Lets Look Behind the Curtain

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The sub-title of Steven Pinker’s 2002 book, The Blank Slate, is “The Modern Denial of Human Nature.” Pinker argues that by rejecting human nature and embracing the notion of “The Blank Slate” (the mind has no innate traits), we deny

“our humanity and our individual preferences, replace[s] hard headed analyses of social problems with feel good slogans, and distort[s] our understanding of government, violence, parenting, and the arts.”

In recent years, there has been an explosion of interest in “conflict resolution” and a proliferation of programs offering certificates and academic degrees in the field. Unfortunately, the mediation business remains largely unaffected by recent advances in neuroscience and biology, even though many of these ideas introduce new and exciting considerations for conflict resolution that go much deeper than conventional analysis.

Pinker argues that many current thinkers have denied the existence of human nature by embracing three linked dogmas: the Blank Slate, the Noble Savage (people are born good and corrupted by society), and the Ghost in the machine (each of us has a soul that makes choices free from biology). No where is that embrace stronger and more prominently on display than in the field of mediation. Does your mediator think you are misbehaving, that you are a good or bad person or that you are simply a product of your environment? Not surprisingly, the field of mediation is failing to realize it great potential, even though it has its foot in the (court room) door.

The central questions:

• Are mediators taught the skills necessary to understand human behavior in conflict?
• Are mediators taught techniques that actually help resolve conflict, i.e. are the techniques widely used by mediators subjected to scientific evaluation to validate their efficacy?
• Is there an incentive to experiment with new techniques?
• Are their resources for mediators to acquire new insights into understanding the nature of conflicts they are asked to help resolve?
• Does the ethical framework under which mediators operate encourage mediator behavior that advances peacemaking?

Here is a list of some of the topics that are NOT included in the current mandated training program for mediators:

• Game Theory
• The Art of Teaching
• Argumentation
• Negotiation Theory
• Biology and Human Behavior

The mediation profession has every reason to encourage and engage in a systematic and ongoing study of what it does. Do mediators have the training to evaluate what others are doing in a mediation or are they left to see conflict only through their own personal experiences? What do we do that works and what do we do that does not work. Why is it impossible to construct a method to study what goes on in a real mediation while protecting privacy and confidentiality?

Doctors study medicine, lawyers study the law, but what, exactly, do mediators study?

Why is anyone surprised? More on the foreclosure debacle.

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In what struck me as a bizarre turn of events, the venerated American Arbitration Association abandoned its effort in Florida to gather anecdotal evidence from mediators of misconduct taking place after the curtain of confidentiality comes down on foreclosure meditations. Specifically, AAA asked mediators to report instances “…in which a party signs the written Roll Call Form stating that they have full authority to settle, but through the mediation discussions it becomes apparent that they lack settlement authority.” A week later came a following email that said “never mind.”

I acknowledge that the number of mortgage foreclosure meditations I’ve handled, measured against all such meditations that have taken place in the last 2 years, fails to establish a statistically compelling result. Nevertheless, I have yet to find a single bank representative who possessed any authority to do anything other than enter data provided by homeowners into computer programs and announce whether or not the homeowner qualified for relief provided by the Treasury Department, Freddie Mac and Fannie Mae. The kinds of data sought is virtually identical in every case and, apart from the so-called hardship letter, there is no opportunity for a borrower to argue any other factors besides numbers. It is “take it or leave it.”

It is an exercise in the absurd to continue to be surprised that lenders ignore the requirement that they have authority to do any more than they are required to do by the federal government. Banks act as agents for the government in administering Treasury Department, Fannie Mae and Freddie Mac programs. Banks are not willing to reduce the principal balances of their loans. They refuse to allow delinquent borrowers to remain in their homes as renters. They refuse to change the terms of the loans. When they act as agents for “investors,” the investors remain invisible and do not take an active role in the disposition of any particular mortgage. The banks and other institutional lenders continue to drive down the price of real estate by insisting on short sales or by abandoning their collateral after foreclosure, they destroy neighborhoods and they displace millions of people. There are many constituencies that have a stake in dealing with this immense and complicated problem but to date, the public is on its own.

