FEDERAL BAR ASSOCIATION Fifth Annual FBA Hawaii Conference HAWAII CHAPTER Fifth Annual FBA Hawaii Conference December 6, 2013 Royal Hawaiian Hotel Copyright Simeon H. Baum 2013; Resolve Mediation Services, Inc. 1211 Avenue of the Americas, 40th floor, New York, NY 10036 (212)355-6527; fax (212) 753-0396; http://www.mediators.com; email:SimeonHB@disputeResolve.com

Chapter 3: Mediation & Discovery Simeon H. Baum ThomsonReuters/Westlaw FEDERAL BAR ASSOCIATION HAWAII CHAPTER IP, e-Discovery & ADR December 6, 2013 Royal Hawaiian Hotel Chapter 3: Mediation & Discovery Simeon H. Baum ThomsonReuters/Westlaw Copyright Simeon H. Baum 2013; Resolve Mediation Services, Inc. 1211 Avenue of the Americas, 40th floor, New York, NY 10036 (212)355-6527; fax (212) 753-0396; http://www.mediators.com; email:SimeonHB@disputeResolve.com

Time & Cost

Various Views of the Mediator Party Based Mediations (S Mackenzie). [CAN GO INTO SECTION ON CONVENING] Gives examples of where interests focus, party driven process produced superior process and outcomes E.g., identifying ‘er concern re raiding led to settlement P’ship breakup: Independent evaluation of assets scheduled – matter settled Multi-national dispute. Pre-mediation caucuses – settled in opening joint session. Gives examples where structuring discussion to help parties exchange info produces resolution Private meeting of new CEO with old CEO (fraudulently dismissed before sale of co) enables new to empathize/recognize injustice with old and convince old that sale was not contemplated at time of termination Robert Benjamin – Guerilla Mediation – Use of Warfare strategies. Taking holistic approach to human nature – good, bad, and ugly – and acting accordingly Peter Adler – Protean Style – experimenting shallow and deep – and making adjustments on all levels – facilitative, evaluative, etc. Services view. Services provided by Mediator - Myth – Mediator as Settlement Broker (Schlosser) Robert Benjamin – Trickster (e.g., dealing w cognitive barriers) Outcomes v services Services: Convening Creating Safe/Confidential Space Anchoring Adjustment e.g., off hand comment by mediator that in recent, similar cases, settlement range has been in low six-figures Compassion Building Trust Empathic communication Leadership De-escalation [can talk about conflict steps – escalation/de-escalation] Reality checking Facilitation Problem Solving Identification of interests, needs, goals, desires Acknowledgement and witnessing of injustices Information Management and Exchange Decision-making assistance Managing the Auction Negotiation brokering (coaching) Accountability to agreements can always come back to me finalizing terms (bells and whistles) Parties know mediator is watching (honor) Mediator Selection & Style disclosures Dovetails with Convening – style may be function of party/representative needs & preferences, as well as of potential for session or outcome 4

Mediator Roles Facilitative Transformative Evaluative Understanding Based Protean Services View Party Based Mediations (S Mackenzie). [CAN GO INTO SECTION ON CONVENING] Gives examples of where interests focus, party driven process produced superior process and outcomes E.g., identifying ‘er concern re raiding led to settlement P’ship breakup: Independent evaluation of assets scheduled – matter settled Multi-national dispute. Pre-mediation caucuses – settled in opening joint session. Gives examples where structuring discussion to help parties exchange info produces resolution Private meeting of new CEO with old CEO (fraudulently dismissed before sale of co) enables new to empathize/recognize injustice with old and convince old that sale was not contemplated at time of termination Robert Benjamin – Guerilla Mediation – Use of Warfare strategies. Taking holistic approach to human nature – good, bad, and ugly – and acting accordingly Peter Adler – Protean Style – experimenting shallow and deep – and making adjustments on all levels – facilitative, evaluative, etc. Services view. Services provided by Mediator - Myth – Mediator as Settlement Broker (Schlosser) Robert Benjamin – Trickster (e.g., dealing w cognitive barriers) Outcomes v services Services: Convening Creating Safe/Confidential Space Anchoring Adjustment e.g., off hand comment by mediator that in recent, similar cases, settlement range has been in low six-figures Compassion Building Trust Empathic communication Leadership De-escalation [can talk about conflict steps – escalation/de-escalation] Reality checking Facilitation Problem Solving Identification of interests, needs, goals, desires Acknowledgement and witnessing of injustices Information Management and Exchange Decision-making assistance Managing the Auction Negotiation brokering (coaching) Accountability to agreements can always come back to me finalizing terms (bells and whistles) Parties know mediator is watching (honor) Mediator Selection & Style disclosures Dovetails with Convening – style may be function of party/representative needs & preferences, as well as of potential for session or outcome 5

Negotiation Coach Timing Impact Managing Expectations Tone Framing / Messages Bracketing End Games The Mediator JUST CITE GENERALLY NOW, TO ADD TO LIST OF MEDIATORS FUNCTIONS & PURPOSES. Will address specifics during S Hochman Barriers to Negotiation infra.

