More Litigation About Mediation

One of the most interesting mediation articles I’ve read was called “Disputing Irony” by Prof. James Coben, 11 Harvard Neg. L. Rev. 43, 98 (2006). He and his team at Hamline Law School surveyed all the U.S. appellate court cases, state and federal, 1999-2003, that mentioned “mediation,” to see why cases that should have ended in mediation were still being litigated (the “disputing irony”). Almost half of these cases involved an attempt by one party to get out of the mediated agreement, where the question was enforceability. Another portion addressed concerns about confidentiality; in many cases, testimony regarding statements made in the mediation came into the trial court proceeding as evidence, without objection.

Professor Coben has continued to monitor litigation about mediation, and earlier this year he compared what he observed 2013-2017 to what he saw 1999-2003, when mediation was just catching on in U.S. courts. “Litigation About Mediation: A Case Study in Institutionalization,” 28 Dispute Resolution Magazine 18 (January 2022). The first obvious change is the increase in the number of cases; in 1999, they found 172 cases, but by 2017, it was 891. Twenty years ago, questions about enforceability comprised 47% of the cases; more recently, it had decreased to 39%. He found that the likelihood that a settlement will be enforced in the face of an alleged defense increased from 57% to 69% of the time. But, interestingly, standard contract defenses like fraud, mistake, and duress have declined, while procedural defenses have increased.

Concerns about confidentiality declined, suggesting to Prof. Coben that “confidentiality frameworks for mediation are working sufficiently and predictably for parties.”

Questions about fees, costs and sanctions all declined, while procedural questions like whether the court had jurisdiction increased.

Most notably for mediators, litigation about mediators continues to be virtually non-existent. Of the few cases asserting mediator misconduct, none has succeeded.

As his title implies, Prof. Coben sees all of this as a sign that mediation has become institutionalized as part of the ADR landscape.

Disclosure Could Become Mandatory

In response to a growing scandal, the state of California is considering mandatory disclosure of past relationships by mediators and arbitrators. The scandal involves a Los Angeles attorney named Tom Girardi who worked for years with “private judges” in administering mass tort cases while diverting funds to himself. An LA Times investigation suggests millions of dollars were misappropriated. The private judges were mostly retired judges working for JAMS. Because these cases are private and confidential, there is, as one commentator noted,  “little accountability for how decisions are made, how funds are distributed, and how much plaintiffs’ attorneys receive in fees.”

So a California legislator is raising the possibility of requiring that mediators and arbitrators disclose past relationships.

Mediation and arbitration are largely unregulated. That may change, as abuses are uncovered.

In Michigan, the State Bar’s ADR Section has proposed new, more detailed, Standards of Conduct regarding mediator disclosures. The more mediators and arbitrators voluntarily disclose about their relationships with others in the case, the less likely that legislation will be necessary.

Apologies from Tech Leaders This Week

The Wall Street Journal yesterday compiled apologies offered this week from leaders of several tech firms as they announced staffing cuts (“Tech Founders Apologize for Growing Too Fast”).

  • “I got this wrong and I take responsibility for that.” Mark Zuckerberg, founder of Facebook parent Meta Platforms, announcing that it would cut 11,000 workers.
  • “I grew the company size too quickly. I apologize for that.” Jack Dorsey, co-founder of Twitter, after its new owner announced a 50% staff cut.
  • “I take responsibility for choosing to grow our team faster. And now I also own the decision…resulting in this layoff.” Jeff Lawson, CEO of Twilio, announcing a cut of 11% of the company’s workforce.
  • “I’m sorry. That’s the biggest thing. I [screwed] up and should have done better.” Sam Bankman-Fried, founder of troubled crypto exchange FTX, detailing its swift decline. Mr. Bankman-Fried offered another apology as he resigned today.

These apologies meet the basic criteria: acknowledgement of wrongdoing – in this case, errors in judgment – coupled with personal responsibility. To their credit, the apology was followed by a period. If the speaker added more – as Mr. Zuckerberg did –, it sounded more like explanation than excuse, because he led with the apology, followed by a period.

It’s easier for corporations to issue statements in passive voice – “mistakes were made.” To their credit, these leaders spoke in first-person.

Hopefully the full text of each apology also includes an acknowledgement of the harm done – in this case, to employees, many of whom were hired just in the last two years. Ideally, an apology would also include a statement of how the offender intends to fix things, and to avoid similar mistakes in the future.

The British Prime Minister Apologizes

British Prime Minister Liz Truss took the opportunity yesterday to apologize for the fiscal decisions made during her brief but controversial tenure in office. Her plans announced last month to cut taxes roiled financial markets, prompting the firing of her Chancellor of the Exchequer Friday, and replacing him with a new head of treasury who announced major changes – the media calls them “U-turns” — to the government’s fiscal policy.

In an interview with the BBC, Ms. Truss said, “I recognize we have made mistakes. I’m sorry for those mistakes.”

So far, so good. Two key elements of a good apology are taking responsibility, as indicated by use of “I”, and using the word “sorry” appropriately.

