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In Mediation Attorney Fees Often Really Do Matter.

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In mediation, I talk about attorney’s fees all the time, whether or not there is an applicable contractual attorney’s fee provision available.  Either way, it makes a difference in settling a dispute that is, or could end up, in litigation.

The attorney’s fee provision, if there is one [and there usually is one in the cases I mediate], allows the prevailing party after trial or arbitration, to seek an award reimbursing attorney’s fees expended or incurred in pursuing the matter to an adjudicated decision.

At the outset of the mediation, that provision often emboldens uninformed parties either to seek their attorney’s fees as a part of the settlement or to move forward in the litigation and not settle, or both.

In most of the cases I see (i.e., where the amount in controversy is not substantially greater than the cost of litigating), the disputants will need to consider whether the investment in the dispute is worth it.

Four reasons why come to mind, each of which is worth discussing:

First, more than 90 percent of cases settle before trial, and so there IS NO prevailing party who can ask for an award attorney’s fees and costs. Parties need to know this, so that maybe they will realize in the long run that they likely will not recover the attorney’s fees they expend or incur.

Second, and consequently, in almost every settlement agreement I have seen in 40 years of practice (25 years as a litigator, 15 as a full-time mediator), one term of the settlement always is that “each party will bear his/her/its own attorney fees and costs.”

In other words, per the terms of most negotiated settlement agreements, most disputants will not recover the attorney’s fees and costs expended or to be expended in pursuit of the claim. And parties in dispute need to know this probable outcome as well before they decide what to do.

Third, even if a party were to prevail in litigation (if the matter does not settle), there is no guarantee that the court will award every dollar spent by the prevailing party on attorneys fees in the pursuit of the judgment. So, the parties may not get back what they spend, in whole or in part for various reasons, even if they win.

Finally, at the end of the trial, the loser often does not sit down to write out a check to the winner. One might have to pursue enforcement of the judgment, which has its own set of issues: (a) it costs a lot of money to pursue enforcement of the judgment; (b) it might be difficult to find available assets of the judgment debtor; or (c) the judgment debtor may not have available or sufficient assets, ever, to satisfy the judgment.

All of which is why people tend to forgo recovery of attorneys fees in settlement, ultimately, once they understand the issue, or they make adjustments in their offers and counteroffers in light of the attorney’s fees that would otherwise be incurred if they went forward with the dispute.

What if there is no contractual or other right to recover attorney’s fees in the dispute? Here, people have to think hard about what to do in settlement as well.

For the side seeking money, the more he or she spends on attorneys fees, the less the net recovery. For the side that may actually end up being liable, the more one spends, the more it costs ultimately.

So, this is why I always talk about attorney’s fees and the costs of litigating in every mediation I conduct.

In two recent cases, the attorney’s fees provision in their contracts, and the fees themselves, really mattered and consideration of this issue led to settlement in both cases.

Frankly, in both cases it was too expensive NOT to settle.

In one case, the parties had already expended in attorney’s fees an amount equal to or in excess of the amount in controversy, and there was a long way to go before trial. They realized they were in a hole that was getting deeper, as it were, and they needed to stop digging.

In another, the estimated cost of litigating so far exceeded the amount in controversy that it made no sense even to begin formal proceedings. Moreover, the possibility that, if the adjudicated decision went against them, they would be responsible to pay the other side’s attorney’s fees in addition to their own, was additional motivation for settlement.

So, in each case, common sense won out; they took the attorney’s fees issue to heart and they settled.

Which is why the consideration of attorney’s fees is such an important subject for mediation.

***

David I. Karp is a full time independent mediator of real estate and business disputes in Southern California. His website is at http://karpmediation.com .

*This post is marked “Advertisement” so as to comply with the State Bar’s Rules of Professional Conduct if applicable.

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Snorkeling at Mediation

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It’s not just what happens on the surface that’s important.

That’s why mediators look below.

It’s like snorkeling in the ocean.

