psychological need to find another, deadly route to self esteem. Reciprocal violence and harsh penalties are not the answer, but as O’Callaghan said, the solutions are local, not global, and they have to address the current reality, not past issues. He also said we might have to fight for democracy if our current approaches continue to fail.
O’Callaghan was a wonderful and insightful speaker. I truly wish his comments hadn’t been so pertinent and that I had never had this opportunity to write about their relevance.
Leonardo di ser Piero da Davinci, more commonly known as Davinci was not only one of the greatest painters of all time. He was a brilliant philosopher, mathematician, sculptor, architect, musician, scientist, engineer, geologist, astronomer, botanist, writer, historian, poet, cartographer, and inventor. Davinci was the prime exemplar of the “Renaissance Man” or “Universal Genius”.
He was a man with remarkable talents who displayed infinite grace in everything that he did and who cultivated his genius so brilliantly that all problems he studied he solved with ease. What was his secret?
Among the multiple qualities that make Davinci’s work unique and extraordinary were his unquenchable curiosity, his feverishly inventive imagination, and the innovative techniques he used to depict everything he learned from his continual and detailed observations of the world. Davinci performed countless investigations into not only anatomy but also the way in which humans register emotion in expression and gesture. For instance, in his most famous painted work, the Mona Lisa or “la Gioconda”, Davinci skillfully depicts an elusive smiling woman. The fame of this portrait, arguably the most famous painting in the world, rests not only on the perfect symmetry and the sheer equilibrium of the work but on how Davinci was able to adopt his observations and transformed them into masterful representations.
By the same token, a Master Mediator is a multitalented and forward thinking person. She artfully leads, coaches, and communicates. He is always alert, curious, and pays close attention to every surrounding detail. She reads facial expressions, gestures, cues and unspoken words. He learns from his observations to properly adapt to the circumstances. She is prepared for the unexpected, is adaptable and open-minded. He understands that there is no single right way to mediate. She must be flexible and aware that her performance needs to continuously evolve depending upon the type of case, the people’s stories, the needs, and the personalities involved. The dynamics of the process will determine if he needs, in a given moment, to be more facilitative, transformative or evaluative, or perhaps a combination of them all. She skillfully keeps the conversation moving forward. He must be creative and thinking so far “outside of the box” that he doesn’t even see a box.
After all, there is a whole art in mediating and helping people to resolve their disagreements with respect and integrity.