Foreclosure Mediation…or not

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A recent article in the St. Petersburg Times offered a glimpse into the residential foreclosure mediation program and revealed some of the challenges facing borrowers who decide to participate. tampabay.com/news/business/…

A series of events has slowed the program: litigation that revealed serious and widespread problems with the documentation legally required for lenders to successfully foreclose on a mortgage; the implosion of several large law firms with thousands of pending foreclosure actions; the fact that the securitization of residential mortgages resulted in banks merely servicing loans for investors who are not required to participate in the mediation; the fact that there are very few programs available to borrowers that address the dramatic decline in the value of their homes; the information about available programs is complicated and inconsistent from one lender to another; the  mediation process itself is deeply flawed because it does not deliver on the promise that the lender’s representative has the full authority to negotiate with the borrower and modify the terms of the loan.

Foreclosure mediations for most borrowers are more like a visit to a Chinese restaurant than an authentic negotiation. They find a menu with a column A and a column B that contain one or two government programs (e.g. HAMP) and a couple of in-house programs offered by the bank or loan servicer. The later programs are cloaked in mystery in that they are not clearly described to the homeowner prior to the mediation. The borrower’s financial information, submitted weeks in advance of the mediation, is frequently reviewed for the first time at the start of the mediation by a bank/lender representative appearing by speaker phone. The “mediation” process involves entering the borrower’s financial information in a computer program and waiting to see if the borrower qualifies for any of the programs that may allow them to stay in their home. Home owners are required to outline illness, job loss and other calamities in a hardship letter which is required to qualify by all of the programs. The other available options include a short sale and a deed in lieu of foreclosure. A common outcome of the mediation has the lender telling the home owner that his/her submission is incomplete or out of date. It is unusual for lenders to agree to a second session. The review process continues by fax, email or phone. The agreements that are achieved at mediation are, according to lenders, often not durable and are defaulted upon in short order.

In some of the in-house programs, banks, convinced that the borrower has income sufficient to pay off the loan over time, take arrearages, legal fees and costs (including the cost of the mediation) and add it to the mortgage balance. For some limited period of time, the may reduce the  interest rate enough to allow the borrower to back into a monthly payment that aligns with his/her current financial circumstances and ability to pay. The 600 pound gorilla in all of this is the fact that so many homes are worth far less than the amount owed and the borrowers have no realistic prospect of ever having anyequity in their homes. This may have much to do with the reluctance of borrowers to participate in the court ordered program.

My very unscientific sampling from 50 +/- mortgage foreclosure mediations suggests to me that the mortgage foreclosure crisis is not so much a morality play as it is the result of the limitations of human nature. There were, no doubt, lots of homeowners who willfully gamed the system.  But from my vantage point, the people who show up at mediations are much more likely to have made poor quality financial decisions that were, when they were made, not unreasonable. Maybe mediation is not the appropriate dispute resolution method for mortgage foreclosures. If the financial system is going to provide a limited menu of choices for homeowners, why not put the work sheets online and let people see for which programs (if any)  they qualify. On the other hand, if society decides that the large scale displacement of families from their homes is unacceptable, then some innovative and creative items can be added to the menu and the integrity of the foreclosure mediation process can be restored.

Neutrality Gone Off the Rails

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I was recently hired as an expert witness to evaluate the behavior of a Florida Supreme Court Certified Mediator.docs/RIVER MEADOWS ORDER.pdf One of the parties accused the mediator of having improperly coerced him into settling.  Here are the unrebutted allegations of misconduct leveled against the mediator:

“…[the mediator] opined that [the plaintiff] had a 60/40 chance of obtaining a $2 million verdict at trial.”

“…after negotiations proved unsuccessful, [the mediator] suggested that the parties consider settling the case for $1.4 million. [The mediator] told the parties they had approximately 48 hours to inform him if they would settle the case for $1.4 million. This settlement amount and consideration period was created solely by [the mediator."

"[One of the parties} became emotional when [the mediator] suggested the $1.4 million number. The mediation was promptly recessed by [the mediator.]

Here is the Mediation Rule (10.370(c)) designed to guide the conduct of mediators when it comes to opinions:

(c) Personal or Professional Opinion. A mediator shall not offer a personal or professional opinion intended to coerce the parties, unduly influence the parties, decide the dispute, or direct a resolution of any issue. Consistent with standards of impartiality and preserving party self‐determination however, a mediator may point out possible outcomes of the case and discuss the merits of a claim or defense. A mediator shall not offer a personal or professional opinion as to how the court in which the case has been filed will resolve the dispute.

Here are a few examples of “opinions” that I think are contemplated by 10.370(c):

Negotiations that have stalled over money. The amount sought and the amount offered do not converge.

