The diminishing shadow of the courthouse

The state budget crisis promises to deliver devilish delays in the civil justice system. Will this render private mediation less effective, or could it present opportunities for more productive mediation?

Jeffrey Krivis
2011 September

The economic challenges that have swept over society have finally hit the civil justice system. Courthouses throughout California have seen huge cutbacks. San Francisco has all but shut down civil jury trials. No one thought this was going to happen to such a venerable institution as the trial-by-jury system, but in these difficult times, nothing is sacred.

Reduced budgets translate into cases taking longer to wend through the system, frustrated clients and a push towards a private justice system.

Back to the Future

For me, this is like the movie, Back to the Future. When I began practicing law in 1980, it was common in California for civil cases to take five years to get through the court system. In fact, there are statutes on the books which mandate that civil cases be tried within that time frame. If not, the case would get dismissed. This culture led to inertia on the part of both the plaintiff and defense bars. Though the plaintiff bar preferred an early resolution of a case, the net result of pushing for early resolution was a discounted value by the defense. The defense, knowing that there was no pressure from the courthouse to move the case quickly, was more reactive than proactive. I know this firsthand: My first job as a young attorney was with a defense firm.

In response to the lethargic nature of case management in the early 1980s, the courts decided that alternatives to the civil justice system would be helpful in moving cases forward. The first alternative suggested and implemented was court-ordered, non-binding arbitration. This was a system in which members of the bar would volunteer as neutrals and serve on cases ordered by the court. Sometimes the court went a step further and paid the neutrals $150 per case, and a cottage industry was born.

In reality, parties would prepare for the court-ordered arbitration as if it were the final moment in the development of the case; presenting a strong position to the arbitrator with the hope of winning. The arbitrator would issue an award which was often accepted, resulting in a closed file for the courts. If the award was rejected, either party could file a request for trial de novo and have a regular jury trial – within five years of the filing of the complaint.

Over the years, parties started to marginalize the court-ordered arbitration process. In other words, less effort was made in preparing and putting on a serious case, mainly because it was non-binding. While this might have had something to do with economic factors, my sense is that we started taking the process for granted and it became less effective. Statistics on successful arbitrations plummeted and the courts began to phase the program out in favor of other measures. As a result, non-binding arbitration as a tool in our civil justice system is today a dinosaur.

“Fast Track”

As the effective use of non-binding arbitration diminished, the courts decided to try something new. This time they called it “Fast Track.” This process put pressure on the judges to force a case through the system within 12 months. Judges soon became glorified clerks, administering justice based on stopwatches instead of fairness. Judges were graded on how fast they could administer a case. Low grades resulted in less appealing judicial assignments. Parties who would normally consider settlement ramifications before spending litigation dollars were compelled to take depositions and incur huge expenses in order to comply with tight time constraints. While plaintiffs were able to achieve early resolution, the pressure on litigators was immense. Fast Track continues today, but is being eroded by the budget crisis and exceptions for complex cases.

Court-ordered mediation

Partly due to the existence of Fast Track, and partly a result of a desire to have more control of their destiny, litigators embraced the idea of non-binding private mediation in the early 1990s. The trend began in Florida and Texas in the 1980s with legislation mandating that all civil actions go through a mediation process before trial. California endorsed the trend and mediation became yet another cottage industry.

The courts nominated volunteers to serve as mediators, and private judges and attorneys joined forces to create private mediation and arbitration centers throughout the state. Court-ordered mediation took off like gangbusters but became marginalized in the same way court-ordered arbitration had. Too many lawyers stopped preparing seriously for the process, too many cases were scheduled before they were mature and too many of the mediators were just not qualified to settle a litigated case. The statistics on successful resolution went down but the court still embraces the process today, probably because there are few alternatives.

Private mediation

Private mediation has done somewhat better, with many parties choosing a private system where they know and trust the mediator and can manage their dispute more efficiently without court intervention. Unfortunately, the effectiveness of private mediation has also become diluted by the number of unqualified mediators as well as by the lack of case preparation that has spilled over from court-ordered mediation.

