Many years ago, Robert Fisher and William Ury coined the acronym ‘BATNA’ meaning “Best Alternative To A Negotiated Agreement.” It represents the available alternatives when a party is unable to negotiate an agreement. In the context of litigation, it often means going to trial.
 

      Based on a study just published by Vanderbilt University Law School entitled “Blinking On the Bench: How Judges Decide Cases” by Chris Guthrie, Vanderbilt Law School, Jeffrey Rachlinski, Cornell Law School and Andrew J. Wistrich, U.S. District Court, Central District of California, going to trial may be a party’s Worst Alternative To A Negotiated Agreement or WATNA. The reason is that it seems (based on this research) that “. . . judges are predominately intuitive decision makers, and intuitive judgments are often flawed.” (Id. at 105). That is, judges often use their intuition to decide matters, and often times, that intuition is wrong.
 

      In their introduction, the authors explain there are two tried and true methods of judging. The first, known as “formalist,” requires judges to “. . .apply the governing law to the facts of a case in a logical, mechanical and deliberative way.” (Id. at 102). The second approach, known as “legal realism”, allows judges to “follow an intuitive process to reach conclusions which they only later rationalize with deliberate reasoning. For the realist, the judge “decides by feeling, not by judgment; by “hunching” and not by ratiocination” and later uses deliberative faculties “not only to justify that intuition to himself but make it pass muster.” ”  (Id.)
   

          To conduct their research, the authors asked 295 Florida state court circuit judges five questions of which three were the Cognitive Reflection Test. That test asks in full:
    

        1. A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost?
_____cents
   

         2. If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets?
  _____minutes

      3. In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake?
_____days.  

       For the answers, see p. 110-111 of the study.
    

         The results of the study reveal that “judges rely largely on intuition but sometimes override that intuition with deductive reasoning.” (Id. at 112). Further, judges tend  to be influenced by the initial numeric estimates made to them. An example is the amount that a judge awards in damages after learning what had been the initial demand by plaintiff. (Id. at 119-123).
 

      The study also found that judges  often use “hindsight bias” or tend “to overestimate the predictability of past events.” “The bias arises from an intuitive sense that the outcome that actually happened must have been inevitable.” (Id. at 123). For example, learning the outcome of an event will influence a judge in her later assessment of a case. Thus, if a judge learns what happens to a case on appeal, she will tend to conclude that the result was inevitable.
     

        In sum, the study concludes that judges rely heavily on intuition when making decisions on the bench and allow distractions to influence their decisions:
 

           “When awarding damages, assessing liability based on statistical evidence, and predicting outcomes on appeal, judges seem inclined to make intuitive judgments. They are also vulnerable to such distractions as absurd settlement demands, unrelated numeric caps and vivid fact patterns.” (Id. at 127).

      So. . . in your next mediation, you may want to pause and consider whether the settlement offer or demand being proposed is better or worse than a trial judge deciding the matter based on intuition (that may be faulty) and/or distractions that may or may not be relevant to your case.
    

         . . . Just something to think about.  

       Influencing and persuading people are keys to any successful negotiation and/or mediation. Each party to a dispute uses persuasion to convince the other party that her viewpoint should form the predicate for settlement.
 

      In this month’s edition of “One Minute Negotiation Tips” by the Los Angeles County Bar, Linda Bulmash notes that Dr. Robert Cialdini has identified six essential principles of negotiation and mediation. (Dr. Cialdini is the Regent’s Professor of Social Psychology at Arizona State University).
 

      By following these principles, a party has a greater probability of getting what she wants. These principles include:
    

        “1. Reciprocity. People feel obligated to give back to people who have given to them. This is a method for survival. The principle of reciprocity is expressed in such common sayings as “tit for tat,” the “golden rule” and  “an eye for an eye”.
  

         “2. Liking. People are more likely to say yes to people they like and know. People like people who are similar to them and with whom they are comfortable.
  

         “3. Consensus. People like to do what is comfortable. Many people make choices based on what others who are similarly situated are doing.
    

       “4.  Authority. People often make decisions in reliance on the opinion/guidance of those with apparent superior knowledge. Actual superior knowledge is not necessary, e.g., actors who look like doctors make commercials touting certain medications.
     

      “5. Consistency. Once people make a decision or invest their resources (time, money, emotions) they feel pressure to continue with that commitment. Get them to say yes about small things, and it will be easier to get them to say yes about bigger things.
    

       “6.  Scarcity. People value things that are less available. Willingness to buy an item increases when a time limit is set or, the supply is limited. An example of the impact of limited supply is the diamond market. People are willing to pay more for diamonds because of their perceived scarcity.” 
     

      Dr. Robert Cialdini, Influence: Science and Practice (4th ed. 2000). 

      So. . . the next time you want something whether in a social setting - from your friends or significant other or in a business setting - from  your colleagues, supervisors or competitors or in a litigation setting – from your adversary, think about these principles and apply them.  According to Dr. Cialdini, your success, in all probability, will surpass your expectations.
    

        . . . Just  something to think about. 
 
 
 
 

Suppose a manufacturer, prior to litigation, agrees to repurchase a motorcycle which the owner claims to be a “lemon” under the Song Beverly Consumer Warranty Act, Civil Code Section 1790 et seq.,  but refuses the additional request to pay a civil penalty and/or attorneys’ fees.  Does the “Lemon  Law” require it to pay such additional  sums in a pre-litigation setting?

