JAMES CAPRETZ, Attorney, Capretz & Kasdan
In the budget-conscious 1990s, businesses are looking for ways to trim their litigation costs and avoid embarrassing courtroom battles. Many will seek arbitration by a third party, often a retired judge, who hears a case outside the courtroom and makes a decision. But attorney James Capretz says that mediation--in which a neutral mediator helps two sides reach common ground before a suit is filed--usually leaves parties more satisfied. Capretz recently helped establish ProMediate. He talked to free-lance reporter Ted Johnson.
What types of companies are opting for mediation to resolve disputes?
Many large corporations are signing transactions that incorporate alternate dispute resolution procedures. For example, Bank of America here in California. Many insurance companies are incorporating this language. Sometimes in a contract they say what company or service will be used, or what the rules will be. Other times, it’s a question of someone requesting mediation either before or after the filing of a lawsuit.
In arbitration, a neutral third party--often a retired judge--is selected to hear testimony and then render a judgment. In mediation, that person tries to reach a compromise acceptable to both sides. Are more businesses going to be looking to mediation to resolve disputes in the 1990s?
We have little question that many more businesses in the ‘90s will be resolving their disputes through mediation. One of the reasons is that it is less costly. . . . Another is that it allows for more creative decisions. And it takes less time. Today, people are very cost conscious. Typically, people who use mediation are more likely to get better results in a shorter period of time. This is something we need to do, particularly in light of the economy and the competitive environment.
How much time does it take to set up a mediation meeting?
Anywhere from three to six weeks. If the parties are in a hurry or there is a need to do it in a shorter-term basis, that could be done. And one of the assets of mediation is that it takes some of the adversarial sting out of the dispute. Disputes are natural parts of human living but whether or not those disputes have to be handled in an adversarial manner is a totally separate question. Too often businesses wind up in an adversarial proceeding in court.
What qualifications does a mediator have?
Right now, professionals who are involved in mediation include lawyers and non-lawyers. Many very effective mediators are non-lawyers. We look for people who are very competent in their fields, professional, reputable, even-tempered and good negotiators. . . . A mediator can say, “Hey, this is what you need” because one of the basic things a mediator does is listen to the needs of the parties. If they listen to the needs as opposed to the demands or the requests, they can tailor a solution that no judge or arbitrator is empowered to do.
What types of commercial disputes are most likely to be mediated?
Mediation has been used mostly in labor and construction disputes. But today we see mediation used in all types of civil commercial cases. The type of case that is most likely to lend itself to a successful resolution by this means would be a complex civil transaction.
What happens if the dispute is seemingly settled and one party breaks the agreement?
After the parties get together with the mediator, they discuss the issues and they make their case. Then there are separate caucuses between the mediator and the different parties. Assuming a mediator is able to (come to) a resolution, they will enter into an agreement. It is a binding contract. If one breaches that agreement, then the other (party) is in the position to go into court and say, “We reached a negotiated resolution of our differences; we entered into a contract; he breached the contract.” The beauty of mediation is that a small number of agreements are broken. The rate (of agreements that are carried out) is close to 96% to 98%. In disputes that are litigated, (the rate) might be 90% because the parties might appeal or one party might go bankrupt, or other things might happen.
Robert Raven, the former president of the American Bar Assn., once said that he feared that a form of resolving disputes--so called “rent a judge”--would only be available to those who could afford it. Will it?
The argument is that while it is fine if people can afford to have someone hear their case in a private environment, people (who) can’t afford to pay will have to go to the public courts. The public system is underfunded. . . . But the counter arguments (are that) it frees up the courtroom facilities and allows more people to have access to justice. It may be a major problem if it were more significant, but (private judging) is a very small percentage of alternative dispute resolution.
Has there been opposition to this among some Orange County attorneys?
There has. Many litigators resisted, for a long time, alternative dispute resolution because it might mean less business for them. I think that’s a bit shortsighted. . . . Lawyers are geared to be problem solvers, not just advocates for causes. And although our training and culture is such that we have a winner, that doesn’t necessarily have to be the way that disputes are resolved. A client that is satisfied is likely to come back and to talk to others about how effective (the process was). We think it will be helpful in building the practices of various lawyers.
Can you foresee all law firms using mediation?
We are in the process of a major change, an evolution in the delivery of legal services. Lawyers are going to have to be aware of alternative dispute resolution and how to use it. . . . We believe, ethically and otherwise, (that) a good lawyer is going to know the alternative dispute-resolution techniques and suggest the options to their clients. It might save them a lot of time and money and lead to a favorable outcome.
On overcoming the urge to win a case. . .
Many times people are concerned about the ‘wimp factor.’ That is, ‘Gee, if I’m willing to resolve my case outside of a Rambo-type solution in the courts, is it because I have a weak case?’ . . . But (with mediation) there is very little to be lost.
On the reputation of lawyers. . .
The perception is that lawyers are not problem-solvers, that they add to an already existing volatile situation. We need to get over that perception.
On what it takes to be a mediator. . .
A good, effective mediator has to be somewhat self-effacing. They don’t try to impose their will or their opinion on the parties. They attempt to have the parties see where they have grounds of common interest.
On litigation. . .
It’s like surgery. It’s needed and it can provide for some great results, but if it doesn’t work, it can be very harmful or disastrous.