But, perhaps a little too quickly, she tried to swing the attention from the past to the future:

“But I fixed the mistakes – I’ve appointed a new chancellor; we have restored economic stability and fiscal discipline…“  A good apology includes a plan to repair the damage done, but most Britons would probably not agree that everything is “fixed” yet. It might have been better had she said that she was trying to repair the damage done, acknowledging that it may take awhile for the “mistakes” to be “fixed.” She seems to imply that appointing a new chief treasurer has “fixed” everything, but it hasn’t.

Later in the interview, she added this:

“I do want to accept responsibility and say sorry for the mistakes that have been made… We went too far and too fast; I’ve acknowledged that. I’ve put in place a new chancellor …”

Here, she violates one of the cardinal rules of good apologies: Never use passive voice. “Mistakes that have been made” is deadly to a good apology. She softens it by coupling it with accepting responsibility and saying sorry. She also offers a bit of an explanation for what happened: “we went too far, too fast.” This could be seen as an honest assessment of how she made the “mistakes.” The line in an apology between “explanation” and “excuse” is a fine one, but this sounds to me more like explanation, and helps answer the question every apology recipient wants answered: do you know what you did wrong?

In a part of the interview not shown in this clip, the reporter asks her whether this has all been “humiliating.” Being a seasoned politican, she does not answer his question, but she does offer this:

“I do think it is the mark of an honest politician who does say ‘yes, I’ve made a mistake.’ I’ve addressed that mistake. And now we need to deliver for the people…”

Public apologies are difficult, especially when the full extent of the damage done is not yet known. Kudos to PM Truss for making the effort, resulting in a pretty good apology.

ADR Section Recommends More Mediator Disclosure

What should mediators disclose to parties who are considering appointing them as their mediator? Mediators are supposed to be neutral, so parties want to know about any connections a mediator may have with a party or attorney that might make them biased.

The Michigan Mediator Standards of Conduct provide guidance on this. They require mediators to disclose conflicts of interest and grounds of bias or partiality reasonably known to the mediator (Standard III.C). A conflict of interest is defined as “a dealing or relationship that could reasonably be viewed as creating an impression of possible bias or as raising a question about the impartiality or self-interest on the part of the mediator.” Standard III.A. (Michigan’s Standards of Conduct for Mediators are very similar to the Model Standards of Conduct for Mediators.)

In a 2019 case, Michigan’s Attorney Discipline Board (ADB) opined that requiring attorney-mediators to disclose any prior relationship with another attorney would be unworkable, and stated that “[w]ithout specific language describing what does and does not constitute a conflict of interest, the Standards of Conduct for Mediators does not adequately inform a mediator… as to what kind of prior relationship will subject the mediator to a charge of an unethical conflict of interest …..”

The ADR Section of the State Bar took this as a challenge, and appointed an ad hoc committee to review the standards on disclosure. I have had the privilege of serving on this committee, along with Mat Kobliska, Dale Ann Iverson, Mike Leib, Marty Weisman, Ed Pappas and Bob Wright, ably chaired by Lisa Taylor. The committee’s goal was to develop guidelines regarding mediator disclosures that would be more helpful to mediators, especially in providing the specificity that the ADB found was lacking.

The result is a proposal to amend the Standards of Conduct, by merging Standard II, Impartiality, and Standard III, Conflicts of Interest, into one new standard entitled, “Impartiality, Disclosure and Withdrawal.” The proposed standard does not change the essence of the current Standards, but it provides more specific guidance regarding disclosure.

As it studied how impartiality applies to mediators, the committee realized that the term “conflict of interest” doesn’t quite get at the problem. A mediator could well be partial without having a particular conflict of interest. So the committee proposes doing away with the term “conflict of interest” in the Standards. Instead, the proposed standard speaks of “dealing or relationship” and “impartiality or self-interest.”

For example:

Current Standard III.C. A mediator shall promptly disclose conflicts of interest, grounds of bias, and grounds of partiality reasonably known to the mediator.

Proposed (new II.D.) A mediator shall promptly disclose a dealing or relationship that could reasonably be viewed as raising a question about the mediator’s impartiality or self-interest.

The committee also discovered some guidance from the ABA, designed for judges, that it found quite helpful for mediators too. The ABA identified three main categories that neutrals should investigate as they consider what to disclose, with three sub-categories within the third main category:

  1. Financial
  2. Professional
  3.  Personal

a. Acquaintances

b. Friendships

c. Close personal relationships.

Within the “Personal” category are three levels of social relationships, in descending level of closeness: acquaintances, friendships, and close personal relationships. Generally, acquaintances – including social media links – do not need to be disclosed. On the other hand, close personal relationships most likely should be disclosed, and friendships lie somewhere in between. Our committee thought this would be especially helpful in addressing the problem confronting the ADB, where a divorce mediator did not tell Husband and his attorney that she made plans to visit Wife’s attorney at his condo in Florida during the pendency of the case. The ADB ruled that the mediator had done nothing unethical by failing to disclose her friendship with Wife’s attorney, but our committee thought otherwise, and believe this more specific guidance regarding friendships would make such disclosures more likely.

SCAO has final authority on Mediator Standards of Conduct, pursuant to Court Rule, and our ad hoc committee has submitted its proposal to SCAO. But, whether or not SCAO approves this version, take a look and see if these give you a better idea of what exactly you should and should not disclose.

Standards Of Conduct Proposal Submitted to SCAO


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