FISHER/URY MODEL OF COOPERATIVE NEGOTIATION 1. SEPARATE PEOPLE FROM PROBLEM 2. FOCUS ON INTERESTS, NOT POSITIONS 3. DEVELOP OPTIONS FOR MUTUAL GAIN 4. APPLY STANDARDS 5. CONSIDER “BATNA”, “WATNA”, “MLATNA” (BEST, WORST AND MOST LIKELY ALTERNATIVES TO A NEGOTIATED AGREEMENT) (Derived from Fisher, R., URY, W., AND Patton, B. Getting to Yes – Negotiating Agreement Without Giving In. Penguin Books (2nd ed. 1991)

HOW MUCH JUSTICE CAN YOU AFFORD?

OTHER BENEFITS OF MEDIATION Party Control of Process Party Control of Outcome Flexibility of Remedy Building Understanding Enhanced Communications Relationship Preservation or Repair Reducing Reputational Risk Limiting Disruption Confidentiality & Information Disclosure

Information Spectrum MEDIATION DISCOVERY PARADOX: MORE INFORMATION IN LESS TIME

Informational Aikido – Bypassing Entanglement So, we have an exercise to start off the morning. 11

Mediation Discovery Paradox Cont’d More Information in Less Time Hashing it Out – Directly or With Experts Reducing Informational Asymmetry Going for the Gold – Selecting Key Discovery Plain Inquiry, Plain Talk Greasing the Wheels of Discovery Forgiveness and Accepting the Unknown (forgive & forget) Let them speak. Let the criticism, complaint, emotion come. Keep a safe distance. Not too familiar, but also there, attentive, present and receptive. Where appropriate, step off the line of direct attack. Do not fight against the force. Join with the parties. Sit on the same side of the table. Take their needs and concerns as ones own. Show empathy. Reframe. 12

Developing Information in Mediation Preparation Tips – Pre Mediation Statement and Initial Disclosures Taking a break – for experts, deposition, D&I, etc. Tax information Third parties Financial Information Collaborative Info Development Let them speak. Let the criticism, complaint, emotion come. Keep a safe distance. Not too familiar, but also there, attentive, present and receptive. Where appropriate, step off the line of direct attack. Do not fight against the force. Join with the parties. Sit on the same side of the table. Take their needs and concerns as ones own. Show empathy. Reframe. 13

Preparation “You mean no one remembered to bring a rock?” What do you do to prepare for a mediation? Develop factual information Develop legal analysis Coordinate with counsel Combine risk analysis with transaction cost analysis to get BATNA. Coordinate internally within Company hierarchy to have appropriate authority. Set 3 possible deal numbers in advance: (1) rationally supported best outcome; (2) reasonable outcome, (3) outcome that is of equal value to going forward with the case (BATNA) – BUT stay open to reevaluate – either way – in mediation. Identify and try to resolve coverage issues in advance of mediation. If not resolvable alone, consider using mediator to do coverage mediation. Have (and help) counsel prepare persuasive information, developed in persuasive form, to be able to share with other parties. See more on Presentation, Slide #____ (Experts, PowerPoint, Blowups, Props, Day in the life). Be sure counsel prepares the Mediator with good pre-mediation statement and supporting exhibits/information. Subro professional review and coordinate pre-mediation statement with counsel, if it does not cause undue delay. “You mean no one remembered to bring a rock?” 14