Last week, the Fourth Appellate District of the California Court of Appeal addressed such issues in Dominquez vs American Suzuki Motor Corporation, Case No. G038373.
               

To find out what the  court decided, use this link: Dominquez vs American Suzuki Motor Corporation.

       In November 2006, I wrote a blog entitled “Preparing For Mediation.” Its essence was that in order for a mediation to be successful (i.e. resolve the dispute), each party must prepare for the mediation. Otherwise, the mediation will end in frustration and disappointment.
    

         I visit this topic again because it bears emphasis. If each party to the dispute is not apprised of at least the major strengths and weaknesses of her case prior to attending the mediation (i.e. communication and preparation), the mediation will, in all probability, be fruitless and a waste of time.
 

      Why is this topic so important? Because  it happened again last week. Once more, I was mediating a matter filed in court so that the plaintiff, defendant and their respective counsel were all present.
       

      Evidently, several weeks prior to the mediation, the defense attorney had a conversation with one of the plaintiff’s counsel in which she pointed out that the plaintiff did not have a case: the law plaintiff was suing under did not apply to plaintiff. The plaintiff attorney responded by stating she would look into it to determine if, indeed, whether the statute was applicable to her client.
   

          Well. . . it seems that the plaintiff’s attorney apparently did not apprise either her client or the other attorneys in her firm about this conversation (i.e. lack of communication). Another attorney appeared with plaintiff at the mediation and due to this lack of communication (and perhaps lack of preparatory research), was wholly unprepared for what happened at the mediation.
 

       I started the mediation with a joint session. After the plaintiff and her counsel made their introductory remarks, the defense attorney presented her view that plaintiff did not have a case at all because the statutes at issue were not applicable.
    

          I could tell from the look on the face of both the plaintiff attorney and her client that they were completely taken aback by defense counsel’s words: these words were all new to each of them. The attorney was completely unaware and unprepared for the notion that her client might not fit within the statutes and thus might not have a case. Judging by the look on the client’s face, this point had not been discussed with the client.
    

         Needless to say, the mediation went nowhere fast. The plaintiff’s attorney expressed a need to research the statutes and case law and confer with her colleagues about this new turn of events. No commitments could be made by plaintiff then and there. While the defendant was prepared to settle for a minimal sum, neither the plaintiff nor her client could so quickly and completely change their mindset to accept the fact that plaintiff had no case. They had walked into the mediation an hour earlier thinking they had a great case! How could they mentally and emotionally travel so quickly from having a “great case” to “no case!” They could not and to think otherwise, would have been unrealistic. Both plaintiff and counsel needed to think this through.
       

      So. . . a valuable opportunity to resolve a dispute was lost. The plaintiff walked out angry and frustrated, and her attorney probably walked out feeling the same way . . . but for other reasons.
   

          I do not know whether this matter will settle. There are various reasons why it should settle. But the end result is that a matter that could have been settled at mediation will proceed forward (at least for a little while) causing the parties to incur additional (and perhaps unnecessary) time and expense in litigation . . . simply because not everyone was prepared for the mediation.
 

            . . . Just something to think  about. . . once again!

       At some point in just about every dispute that I have mediated, one of the parties has said to me, “This is our final offer – tell the other side to take it or leave it!”
      

      How do I respond? It depends upon the situation at the time. In an interesting article entitled “Threat Response at the Bargaining Table” in the January 2008 issue of the Harvard Negotiation Newsletter, the authors suggest the following response.
 

      First, immediately call for a break – take a time out to allow the parties to calm down rather than storm out of the mediation. Then once the party is calm, analyze the threat: is it one that the party is likely to follow through on or was it simply made in the heat of the moment and so should be ignored? Is the threat one that was made – not for the other party’s benefit - but in an effort to save face with third parties who may or may not be participating in the mediation? If so, do not take the threat seriously.
 

      However, if you believe the threat may be serious, then you need to defuse the situation. To do this, paraphrase back to the party what you heard her say, to make sure you heard it correctly. Often, as a result of the paraphrasing, the party will realize that she did not mean to say what you heard – it “came out” wrong or you “heard” it wrong. This provides her with an opportunity to save face and claim it was a misunderstanding.
 

      Further, you can simply ask broad open-ended questions to the party in response to the threat, in an effort to understand why she made the ultimatum. By asking such questions, the party will reveal her reasoning or thought process, and in the process of doing so, may change her mind. Again, a “misunderstanding” or a “miscommunication” may be uncovered that allows the party to save face and propose something different and not so threatening.
 

      The above two suggestions are predicated on “active listening” – to really listen to what is being said and what is not being said: To understand and acknowledge the emotions behind the words. Oftentimes, simply acknowledging that the other person is angry or frustrated greatly defuses the situation and builds forward momentum. Once you acknowledge how the other party feels and what is the situation from her perspective or side of the table, she will be more inclined to work with you in resolving the problem.
     

       So. . . the next time you are in a negotiation or a mediation and the other party makes a threat. . . don’t react with a knee-jerk response. Rather, sit back, take a deep breathe and analyze why and where the threat is coming from. Should you simply ignore it or take it as a signal of something deeper that is going on and use “active listening” to find out? . . .Using such a measured response will more likely lead to a resolution instead of everyone storming out in a huff!
     

        . . . Just something to think about.