A Good Bad-Faith Policy?

“[I]f . . . I act for the Big Bad Wolf against Little Red Riding Hood and I don’t want this dispute resolved, I want to tie it up as long as I possibly can, and mandatory mediation is custom made.  I can waste more time, I can string it along, I can make sure this thing never gets resolved because . . . I know the language.  I know how to make it look like I’m heading in that direction.  I make it look like I can make all the right noises in the world, like this is the most wonderful thing to be involved in when I have no intention of ever resolving this.  I have the intention of making this the most expensive, longest process but is it going to feel good.  It’s going to feel so nice, we’re going to be here and we’re going to talk the talk but we’re not going to walk the walk.  You can tie anybody up and keep them farther away from getting their dispute resolved through mandatory mediation process or a mediation process than anything else.”

That’s what a lawyer told Julie Macfarlane in her study of mandatory mediation in Ontario.

Obviously, this is not how court-connected mediation is supposed to work.  Not surprisingly, this approach infuriates opposing parties as well as judges who order parties to mediate.

In response to these concerns, many courts have adopted rules prohibiting “bad faith” participation in mediation and authorizing sanctions against offenders.  I argued that while such rules are well-intended, often they are likely to be ineffective and, ironically, possibly stimulate some bad-faith activities.

Analyzing The Problems And Designing Good Policies

I think that an underlying problem is that some courts have so strongly embraced mandatory mediation programs that they don’t take too kindly to lawyers and litigants who don’t want to settle in mediation.  Some courts have become dependent on mediation programs to dispose of a substantial portion of their caseload and so they don’t want to let people get into court without first mediating.

Unfortunately, when lawyers don’t want to settle in mediation – at least not at the time when mediation is scheduled – it is extremely foreseeable that they would resist and use the mediation programs as tools to advance their adversarial strategies.

Some courts may permit parties to be excused but only after making a motion citing some pretty darn good reasons.  In that situation, many lawyers would prefer to participate in what Julie Macfarlane identified as “twenty-minute mediations” where parties show up to comply with the order and then promptly leave.  One option to reduce bad faith is to make it easy for people to opt out of mediation.

The ABA Section of Dispute Resolution adopted a resolution on good-faith requirements in court-mandated mediation programs.  The resolution recommends that “Court-mandated mediation programs should engage in collaborative planning efforts and establish educational programs about mediation procedures for participants.”

Timing of mediation is likely to be a significant factor in people’s attitudes toward mediation.  If they are forced to mediate before both sides are ready, people are less likely to behave well and settle.  On the other hand, if parties don’t mediate until shortly before a trial date, that may miss opportunities to benefit both sides by settling earlier.

I conducted some focus groups of lawyers and mediators with Jill Morris, the director of the Mediation and Assessment Program of the US District Court for the Western District of Missouri.  This program historically has emphasized early mediation and we found that, not surprisingly, our focus group participants had ideas about how well the existing rules were working and how they might be tweaked.  Soon after the focus groups, the Court considered this input when it revised its rules.

Intriguing Rule in the US District Court for the Western District of Pennsylvania

Comes now the US District Court for the Western District of Pennsylvania to change its good-faith policy.  As reported by Nicole Wilmet in the Resolution Systems Institute (RSI) blog, the Court was receiving too many motions for sanctions and revised its rule to reduce the deter people from making sanctions motions.  The fact that the Court would be motivated to substantially revise the rules reflects their perceptions of problems in their mediation program.

Under the revised rules, parties can give 15 days notice if they don’t want to settle in mediation or aren’t ready to mediate, and then file a motion to amend the ADR referral order.  The effectiveness of this rule change may depend on lawyers’ calculations about the ease of cancelling or postponing a mediation as compared with participating in a mediation with a twenty-minute-mediation mindset.

Even if this opt-out process reduces experiences of bad faith, it wouldn’t avoid them all.  The rule creates a “new process for bringing sanctions and makes the process more arduous.”  Rather than advancing directly to court, parties must first try to work out their disputes between themselves.

The rule states that “any party filing a motion for sanctions regarding ADR, must first serve the other party their proposed motion for sanctions.  Then the parties have 14 days to discuss and try to resolve the issues raised in the motion.  If the parties are able to resolve their issues, nothing further is required.  However, if the parties are not able to resolve their issues, then the party filing for sanctions must first file a Notice of Intent to file for sanctions and certificate confirming the parties discussed the motion and were unable to resolve the issues raised.  The certificate must also identify whether the parties agree or disagree that resolving the motion will implicate confidential information.  Once the party’s Notice of Intent is filed, the court will then schedule a conference in an attempt to resolve the issues before the motion for sanctions is filed.”

Assessing the Effects of the Changes

This approach sounds like it could work well.  A convenient opt-out process could serve as a “pressure valve” to remove cases from mediation that are unlikely to be effective and satisfying.  The requirement of negotiation before litigating bad faith complaints should also remove some cases that would otherwise go through an adversarial court process.  It also might deter some people from filing sanctions motions, which might or might not be a good thing depending on the circumstances.  There would still be potential for abuse by some lawyers and disadvantage to weaker parties, though hopefully this would not occur frequently.

It will be interesting to see if the rules – and perhaps an accompanying cultural shift – will significantly affect mediation dynamics and people’s experiences.  If successful, I would expect to find increased satisfaction and settlement rates, in part due to the exclusion of some cases in which parties don’t want to be there.

I would also expect that there would be decreased invocation of “bad faith” during mediations and court proceedings.  Unfortunately, many practitioners consider bad faith to be when their opponents refuse to make offers they find satisfactory.  If people opt out of mediation, those who do mediate are more likely to feel that the other side is not being unreasonable, even if they don’t settle.

It will be interesting to see whether the revised rule has the intended effects and any significant unintended effects.  It would be great if it is a successful model that other courts would want to adopt or adapt.

Stone Soup Opportunity

This policy change presents a wonderful opportunity for a shared learning experience and perhaps even some action research.  If the Pennsylvania Court is interested, a mediation instructor could arrange for a focus group class with stakeholders such as lawyers, mediators, judges, and court administrators.  Through the miracle of video technology, the class could be anywhere in the country or even in the world.

Instead or in addition, the instructor could assign students to do phone or video interviews with selected stakeholder group representatives.

It would be really cool to make this an action research project, in which students present their findings from interviews to the court stakeholders in a document and/or focus group session.  These Stone Soup activities would not only benefit the students, but also could provide real value to the court.

My post on action research identifies lots of other opportunities to use Stone Soup assignments to do such research.  They can be especially valuable for courts, which have daunting problems and limited resources.  For example, many family courts are overwhelmed with self-represented litigants and the courts might be interested to have students interview various professionals who work in the family court.

Imagine how good students, faculty, practitioners, court administrators, and judges would feel if such a collaboration produced valuable learning for everyone that improved the functioning of the legal system.