Below is where the currents of emotion exist that pull people this way and that.

To understand the emotional current below is to know what drives the conflict.

Sometimes it is clear and we can see what’s going on.

Sometimes it’s so murky or deep we will never know.

We mediators can also learn, in the course of negotiation, whether the disputants are swimming with the current or against it.

The churning, swirling tide of the negotiation batters them back and forth as they make their offers and counteroffers while the undertow of the conflict pulls them deeper into the dispute … until they too can understand and manage their own emotionality.

Then they may know which way to go.

There can be danger below as well.

Have they themselves risked looking below at their own all-consuming feelings or reactions that encircle them like sharks waiting to gnaw at them?

As mediators, if we can perceive the undercurrents that pull at them, or the riptides that move them away, maybe we can help them to manage the turbulence of their thoughts and feelings and to reach for the clarity of stiller waters.

Maybe the mediation, then, is a raft they can use to paddle out of the rough waters; and once the mediator comes up for air and removes the snorkel, maybe he or she can help point them toward the shore of settlement.

***

David I. Karp is a full time independent mediator of real estate and business disputes in Southern California. His website is at http://karpmediation.com .

*This post is marked “Advertisement” so as to comply with the State Bar’s Rules of Professional Conduct if applicable.

The Off Ramp of Mediation

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Being in litigation is like being on the highway in Southern California.

The road is hardly ever clear; there is traffic congestion ahead inasmuch as the courts are overloaded with pending cases.

There are unexpected delays and roadblocks, all the time.

There is stop-and-go traffic along the way while one waits for something unforeseen to clear up ahead.

There are those costs (filing fees/attorneys fees), as on a toll road, to keep moving ahead.

There are certainly collisions that take place as people argue over discovery issues or whatever.

Sometimes people run out of gas, so to speak, as resources dry up to pay for the litigation.

Sometimes one can get to his or her destination (trial), with enough patience, perseverance and pluck.

Sometimes, one reaches a dead end, as with dispositive motions.

Or crashes, as with losing at trial.

Fortunately, there are off ramps with rest stops.

One can get off the litigation highway with mediation.

Mediation is a place to take a break, check the map, and realize there are other ways to go to reach one’s destination (resolution of the dispute), saving the costs, delays, risks, and wear and tear of all of it.

Take the off ramp and try out mediation; you may not have to rejoin the bumper-to-bumper traffic.

On the other hand, if mediation doesn’t work out for you, you can always get back on the highway at the on ramp across the way.

But you don’t have to; it’s up to you to decide where you want to go and how you want to get there.

***

David I. Karp is a full time independent mediator of real estate and business disputes in Southern California. His website is at http://karpmediation.com .

*This post is marked “Advertisement” so as to comply with the State Bar’s Rules of Professional Conduct if applicable.

Ramblings about Liberty Especially Religious Liberty

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I was looking at the June calendar on my desk and realizing that, soon (June 14), Flag Day will be celebrated.

Flag Day led me to think about the Pledge of Allegiance and its ending phrase “with liberty and justice for all.”

So I looked at some synonyms for liberty. See, https://www.thesaurus.com/browse/liberty . One synonym is self-determination, a concept in mediation that I have written about extensively before. See, generally, https://karpmediation.wordpress.com/category/mediation/ But I digress.

A link on the synonym page brought me to the definition of liberty at https://www.dictionary.com/browse/liberty . The first three definitions on that page are: (1) freedom from arbitrary or despotic government or control; (2)freedom from external or foreign rule; independence; and (b) freedom from control, interference, obligation, restriction, hampering conditions, etc.; power or right of doing, thinking, speaking, etc., according to choice.

Then I looked back at my calendar and realized that a certain religious holiday begins at sundown tonight, June 4: Eid al-Fitr. (Eid Mubarak, by the way, to anyone celebrating the end of Ramadan.) Moreover, the Jewish holiday of Shavuot begins in the evening of Saturday, June 8. (Chag Sameach.)

