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How we resolve our disputes

Entries in communication (6)


Back to School

It is the end of August, the “back to school” time of year. Yesterday on the radio, I heard a discussion of what parents need to do to prepare their children for the new school year. The participants began talking about the usual books, pens, paper and other supplies, technology, clothing, etc. Fortunately, before I tuned out, they turned to the more important question of how you prepare children mentally. How do you put them in the right frame of mind to learn both the substance of what is being taught as well as how to interact with teachers and other students? It was good to hear a discussion that encouraged parents to get involved with their children’s education. Too many parents these days use the schools merely as babysitters, to take care of their children while the parents are at work. Education should continue at home, not just in the classroom.

The discussion soon focused on problems that arise at school that can turn children off to education, like bad teachers and bullies. What is a parent to do? How involved do they need to be? What lesson should parents give children to prepare them for obstacles at school? The answer was a pleasant surprise to me. In an age where some parents are too uninvolved and others are over-involved (so-called “helicopter parents” who hover over their children), I expected to hear something about finding the middle ground or happy medium. Instead, what I heard was elegantly simple: “Work it out!” The participants in this discussion did not urge parents to monitor every problem, call school to complain about bad teachers or bullies, or help their children out of every difficulty. Rather, they urged parents to tell their children that problems and conflicts will occur, and children must be prepared to work it out and resolve the problems themselves. Of course, this requires children to know how to stand up for themselves and be their own advocates, without resorting to violence. This is something both teachers and parents should help children do. It is a skill that will help them throughout their lives. Sometimes, they will be able to do it themselves and other times they will not. But if they try, they will at least learn when they need to seek help and who to seek it from.

This discussion should be required material in business schools. I have seen people turn their business problems over to lawyers and tell them to “handle it,” when the parties themselves could have worked it out more efficiently if they knew how to communicate and advocate for themselves effectively. Fortunately, many attorneys are skilled negotiators and advocates in and out of the courtroom. But it certainly makes the attorney’s job easier if the client is also involved in and adept at the process. That is a skill that can and should be learned in school. When parties in dispute cannot get the other side’s attention or have trouble focusing on the issues, that is when attorneys or mediators need to be called in. And then it is time for everyone to go back to school and find a way to work it out.


Lost in translation

In the 2003 film Lost in Translation, actor Bill Murray’s character frequently listens to one of his Japanese hosts or directors ramble on for at least a minute in Japanese only to have a translator explain it in English in a few seconds. Murray looks at the interpreter incredulously and says “Is that really all he said?” Obviously, the interpreter greatly oversimplified what was said and omitted any implication the Japanese speaker’s tone or inflection might have conveyed.

In my mediation training, we were taught to try to restate participants’ concerns in other words, showing both concern and understanding. However, even when all the parties are speaking the same language, this technique runs the risk of misstating or oversimplifying a participant’s concerns or interests. This does not mean that a mediator should not try to restate the concerns and interests. Rather, the mediator must understand that the opposing sides in a dispute frequently have different understandings of the facts based upon their own narrative. Even when speaking the same language, something can be lost in translation. As George Bernard Shaw noted, “England and America are two countries separated by a common language.” Similarly, business partners, competitors, buyers and sellers, and even spouses can speak in jargon or terms that are unfamiliar to others. Sometimes, this is what causes the dispute or conflict. Finding common ground requires the parties to be speaking the same language and understanding each other’s terminology.

In one recent mediation, the participants were arguing about whether a computerized system was defective. One party referred to a pass code. The other said there was no such thing, but there was a registration key. Ultimately, it appeared they were talking about the same thing but they thought it was different. Helping them realize what the other was talking about, even in the same language, became my most difficult challenge. Without a mediator, they might never have reached an agreement. I’m not bilingual, but it seems I can help translate English to English.


Failure to communicate

As if people facing foreclosure of the mortgages on their homes did not already have enough problems, a new wave of scam artists is targeting them.  According to the FTC, so-called forensic loan auditors are offering to review mortgage loan documents to determine whether the lenders complied with state and federal mortgage lending laws.  The other day, a client came to me with an ad from one such company.  The “auditors” say the borrower can use an audit report to avoid foreclosure, accelerate the loan modification process, reduce loan principal, or even cancel a loan.  Of course, they expect the borrower to pay large up front fees in advance.  This is illegal in many states.  Even if it is not illegal, it is foolish.  The FTC recommends that borrowers talk directly to their lenders to negotiate a new repayment schedule. 