Preparation Client BATNA, Info & Game Plan Pre-Mediation Conferences Pre-Mediation Statement – can include: “YOU MEAN NO ONE REMEMBERED TO BRING A ROCK.” Preparation: What do you do to prepare for a mediation? Develop factual information Develop legal analysis Coordinate with counsel Combine risk analysis with transaction cost analysis to get BATNA. Coordinate internally within Company hierarchy to have appropriate authority. Set 3 possible deal numbers in advance: (1) rationally supported best outcome; (2) reasonable outcome, (3) outcome that is of equal value to going forward with the case (BATNA) – BUT stay open to reevaluate – either way – in mediation. Identify and try to resolve coverage issues in advance of mediation. If not resolvable alone, consider using mediator to do coverage mediation. Have (and help) counsel prepare persuasive information, developed in persuasive form, to be able to share with other parties. See more on Presentation, Slide #____ (Experts, PowerPoint, Blowups, Props, Day in the life). Be sure counsel prepares the Mediator with good pre-mediation statement and supporting exhibits/information. Subro professional review and coordinate pre-mediation statement with counsel, if it does not cause undue delay. Pertinent Facts Legal Analysis Party Dynamics Settlement History Thoughts for Resolution Annex Key Documents 15

Get the Right Parties to the Table Be sure your own person with full authority attends. Use Mediator to maximize likelihood that proper representatives from all parties/insurers will attend. Consider extent to which persons with factual knowledge and Experts will be useful at mediation. “I don’t have to be a team player, Crawford. I’m the team owner.” 16

Get Cellphone for Absent Participant RECEPTIONIST & OUIJI BOARD. MEDIATION BY SKYPE. Has anyone done this? Does it work? Pros/cons. “I’ll check to see if he’s available.” 17

Developing Information in Mediation Preparation Tips – Pre Mediation Statement and Initial Disclosures Taking a break – for experts, deposition, D&I, etc. Tax information Third parties Financial Information Collaborative Info Development Let them speak. Let the criticism, complaint, emotion come. Keep a safe distance. Not too familiar, but also there, attentive, present and receptive. Where appropriate, step off the line of direct attack. Do not fight against the force. Join with the parties. Sit on the same side of the table. Take their needs and concerns as ones own. Show empathy. Reframe. 18

Confidentiality and Disclosure Let them speak. Let the criticism, complaint, emotion come. Keep a safe distance. Not too familiar, but also there, attentive, present and receptive. Where appropriate, step off the line of direct attack. Do not fight against the force. Join with the parties. Sit on the same side of the table. Take their needs and concerns as ones own. Show empathy. Reframe. Skimming Cream from the Milk – Double Blind Disclosure Disclosures Just for Mediation – e.g., Financial Information 19

Broader Range of Information Today’s Theme Interests Issues Proposals Feelings Principles Values Rules Visions Stories BATNAs – including Legal & Deal Let them speak. Let the criticism, complaint, emotion come. Keep a safe distance. Not too familiar, but also there, attentive, present and receptive. Where appropriate, step off the line of direct attack. Do not fight against the force. Join with the parties. Sit on the same side of the table. Take their needs and concerns as ones own. Show empathy. Reframe. 20

The Spigot of Disclosure

How do you Handle the Smoking Gun? CHALLENGING QUESTION OF DISCLOSING INFORMATION IN MEDIATION: IF YOU KEEP IT TO YOURSELF, THE OTHER PARTY DOES NOT MOVE, IF YOU DISCLOSE IT THERE IS CONCERN THAT IF THE CASE DOES NOT SETTLE, THE OTHER PARTY WILL WORK AROUND THE PROBLEM. 22

Zone of Possible Agreement

Settle Now or Wait Until Trial? SH – LEAD IN FROM DISCUSSION OF BAD FAITH IN INSURANCE CONTEXT. WHEN DO YOU SETTLE RATHER THAN WAIT TO SEE IF YOUR THEORY IS PROVED TRUE AFTER LONG, EXPENSIVE DISCOVERY & TRIAL? “Curiosity.” 24

Mediating Discovery Disputes Pragmatic & Holistic – one piece relates to all Lift a Pebble and Embrace (& be Embraced by) the World Can do it – All the usual approaches can apply to the limited issue

Unique IP Considerations – Pressures & Issues Cicada Syndrome - Time Hen & Chick – Inventor Love a/k/a Pygmalian (sp) – High Hopes Newton/Leibnitz – Dynamic Duo Same in Art & Fashion Grey Zones – scope definitions Cultural Issues – multinational deals

Unique IP Considerations – Pressures & Issues Role Differentiation & Varying Capacities In the Dark - $$$ Scope definition

Unique IP Considerations – Resolutions Marketing Licensing Royalties IP transfers … Buy-back Market/territory division $$$ Scope definition Joint Marketing and Cross Marketing Functional Division (retail, mftr, wholesale, domestic, global) Restructuring