These holidays, finally, led me to think about religious liberty in our country and, among other things, those travel ban attempts not so long ago aimed at certain countries occupied mainly by Muslim residents. (I could go on about other dismaying immigration issues in the news but I will have to leave that discussion for private conversation.)

Back to religious liberty instead.

In 1790, President George Washington visited Rhode Island. “Upon landing in Newport, Pres. Washington was welcomed by political, military, religious and civic delegations. Best known among these delegations were members of [Touro Synagogue of Congregation] Yeshuat Israel, Newport’s first Jewish congregation, which was led by Moses Seixas (1744 – 1809). To answer their welcome, Washington’s response to their welcome became one of the great statements of American religious liberty.” https://gwmemorial.org/blogs/library-collections/from-freemasons-of-king-david-s-lodge-newport-rhode-island-to-washington-17-august-1790

According to https://www.tourosynagogue.org/history-learning/gw-letter

“The original of Washington’s Letter to the Hebrew Congregations of Newport, Rhode Island is small in size, but its impact on American life is immense. In 340 well-chosen words, the Letter reassures those who had fled religious tyranny that life in their new nation would be different, that religious ‘toleration’ would give way to religious liberty, and that the government would not interfere with individuals in matters of conscience and belief. Quoting the Bible’s Old Testament, Washington writes, [¶] ‘every one shall sit in safety under his own vine and figtree, and there shall be none to make him afraid.’ [¶] He continues: [¶] ‘For happily the Government of the United States gives to bigotry no sanction, to persecution no assistance, requires only that they who live under its protection should demean themselves as good citizens, in giving it on all occasions their effectual support.’”

Perhaps it may be so that President Washington’s words will reach the ears of our leaders and their followers as reminders to continue to “give[ ] to bigotry no sanction, to persecution no assistance” and that our civil liberties, so in danger of erosion, will remain our greatest ambition and our strength as a nation.

As the saying goes, “hazak, hazak, ve-nithazek, be strong, be strong and may we be strengthened.

Also, Eid Mubarak to those who celebrate Eid al-Fitr beginning tonight, and of course Chag Sameach once again.

***

David I. Karp is a full time independent mediator of real estate and business disputes in Southern California who sometimes writes about other things that matter. His website is at http://karpmediation.com .

*This post is marked “Advertisement” so as to comply with the State Bar’s Rules of Professional Conduct if applicable.

Acting Against Self Interest

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Sometimes a mediation session just does not result in a settlement of the dispute then and there.

As a mediator, I must and do respect the parties’ self-determination in this regard. I have written about this before, and I believe wholeheartedly in the voluntariness of the mediation process and the parties’ self-determination. See, e.g., https://karpmediation.wordpress.com/2016/01/24/defining-success-in-mediation-an-ethical-response/

Nevertheless, like other mediators who take their roles seriously as I do, I do sometimes feel as if I am somehow at fault for the settlement not occurring then and there, although I know intellectually (a) that the parties themselves are responsible for the outcome, not me, and (b) that most disputes settle later anyway, sometimes as a direct result of the mediation session.

But sometimes, I just feel that the disputants are making a mistake by not settling, even though they are convinced that they are not. I guess I feel this way sometimes, because I feel that they should have settled and that the settlement would have been a good deal for all.

But I also feel that I cannot inject into the mediation my opinion about their decision-making. As mediator, I do not believe that it is my place to judge them, although I do sometimes ask, “Do you think you are making a mistake?”.

I tell myself that there might be good reasons, and there usually are, why the case did not resolve then and there at the mediation.

It may be that the mediation was too soon (i.e., not ripe for resolution) or there may be other factors involved that preclude resolution in that moment.

For instance, in two recent mediations, the respondents, who were called upon to pay something for the settlement, adamantly claimed that they did not have the money to pay it. (Never mind that that also might mean that the respondents also did not have the money to litigate either.)