Why would someone already deeply in debt, unable to pay their mortgage, fork over hundreds or thousands of dollars to someone to do what they could do themselves?  Two reasons.  First, many lenders or mortgage servicers are so swamped with delinquent mortgages that they do not have sufficient personnel to talk to every borrower who needs help.  Borrowers cannot get in touch with anyone who has authority to work out a new payment plan, so they think that someone with a fancy sounding title, like forensic mortgage loan auditor, might have better luck.  Second, borrowers may lack confidence in their own negotiation skills.  In either case, the person to see for help is a lawyer.  Most lawyers will charge less than the scam artists and will not waste time searching for unnecessary negotiating leverage.  Borrowers already have all the leverage they need.  Banks do not really want to own all of the homes securing their mortgage loans.  If the borrower’s lawyer cannot get a response from the lender, he will certainly be able to get a response from the lender’s attorney when a foreclosure action is filed. 

As they said in the movie Cool Hand Luke, “what we’ve got here is failure to communicate.”  The solution to a lack of communication, or inability to communicate, is to start talking.  If mediation is available or required, the borrower should definitely take advantage of it, using the mediator to help negotiate with the lender.  Ignoring the problem or hoping someone will find a silver bullet to make it go away is rarely the answer.  In the current economy, mortgage default and foreclosure are legal problems that no one should be embarrased to talk about. 



Wisconsin has a “Right to Cure Law” that, according to the state Department of Commerce, “provides timetables and steps to help solve disputes and misunderstandings between consumers and contractors related to residential construction and remodeling, before going to court or arbitration.”  I have litigated or arbitrated enough home construction defect claims to conclude that the law is not helpful in resolving such disputes.  In fact, the law essentially does three things:

  • requires contractors to give notice of the provisions of the law to consumers before beginning construction;
  • if the contractor gives the consumer the appropriate notice and the consumer gives the contractor notice of any alleged defects in workmanship or materials, the contractor then has the right to cure the defect or otherwise respond to the claim; 
  • if the consumer does not follow the steps and abide by the timetables provided by the law, the contractor can have a court dismiss or stay any litigation or arbitration initiated by the consumer. 

Thus, the law merely requires an unsatisfied consumer to jump over a set of hurdles before pursuing a legal remedy in court or arbitration.  It does nothing to promote successful communication or dispute resolution. 

I am sure that many, if not most, consumer complaints against home builders or remodelers are resolved without resort to litigation if the parties are communicating successfully.  If they are not doing so, they will need the help of a skilled independent communicator—i.e., a mediator—in order to avoid misunderstandings and litigation. 

This is not a criticism of the Wisconsin courts, the legislature or the Department of Commerce.  They have every right and reason to prescribe procedural prerequisites to commencing litigation.  But they cannot prescribe outcomes, nor can they facilitate successful communication.  That is the role of the mediator.


Discovering the costs of discovery

A couple of recent articles in the Metropolitan Corporate Counsel highlight the effect that the cost of conducting discovery in complex civil litigation has on settling such cases.  It used to be that an attorney could file a lawsuit on behalf of client and serve it on the defendants along with interrogatories, requests for production of documents, and maybe a notice of deposition or two.  With notice pleading, the plaintiff did not have to be certain of who was responsible for the loss that prompted the lawsuit, or even how exactly it happened.  They would figure that out after reviewing defendants’ records and statements. 

Not anymore.  Most corporate defendants’ records and statements are now maintained in electronic documents and communications.  Accessing such records often requires large investments of time and money in technology and technically savvy personnel.  So the cost of conducting litigation, and e-discovery,has grown enormously for both plaintiffs and defendants.  The courts’ response has been to require more fact pleading and to restrict pretrial discovery by imposing prerequisites such as “meet and confer” conferences to discuss the costs and plan the course of discovery.  Attorneys who normally represent defendants in civil cases complain that this increases the cost of litigation and prompts settlements just to avoid legal costs, even where there is no or minimal liability.  Attorneys who normally represent plaintiffs complain that fact pleading and limits on discovery deter economically impaired plaintiffs from pursuing actions, unless the damages are great enough and liability is clear enough even without knowing defendants’ internal statements and documents.  These considerations apply equally to corporations and individuals.  Corporations can be defendants (e.g., securities, products liability, and employment discrimination cases), and they can be plaintiffs (e.g., intellectual property, real estate, and breach of fiduciary duty cases).  Likewise, individuals can be plaintiffs (e.g., personal injury, breach of contract, and consumer claims) as well as defendants (e.g., embezzlement and fraud schemes, civil RICO actions, breach of non-compete agreements).  Regardless of which side of the fence you sit on, a dispute is going to cost money to resolve. 

It takes investigation and preparation in order to negotiate just as it does to litigate.  The question is whether you need a judge or jury to help you resolve the dispute, or can you do it informally?  Some people are afraid to negotiate because they think it indicates weakness.  But that is true only if they have not investigated or prepared their claim or defense adequately.  So the question of whether to litigate or negotiate a settlement should not depend on the cost of discovery.  If you need a court’s help to get the information necessary to an adequate evaluation of your case, then go to court.  If not, a negotiated settlement is almost always preferable. 

Knowledge is power, and knowledge may cost money.  But, as the saying goes, if you think education is expensive, try ignorance.