1. My opinion is that unless someone’s position changes (eg. pay more/take less) you will not resolve your dispute. Is there anything else a party could say or do that might have value to the other side. Have you thought about …?

2. My opinion is that one of the key elements of a binding contract is missing from your facts. Explain your thinking. How do you intend to deal with this legal issue?

3. Have you considered the consequences of going to trial and losing? Fees/costs/publicity/damage to your reputation, etc.

A mediation for which the parties are unprepared. Do they have critical information.

1. Would it be helpful to you if you knew, as opposed to speculating about, what a key witness is likely to say?

The data you are relying on isn’t here at the mediation and it seems to me it might be helpful to show the other side the actual document.

Do you, as the mediator, act ethically by promoting a settlement figure as your own? Is it reasonable to hold that a particular amount of money is a reasoned basis for a settlement. Do you owe the parties a clear explanation of the reasoning that provides the support for your figure?  If I asked you, the mediator, why the number was one that I should consider, what possible answers could you give me?

  • From what I’ve heard in the other room, I think they’ll pay (my number)/take (my number.)
  • Based on what I’ve heard from you, I think you’ll wind up paying more/getting less than my figure because of the strengths/weaknesses of your case/their case.
  • I arrived at my number based on the outcome of other cases that I handled/I read about and that I think are the same/similar to yours.
  • My opinion is important and should be given great weight so I’m going to give you 48 hours to consider my opinion and decide whether to accept it.

This case demonstrates several important and troubling facts about mediation in Florida. The Courts compel litigants to participate in mediation. Mediators are described by the Courts as neutral and impartial. Mediators who offer an opinion about what they think the parties should do undermine the integrity of the court based mediation process.

Foreclosure Mediation

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I read with great interest Molly Moorehead’s article and today’s editorial in the St Petersburg Timesregarding the mediation of foreclosure actions. Before I begin, let me first say that I am a full-time mediator. I have been a lawyer since 1973 and was certified by the Florida Supreme Court as a mediator in 1989. I have also participated in a number of programs administered by The Collins Center for Public Policy – a class action settlement against Prudential Insurance Company, the R/V Lemon Law mediation program and the mediation of insurance claims that arose from the hurricanes that hit Florida in 2004 and 2005. I will, no doubt, also participate in the Collins Center foreclosure program.

Your paper reported today that roughly 40% of the residential mortgages in this area are in default. The continuing consequences of the mortgage crisis are many and far reaching and have had and continue to have a devastating impact on thousands of families. That having been said, it is a terrible mistake to delay the implementation of the mediation program described in your article.

Mediation is an alternative dispute resolution method, i.e. an alternative to the court system. Vast experience here in Florida and, indeed, throughout the country, has demonstrated that when the stake holders in controversies sit down with each other and have the assistance of a neutral 3rd party (in this context a mediator) the chances of them resolving their dispute on terms that make sense to them is high. Tens of thousands of hurricane related insurance claims that had been ignored (could not get anyone on the phone), delayed, denied or otherwise not handled in a fashion that insureds understood or were satisfied with, were resolved in mediation sessions that seldom lasted longer than 3 hours and for which the insureds paid nothing. The ultimate success of the program (a 93% settlement rate) was predicated on the fact that it was carefully designed to create an accessible, predictable, neutral and competently and efficiently operated program to deal with the issues unique to the controversy about insurance payments for hurricane damage.

The issues involved in the foreclosure of a mortgage are not beyond the comprehension of people who face foreclosure any more than the issues involved in home owners insurance were beyond the understanding of people whose homes had been damaged or destroyed by a hurricane. Because the hurricane claims program was advertised to the public in a way that made the process accessible and predictable, those policy holders who thought they had a claim used the process. Let me be clear, many claims that had been denied by the insurance company had been properly rejected. People are no more likely to have read their mortgage than to have read their homeowners policy. But in a non-adversarial setting, a reality check in which the mortgage and the law are discussed and explained has a way of leveling the playing field. The court room is NOT the place for the kinds of conversations that lead to understanding or flexibility or creative solutions to complicated problems. It is a place where judges must apply the law to the facts and declare winners and losers.