But sometimes, I admit, I just “shake my head,” (not physically but in the proverbial sense only), at their decision-making as I see it as acting against their own self interest.

We mediators can and do remind people in the dispute that they should try to avoid self-harm coming from an unresolved dispute, by, among other things: putting the past behind them; understanding and appreciating the other person’s perspective (they don’t have to agree); focusing on their own interests (i.e., managing risk and expense) not on their legal positions or arguments; taking control of uncertainties by working toward a common goal of peace; cooperating with one another (everyone wants something) and compromising (giving up something to get something).

But sometimes they cannot or will not be convinced, and act against their own self-interest, because they are: hurt (emotionally or financially), angry, insulted, embarrassed, disappointed, vindictive, or experiencing a need for justice or some other intangible award that is valuable in their mind. (There are also other psychological barriers settlement, see, e.g., Cognitive Barriers To Success In Mediation: Irrational Attachments To Positions And Other Errors Of Perception That Impact Settlement Decisions, available at http://www.mediate.com//articles/PR_CognitiveBarriers.cfm .)

Even so, because we mediators believe in the voluntariness of mediation and the parties’ own self-determination, we cannot force people to settle, and we must let them live with their decisions, for good or bad, even if we believe they are acting against their own self-interest in leaving a good offer on the table.

Of course, there are also those other glorious days, too, when disputants understand and appreciate their predicament and how to get out of it, and they make their best deal, manage the risk and expense, create certainty for themselves, look ahead to peace, and find a way to live with their decisions to settle although the deal may not be optimal but only barely tolerable under the circumstances.

***

David I. Karp is a full time independent mediator of real estate and business disputes in Southern California. His website is at http://karpmediation.com .

*This post is marked “Advertisement” so as to comply with the State Bar’s Rules of Professional Conduct if applicable.

How Passover and Mediation Might Be Alike

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Most of us undoubtedly know the story of the exodus from Egypt. As you probably also know, Jews all over the world retell the story annually in the spring, in their observance of Passover [Pesach]. Passover begins tomorrow night and I have been thinking of how Passover and mediation might be alike.

In a remarkable paragraph of a volume in my own library, I think I found the answer. The paragraph reads:

The central meaning of Passover [Pesah] is liberation … [it being called] the season of our liberation. Another name for Passover is … the holiday of spring…. The watchwords of both spring and Pesah are rebirth and hope. Thus, the spirit of renewed optimism … [is] reinforced in a Jewish context by Passover with its trumpeting of the possibilities of liberation. Passover reminds us annually that no matter how terrible our situation, we must not lose hope.

(Strassfeld, Michael. The Jewish Holidays: A Guide and Commentary. New York: Harper & Row, 1985, pp 6-7.)

So let me cull out a few concepts here.

“No matter how terrible our situation…” People do not come to mediation unless they are in the midst of a dispute or at least a serious conflict, which may eat at them, day and night, distracting them continuously from their family life, work life, social life, and so forth. It is usually a terrible situation. They may even feel enslaved (another Passover concept), unable to foresee any release or relief from their predicament, their anxieties, uncertainties, even nightmares about their set of circumstances.

Renewed Optimism” and “Hope.” Mediation generally, and mediators in particular, can bring optimism and hope to the table, helping people to sort out their difficulties and enabling them to see a future without the relentless pain or distraction of the conflict.

Liberation.” Mediation “trumpets the possibilities of liberation” from all of the foregoing. It gives an opportunity, in private, for people to learn more about themselves, about each other, about the problems they face and their fears, and about the possible solutions to those problems. Even if mediation does not resolve their problems then and there, it often leads to a resolution at a later time.

Rebirth.” Perhaps “rebirth” is too grandiose a word for mediation, but there is the possibility, even the probability, nevertheless that things will improve as a result of mediation and that therefore peoples’ lives will be better, even renewed, thereafter.

