30 May 2009

Mediated Settlement Conferences in North Carolina

By J. Anderson Little

Ladies and gentlemen, I have been asked to introduce to you the Rules and Statutes governing Mediated Settlement Conferences in North Carolina. There are new developments in our civil procedure which may become common place in the near future and represent significant changes in the way we lawyers go about settling law suits.

I am confident that these changes are positive ones and believe that they will produce great efficiencies in your practice and foster a greater sense of satisfaction in your professional life. Before I highlight the rules for you, let me talk a moment about several concepts that underlie the conference program.

First, Mediated Settlement Conferences, and mediation in general, fall within that category of procedures we call Alternative Dispute Resolution, or ADR for short. These techniques include several old forms of dispute resolution such as arbitration and mediation and several newer forms such as sununary jury trials, mini trials and early neutral evaluation. They are now jumped together, in both their binding and nonbinding forms, under the banner of ADR.

The obvious question to be asked about these procedures is, of course, “To what are they alternatives? To what do they stand in opposition?”

The traditional answer to those questions has been that they are alternatives to the method of adjudication we find in our court system, namely the formal jury trial. AU of the ADR techniques, in both their binding and nonbinding forms, have been jumped together as techniques that are alternative to the trial process.

Recently, my thinking about that assumption has begun to change. It now seems appropriate to divide ADR into two classes: those procedures which are truly alternatives to the adjudication process which we know as trials, and those which are alternatives to the traditional settlement process that we participate in daily on an informal basis.

Alternative Dispute Resolution techniques that are truly alternatives to our trial system, are those that look very much like adjudicatory hearings, but which are dissimilar in one or more respects. Binding arbitration is an example. In binding arbitration the case is adjudicated by a person chosen by the parties, who usually has experience in the subject matter in dispute, who hears the case in an informal or abbreviated hearing, and who renders a decision which is binding among the parties. Other alternative adjudicatorv techniques include binding summary jury trials and binding mini trials.

There are other ADR techniques, however,. which are not alternatives to trial at all. They are settlement techniques and thus, they stand in opposition to, or in addition to our traditional approach to settlement. Those settlement techniques include non-binding arbitration, non-binding sununary jury trial and mini trials, early neutral evaluation, and mediation. The non-binding forms of arbitration, sununary jury trials, and mini trials also look like informal adjudicatorv hearings. They also result in an opinion by the decision maker, but one that is advisory in nature and serves as a basis for settlement discussion among the parties. Mediation does not look like a trial at all and in reality is a form of negotiation between the parties which are facilitated by a third party neutral. All of these techniques stand in opposition to settlement negotiations which are conducted largely by attorneys on behalf of their clients without the presence of formal structure.

Little attention has been paid to the settlement of civil cases in the literature of trial court administration. What we know about these settlement procedures is antidotal, but very strongly rooted in the psyche and practice of trial lawyers in North Carolina. The record for the success of traditional lawyer initiated, lawyer conducted settlement negotiations is, in some respects, quite good. Most people admit, even ADR advocates, that over ninety percent of civil cases are disposed of in one fashion or another prior to trial. It’s a pretty impressive record and probably accounts for the fact that our traditional settlement processes have received little critical attention.

Whv then, have alternatives to traditional settlement techniques arisen in recent years? Why, in fact, are they now being urged upon the Bar and courts by people both inside and outside the legal system? I think the answer to that question can be found by analyzing some of the detrimental aspects of settlement negotiations as they are engaged in on behalf of clients by lawyers.

In the first place, we know that it is very hard to get lawyers to talk to each other in advance of trial. One of the frequently heard complaints lawyers make is that they “cannot get the other side to the table.” In recent decades we have lost the informal structures that brought us together and promoted settlement discussions. In addition, some of us now take the position that we gain an economic advantage for our clients by avoiding settlement discussions.

Secondly, we know that traditional settlement discussions conducted by telephone, involving multiple conversations between lawyers and clients, result in a fragmented settlement process. Communication experts call this type of long distance discussion “serial communication.” It is often characterized by miscommunication and lost opportunities.

Thirdly, even when we lawyers are successful in discussing settlement face to face, we find it difficult to negotiate productively. Often we are limited by the positions our clients have taken and our own duty to advocate them. In short, we lawyers know how to advocate; now we need to learn how to negotiate.

People on a national scale, such as Roger Fisher and Bill Ury of the Harvard Negotiation Project, and on the local scene, such as Walker Blakely of the UNC Law School, have begun teaching the art and skill of negotiation. The usual method of negotiating is to advance our clients’ positions and advocate their claims. The new system teaches us to analyze the needs and interests that lie behind our clients’ positions, so that we can engage in a process of joint problem solving with our adversaries.