Judges should not be selecting “good” or “top” candidates for mediation. Neither should they be eliminating 90% of the homeowners in foreclosure from easy access to mediation. If it becomes clear to the homeowner and the lender in the course of mediation that the homeowner has “no real hope of keeping their home”, that conclusion can initially be left to the homeowner and the lender. And certainly the random selection of one judge or another should not provide homeowners or lenders with different procedures. The Florida Supreme Court task force is saying that there should be a carefully crafted mediation program that:

1. identifies generally the issues that are common to most foreclosure actions

2. makes access to the program easy (read no or very low cost to the homeowner)

3. provides the public with a clear idea of what kinds of potential outcomes may be available to them in mediation

4. provides clear instructions on what kind of documentation their lender will need and where they can get the data if they do not have it

5.  provides a convenient location for a 3 hour mediation session with a trained mediator whose only responsibility is to help both sides have a successful negotiation that results in an outcome that makes sense to them.

6. assures that the mediation is confidential and that participation is voluntary

7. provides an efficient, timely system that tracks outcomes, trains and provides a high caliber cadre of mediators and maintains the integrity of the program

There are no guarantees of saving someone’s home in any single case and the court room remains as a place to have the foreclosure resolved.  There seems to be widespread agreement among the judges of this circuit that mortgage foreclosures pose a process problem for the judicial system and a huge source of disruption and hardship to the citizens that they serve. This is not the time to reinvent the wheel or engage in wait and see delays. The Collins Center model provides a workable alternative to “foreclosure as usual” and it should be adopted by the 6th Judicial Circuit without further delay.

FORECLOSURE MEDIATION TIPS

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The biggest challenge facing homeowners who participate in one of the many foreclosure mediation programs going on around the country is to align their needs and expectations with the possibilities and opportunities that are available from lenders and the government.

Keep these things in mind:

  • Lenders have a short list of options that they can offer borrowers. In many instances, this is largely the result of the extraordinary legal complexities created by the practice of bundling mortgages (sometimes 1,000’s in a bundle) and selling a piece of that bundle as a security to investors. In these cases, the lending institution no longer owns your mortgage; instead, it is acting as an agent for the actual owners, the investors, and is bound to represent their interests and follow their directions.
  • In most of the remaining cases, your lender still owns your mortgage and is dealing with its (shareholder’s) money.
  • There are “programs” available to borrowers facing foreclosure. Because of the massive number of foreclosures, the lenders and the government have gone to great lengths to create a series of programs which, taken together, serve the greatest number of borrowers with the smallest amount of case by case discretion or variation. In other words, if your situation (read your financial data) meets the pre-determined criteria for assistance, you get help. If not, no help.
  • Preparation for your mortgage foreclosure mediation is critical!!! Lenders and the government have created systems to evaluate certain data and they rely on the results of these evaluations to determine whether you qualify for their programs. Lenders have also been given the task of evaluating your eligibility for most government assistance programs. Because of the vast imbalance of power that exists in most foreclosure cases, it serves the borrower’s interests to be thorough and forthcoming with all of the information called for. Cooperation and diligence unquestionably enhances the chances of a successful outcome; failing to cooperate guarantees a bad result.
  • Finally, keep this in mind: emotions are central to human affairs. The mediation is a unique opportunity to animate your efforts to avoid loosing your home to foreclosure. Participate in the mediation so that the lender’s representative gets a sense of who you are, beyond the forms and bank statements and W-2’s. You won’t find this in the rule book but it is important, nevertheless.

WORKPLACE MEDIATION

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Workplace Mediation for Businesses – Including Family Businesses and Closely Held Corporations

The most important alternative in Alternative Dispute Resolution is mediation. It is an alternative to a lawsuit and lawyers, two things that most small, medium and family business owners are eager to avoid. While their business plans provide for a host of unwelcome contingencies, many are silent when it comes to resolving workplace conflict among the owners, between management and employees and between employees.

There are an increasing number of large, public corporations that have adopted workplace mediation as a way of managing conflict within the organization. These workplace mediation programs work and can be used regardless of the size or structure of the organization. The availability of workplace mediation encourages the prompt airing of conflicts. The parties can rely on a mediator’s neutrality and commitment to being unconditionally helpful. The outcomes that mediators help to develop require buy-in by all sides of the dispute and, therefore, tend to be practical and durable. Workplace mediation allows for confidentiality, especially important in this fiercely competitive business environment. Workplace mediation is flexible and encourages outside-of-the-box thinking. Workplace mediation is also a very efficient way to resolve disputes, particularly when measured against the cost, uncertainty and lack of control inherent in litigation.

