For this week’s Guest Post Friday, Musings has a real treat, a repeat visit from Victoria Pynchon. Victoria mediates and arbitrates complex commercial litigation, including multi-party construction disputes, for ADR Services, Inc. in Los Angeles, California. She blogs about negotiation at the Settle It Now Negotiation Blog and about the mediation and arbitration of intellectual property disputes at the IP ADR Blog. You can follow her on Twitter here.
Victoria has recently started a great new Commercial ADR Blog, please check it out.
I used to tell clients with sensitive body parts in a conflict wringer – “the very last person you want to see is a litigator. We are the general, brain and cardiac surgeons of the legal profession – risky, expensive, and potentially life-threatening. Your transactional lawyer is your GP or internal medicine doctor. A great deal at a relatively low cost if you get a general physical at least once a year.”
Now that I’m a mediator, I say “absolutely, positively the last person you want to see is me. If you’re in my office, you have already left the Intensive Care Unit, died and been temporarily posted to purgatory. They bring you to me with pennies on your eye-lids – your insurance adjuster, your litigation attorney, and the carrier’s coverage attorney (you know who he is because he keeps saying “there’s no coverage” even though he’s paying for your defense).
Your “good” case has gone sour or it remains good but the Judge is bad or it’s 50-50 and no one wants to risk trial and judgment. Your deposition has been taken (and left you enraged); your papers have repeatedly been rifled through by your own attorney because the other side keeps asking for them over and over again even though you first produced them two years ago and they have nothing to do with the claim in any event. You’ve answered scores of written questions and have repeatedly been told that your primary concerns are “irrelevant” to your defense even though they seem to be the heart of the matter to you. You feel marginalized and infantilized by the Court whenever you go to watch your attorney argue a motion, and sometimes you feel that way when you talk to your attorney. Everything takes long enough to plan and build an entire subdivision. The other side has asked for a continuance again. The Judge is on vacation, or has retired and the case has been reassigned. Your attorney leaves the firm and is replaced by someone who graduated from law school after this lawsuit was served on you. And she doesn’t seem to know the file.
Sound familiar? If it doesn’t, lucky you! Either way, the boogie man awaits. And he will surely catch you as you crawl out of bed in the middle of the night to double-check the door latch if you mismanage your risk in either of the two following ways.
1. Fail to Obtain and Understand Your Liability Insurance
No one is your pal when it comes to selling you insurance. Not your agent, not your broker and not the carrier. Insurance for potential liability is so complicated that most litigators fail to ask the right insurance questions even after you’ve hired them to defend you. As environmental insurance coverage counsel in the 1990’s and early 00’s, I and my colleagues spent years litigating the issue whether the term “sudden” as used in a liability policy’s pollution exclusion meant “quick” or only unexpected. Really? Really!
What do you need?
Pre-dispute risk management in the form of a professional who is not trying to sell you something. That person is an insurance coverage attorney or a general practitioner or a litigator who also says he understands the law of insurance coverage. Hire him or her to give you a general physical. Get a written opinion about the scope of coverage you have and the type of coverage you need. Buy it.
2. Suppress or Avoid Conflict at the Time it First Arises
No matter how good your pre-dispute planning for post-dispute conflict, you can and will be sued if you suppress or avoid disputes as they happen. A good friend once told me that business people do not have legal problems. Only lawyers have legal problems. Businesses have commercial problems burdened with justice issues. That’s why commercial enterprises seek out the advice of attorneys. Because they’ve experienced a loss that seems unfair or unjust. Justice = Lawyers. Also, Injustice = Lawyers. You don’t hire an attorney to make money. You’re the money maker, the business person. You have a commercial problem that has a commercial solution – like a negotiated resolution. But because of that pesky justice issue, you’ve put your business and your assets in the hands of attorneys. And you need attorneys now that the problem has gotten this big. But let’s look at preventing legal disputes rather than resolving them.
How do you successfully prevent disputes from becoming legal problems while at the same time conducting a business that requires you to be in twelve places at once; respond to the complaints of dozens of sub- and sub-sub-contractors; and, do your own job at the same time? One person at a time.
- Arrange a meeting – in the flesh – preferably over food (which stimulates the production of the body’s “trust” and “loyalty” neurochemicals. Just trust me on this. O.K., don’t trust me; read this article.
- Engage in small talk. This focuses the conversation on you, the person, not on money, the love of which – you’ll recall – is purportedly the source of all evil. Not money itself, mind you. But the love of money. The link on small talk is here.
- Ask. Just ask. A totally open-ended question. “I hear you have a complaint about x, y and z. Please tell me about it. I want to resolve the problem right now.”
- Listen. Just listen. Don’t defend yourself. Don’t shout. Don’t oppose. If you feel yourself getting hot under the collar, say that you need to take a minute to walk around the block. You’ll be back. Tell your disputant that you think much more clearly when not being shouted at or accused of wrong-doing. Assure them that you’re listening. “Look! I’m taking notes.”
- Problem solve. That’s what you’re good at. And collaborative problem solving, in addition to, resolving the problem without litigation, also makes us happy. The link on happiness here.
Ready. Set. Go! Your business is back in your hands and your “justice” issue is resolved before it even got started.
Update: Tim Hughes, over at the Virginia Real Estate, Land Use and Construction Law Blog posted a great reply to this post today.