Underlying all these thoughts is the suspicion that the adversary process which we have come to depend upon to adequately adjudicate rights and remedies in our society, is responsible for impeding our settlement efforts. The adversary system simply may not be conducive to settlement efforts.

We have great faith in the adversary system. Our society has worked hard over the centuries to perfect it. We know it is the most successful system for eliminating bias on the part of decision makers. But, the adversary system is one which promotes and encourages advocacy about our clients’ positions and claims. it is not a system which encourages analysis of needs and interests and provides a model for joint problem solving.

Add the fact that our system is now beginning to feel the impact of large caseloads and increasingly complex cases, and we have as a result rising numbers of untried cases, increasing length of time to trial and decreasing confidence on the part of the public that its court system is effective for its citizens.

The detrimental impact of all these factors can be seen from several different perspectives. From the chent’s perspective, settlement discussions typically occur after considerable resources have been spent preparing for trial. As trial preparation advances and settlement is delayed, clients are left with great uncertainty and expensive disruption to their business and personal lives. We tend to underestimate that disruption. Former Judge Bob Rouse, who was a member of our Dispute Resolution Committee and instrumental in writing these rules, was frequently heard discussing his observations in this regard. Upon returning to practice after serving on the Superior Court Bench, he was shocked to discover how complex trial preparation had become and how adversely it impacted upon the lives of his clients, particularly his business and professional clients.

From the perspective of trial judges, senior judges in charge of administering civil cases and trial court administrators, there are costs associated with our current system of settlement. Across this state, stories can be told in every judicial district about weeks of trial time lost due to the continuance or settlement of cases on the eve of trial. There are many districts in this state which appear to have full dockets on trial week, but in reality have only two or three matters ready for disposition. We all know the stories of jurors sitting idle while attorneys confer in the halls of the courthouse, often for the first time, trying to settle their cases. Jurors sit idle, losing time from their work, and the court system as a whole loses time which could be spent hearing other cases.

And finally, from the perspective of the trial lawyer, there are many costs associated with our informal system of settlement. First, trial lawyers are caught in a dilemma. Should we prepare our case for trial or should we attempt settlement negotiations? And if we attempt settlement negotiations, how long and to what extent should we delay the preparation of our case for trial?

Lawyers’s sense of worth and satisfaction in their practice is at stake here. Simply put, our own sense of satisfaction diminishes as we are forced to prepare cases what we believe will settle on the eve of trial. One unfortunate consequence of this dilemma is serious under-preparation on the part of the attorney if he calculates wrongly that the case will be settled. Another result is frantic last minute trial preparation on weekends and evenings, time that could be put to other purposes either in one’s business or family life.

Secondly, we should note that most of us are concerned about the fees we charge our clients and try to be economical with our clients’ money. This may come as a shock to the public, but practicing lawyers know the truth of it. We don’t want to put our clients to unnecessary expense and trouble, and yet we are forced by traditional settlement procedures to do just that.

There are many deficiencies in our traditional settlement methods. They work to the detriment of clients, attorneys, and the public alike. And while they have held us all captive, we assume that things will always be the same and that there are no good alternatives to our present system.

The Mediated Settlement Conference Pilot Program is an attempt to test in this state a structured settlement process that has proven effective in other jurisdictions. It is based on several assumptions.

First, that structured settlement negotiations involving attorneys and their clients, conducted well in advance of trial, will provide a kind of certainty about trial preparation that will produce savings and satisfactions to us all.

Second, it is based on the assumption that someone other than the parties, attorneys and judges is necessary to facilitate the discussion of the parties: someone who is trained to search for the needs and interests of the parties underlying the dispute, and to engage the parties in joint problem solving.

Thirdly, it is based upon the belief that the cost of providing facilitation services should be borne by the parties rather than the state. This proposition is similar to principles underlying our rules of discovery and is not intended to, nor does it, acts as a barrier to the constitutional right to a jury trial.

Fourth, it is based upon the conviction that everyone who has authority to settle the case should participate in the settlement process, but that progress toward settlement cannot be mandated. Thus attorneys, parties, and insurance companies must appear at the conference. However, progress toward settlement will always be left to the skill of the mediator and the imagination and hard work of the parties.

Simply put, the Mediated Settlement Conference program provides a structured settlement event that will give the parties their best opportunity to resolve their case before serious trial preparation begins.

Your Bar Association, working through its Dispute Resolution Committee, initiated this program. We commend it to you. We hope and believe it will improve relationships between you and your clients, bring greater efficiencies to you in your practice, increase your satisfaction in the practice of law, increase your clients’ satisfaction with their court experience and make the administration of justice in North Carolina more efficient.

We trust that you will enter into this experiment with an understanding of its intent, as well as its procedures, and with a willingness to be open to the possibilities that your own skills in negotiation will be enhanced because of your participation in it.

Address given by Mr. Little at a NCBA CLE on Mediated Settlement Conferences in July, 1992