If you are interested in discussing the ways in which your organization can take advantage of workplace mediation, please get in touch with me – 727-822-0357 – TOLL FREE – 800-381-8599 – or emailbenson@bensonmediation.com

KEEP YOUR MEDIATOR NEUTRAL

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Mediators are expected to be neutral. The Supreme Court of Florida requires mediators that it “certifies” to commit to being neutral. The consumers of mediation services are led to believe that mediators are neutral. The conventional mediation training program stresses the importance of neutrality and includes some role-plays designed to allow students to confront challenges to their neutrality. And yet, mediator neutrality remains one of the field’s most vexing problems.

From my point of view, the training curriculum for mediators continues to fail to effectively teach how to be an effective and neutral mediator.

Here are some suggestions for improving the existing program.

  • Enlarge the context in which mediation is taught. From the top down, mediation is conceived as a subset of the legal system.  In fact, the large tent is conflict resolution and in it reside mediation, arbitration, grievance systems, law suits, tribal courts, ecclesiastical courts, rabbinic courts, one-on-one negotiation, war, etc.  I am convinced that the skills required to effectively assist other persons to resolve their conflicts derive from a variety of other disciplines, not just the law. And yet the pedagogy overwhelmingly refers to litigation as the one essential reference point needed to understand conflict.
  • Simplify the role plays. Rather than mediate with a complete cast of characters (plaintiff, defendant, lawyers, claims representative, etc.) have students spend time developing interviewing skills. Students who come from a mental health background as well as lawyers are taught to interview clients. Their objectives are certainly different from those of a mediator, who is neither a healer nor an advocate. Create realistic opportunities to recognize and deal with the kinds of behaviors that mediators must confront and deal with if they are to be effective.
  • Introduce game theory, neuro-psychology, behavioral economics, psychology, and other topics that provide new insights into why, in the face of

stress and conflict, we behave in the ways that we do. I am not    suggesting a college survey course; instead, an extended segment in the mediation training program that presents material that is relevant to the topic of how we experience conflict and how we instinctively attempt to resolve it.

  • Develop methods to assess whether a student has mastered certain basic skills necessary to be a mediator. It is a step that will encourage public confidence in the efficacy of the mediator certification process. It is not a step that will keep people from being mediators but it will enhance the value of being a court certified mediator.

NEUTRAL INVESTIGATIONS OF WORKPLACE DISPUTES

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Disputes between employers and employees are a fact of life in the workplace. Another (unfortunate) fact of life is that these conflicts can grow into expensive and disruptive lawsuits. Buried in the DNA of virtually every lawsuit are overlooked, misunderstood or ignored opportunities to have resolved the problems before they morphed into litigation. Early, neutral investigations of workplace disputes can play an important part in a strategy to professionally manage employer/employee relations.

There are a number of simple steps to keep in mind when responding to such problems:

  • Begin the investigation as soon as the problem surfaces. There is no advantage to delay; workplace conflict has a strong tendency to get worse over time. Deal with it now, not later.
  • Have the investigation handled by an investigator who knows what they are doing. Here are some critical things to look for when you are evaluating candidates: an in-depth understanding of the law of the workplace and the alternatives to a negotiated settlement; the experience, skill and personality to quickly establish trust and confidence in the integrity of the investigation process; the insight to gather all of the facts necessary to develop a coherent, thorough and accurate assessment of the dispute; the expertise to provide recommendations for a practical, cost-effective and durable resolution.
  • Make clear to all of the stakeholders that the investigator is neutral and that his/her task is to listen and to be unconditionally helpful to the parties as they work to resolve their differences.

There are compelling reasons to use a neutral investigator with no ties to the employer. People are more likely to cooperate and offer candid information if they see the investigator as someone interested in the truth and without a hidden agenda or pre-conceived ideas. They also see a neutral investigator as an indication of the employer’s good faith commitment to conducting a legitimate investigation. Managers, supervisors, HR personnel and staff lawyers are often perceived as biased and may find it difficult to elicit candid, complete information from parties and witnesses.

I have had many years of experience investigating and evaluating employment related claims for private and public employers as well as closely held corporations and family businesses.  I have had almost 40 years of experience as a lawyer in the field of employment and labor law and I know, first hand, how claims tend to play out in the court room. I know what matters and what doesn’t.  I am able to establish rapport with people based on my professional background, my reputation for integrity and my commitment to neutrality. I can provide an accurate, reliable and thorough description of the dispute and practical, realistic recommendations for its resolution