In the final analysis, I love the observance of Passover. I even wrote some haiku about it years ago. See, https://karpmediation.wordpress.com/2012/04/01/passover-haiku/

And I love mediation, its magic in helping people, and its possibility for improving their lives. Which is why I write about it too. See, e.g., https://karpmediation.wordpress.com/2011/06/24/the-magic-moment/ ; https://karpmediation.wordpress.com/2011/06/13/reciprocity-respect-results/ ; https://karpmediation.wordpress.com/2011/07/16/a-measure-of-success-in-mediation/, and so many other posts at https://karpmediation.wordpress.com/category/mediation/ .

Wishing my readers who observe Passover, a happy holiday, and to everyone, a happy life (through mediation or otherwise).

***

David I. Karp is a full time independent mediator of real estate and business disputes in Southern California. His website is at http://karpmediation.com .

*This post is marked “Advertisement” so as to comply with the State Bar’s Rules of Professional Conduct if applicable.

The Emotions of Adjacent Property Disputes

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When someone stands too close to us, we are uncomfortable.  If someone breaks into our home, we feel violated.  If another driver cuts us off on the road, we are upset.

Why?

Among other possible reasons, each of us has a personal space, the impingement into which, I think, threatens us in one way or another.

It occurs to me that the perceived violation of personal space (i.e, “you’re on my property”) may be one reason why mediations involving boundary disputes, easement conflicts, encroachment issues, nuisance, and the like, are so emotional and difficult for litigants to settle.

Sometimes, in these mediations, not only is there a property right at issue as to the land (or interests in the land), the dispute is complicated by the neighbors’ past — sometimes violent — acts or threats of action that have given rise to claims of assault or battery, trespass, damage to property, intentional infliction of emotional distress and so forth.

Let’s face it; angry neighbors can be provocative, vindictive, and outright mean to one another, and each action or reaction fuels the fire of further discord.

Perhaps the threat as to personal space (i.e., “this land is my land”) is one that triggers the fight-or-flight response which hijacks the amygdala and shuts off the cortex, making it hard for one to think clearly about the situation in the moment, or thereafter. See, https://www.verywellmind.com/what-happens-during-an-amygdala-hijack-4165944

And this may be a reason why it is so hard for disputants to settle adjacent property disputes.

People in conflict bring to the mediation their recollections, and their intended recital, of the past turmoil; and their attorneys, as taught in law school, bring to the mediation their analysis of the past events as well.

As I see it, this reflection of the past’s upheaval exacerbates the turbulence in the present (i.e., in the mediation).

And this makes it hard for people to think clearly about resolution.

It is hard for them to switch from their focus on the past, where the problems they face started, to the present/future where the solutions to those problems may occur.

And that translates to time.

A memorable mediation took place a few years ago concerning a claim of prescriptive easement over a portion of a hillside owned by the downslope neighbor but used for recreational purposes by the upslope neighbor. The downslope neighbor was highly incensed by this encroachment and, at the mediation, was red in the face with rage. The upslope neighbor was nearly as upset.

It took nine hours to settle this matter once the disputants’ high emotions were first dealt with and then a sharing arrangement for the disputed parcel could be worked out.

Even in the short term, I have heard that, once the amygdala fires, causing such things as an increased heart rate, a release of adrenaline, shaking, sweating and so forth (ibid.), it may take 20 minutes, more or less, for those effects to wear off and for “normal” conversation to resume.

Which is why I recommend a break in the negotiation sometimes for people to cool off.

So time is one key to mediating these cases.

So is an attentive, empathic, and patient mediator with an understanding of how emotions play into the conflict and the subsequent resolution, if any.

And so are the attorneys with a realistic understanding that, even at the end of the day, the emotions may outweigh the logic of, or their desire for, resolution without trial.

***

David I. Karp is a full time independent mediator of real estate and business disputes in Southern California. His website is at http://karpmediation.com .

*This post is marked “Advertisement” so as to comply with the State Bar’s Rules of Professional Conduct if applicable.

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