The most important factor fueling the success of private mediation is the shadow of the courthouse hanging over each case. When there is pressure on the parties to go to trial, decision makers pay attention and good faith settlement negotiations take place. Without that pressure, private mediation could be doomed to become similar to an old cover of Field and Stream magazine entitled: “New Game Laws – The Allure of the Decoy.” Mediation without the courthouse shadow could be an alluring decoy to litigators – a distraction, but clearly not the prey for hunting.

The new sobering reality

In order to properly navigate your civil case through the new reality imposed by court budget cuts, litigators might consider some sobering concepts:

• First, we need reasonable access to the jury trial system to create a balance of power and maintain fundamental fairness in resolving disputes. Plaintiff and defense trade associations would be well served to lobby the legislature as a joint group. Failure of the civil justice system to work in a balanced way could disrupt many parts of society, reaching far beyond injured parties, insurers and counsel.

• Second, volume-style cases ranging from garden variety employment matters to automobile cases should consider agreeing to the “one day — one jury” approach. The parties stipulate to the foundation of most evidence and have an abbreviated trial. This is the latest attempt by the courts to administer justice efficiently but fairly and should be considered in these types of disputes.

• Third, marginal cases might not be accepted by plaintiff lawyers. As a result, people who would seek justice in a small dispute might not get it. This is the reality of a system that denies jury trials due to budget constraints.

Convening more meaningful mediation

The silver lining in this crisis is that lawyers will rethink how they approach the use of mediation. Instead of simply putting every case into mediation, hoping that it may settle as the shadow of the jury trial hangs low over their shoulders, parties will “convene” cases so that the time is well spent and the parties can actually obtain a settlement or, at minimum, a clear idea of what the financial opportunities are and how they can be achieved.

The concept of “convening” is well-known to the mediation community but less clear to litigators. When mediation first became institutionalized, the first thing that was done was to convene the parties to the table. This meant that parties actually had to express a desire and willingness to negotiate with their adversaries; we have taken that desire and willingness for granted for too many years.

“Convening” is more than simply a concept or word. It opens the door for advocates to explore ways of communicating with each other early in the case to size up a willingness to come to the table. It also allows for the use of mediators early on to help in “bringing parties to the table.” No party or mediator wants to engage in a mediation that is not intended to be productive. By convening the case, litigators can pre-qualify whether investing in a private mediation will be useful or not. Here are a few tips that might be considered in convening a litigated case:

• Organize an effort through the court system that initiates a request to determine if the parties think private mediation might be useful. This allows the parties to save face and not look vulnerable in reaching out to their adversary;

• Offer to negotiate, provided there are preliminary talks – with or without a mediator – to determine whether a full blown mediation would be worthwhile and that the timing is right;

• Offer to exchange mutual risk analysis with your adversary before agreeing to come to the table in order to determine how far apart you might be;

• Utilize the services of a private mediator to convene a case by calling each side and assessing their willingness to fully engage in meaningful settlement negotiations. Parties might be more willing to share their objectives to a mediator in a pre-mediation setting than to share them with you;

• If you have a decent rapport with opposing counsel, sit down for coffee and talk about in what direction their principal intends to take the case;

• Find out if there are legal issues that opposing counsel need adjudicated before serious settlement discussions can take place;

• Determine if there is any specific information needed by opposing counsel before negotiations can occur.

In short, “convening” allows each side to make an independent assessment of the impediments to settlement. By learning what those impediments are, you can then determine if the case should stay on the slow track toward trial or be placed on a “mediation fast track.” Don’t allow the budget crisis to turn your practice upside down. Look at this as an opportunity to refocus on better ways to engineer a case toward settlement instead of being on automatic pilot.

Jeffrey Krivis Jeffrey Krivis

Jeffrey Krivis began his mediation practice in 1989, when lawyer-mediators in Southern California were rare, and litigators had to look outside the state for experienced practitioners. Now, years later and having resolved thousands of disputes — including wage and hour and consumer class actions, entertainment, mass tort, employment, business, complex insurance, product liability and wrongful death matters — Krivis is recognized not only as a pioneer in the field, but also as one of the most respected neutrals in the state.

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