Orange County Voices : COMMENTARY ON BANKRUPTCY : Mediation Is a Cost-Efficient, Timely Way to Avoid Litigation : Orange County officials should take advantage of a narrow window of opportunity to structure and initiate such talks.

Orange County is trying to work out of its bankruptcy and the lawyers are gathering their forces--financial advisers, accountants and auditors--anticipating years of litigation and hefty legal fees. A recent article in The Times reported that outside consultants, including attorneys, billed the county more than $4 million in December alone. Law firms accounted for $867,000 of that.

Despite the uncertainty associated with such an unprecedented governmental bankruptcy, one result is guaranteed--a big win for the lawyers.

The recriminations and finger-pointing are hot and heavy, as the lawyers feint and dodge in order to gain litigation advantages. A decade or more of enormously costly, time-consuming legal wrangling appears inevitable. Alexis de Tocqueville was right in 1840 when, visiting America, he commented that “sooner or later every major issue in America ends up in the courtroom.” The Orange County bankruptcy is proof-positive.

But it doesn’t have to be this way. Litigation is not inevitable.

Reacting to the flood of lawsuits inundating federal courts, the House of Representatives recently approved legislation aimed at throwing cold water on the filing of civil suits. Government officials in Orange County can jump on the bandwagon and seize an important opportunity by opting for a more efficient, expeditious way of resolving all bankruptcy-related issues through creative use of mediation.

Instead of hiring high-priced lawyers at $300 an hour, battening down the hatches for years of legal wrangling in the courtroom and clogging the dockets of California courts for the next decade, Orange County officials should take advantage of a narrow window of opportunity to structure a comprehensive voluntary, non-binding mediation to settle amicably all outstanding issues.

My experience as a mediator over the past decade in facilitating the resolution of complex, multi-party, public disputes confirms this. The Agent Orange class-action litigation dragged on for seven years before a court-endorsed mediation procedure resolved the case in six weeks. Following years of highly emotional legal wrangling pertaining to the closing of the Long Island Shoreham Nuclear Plant, a series of intensive mediation sessions resolved the dispute in two months. And, just a few weeks ago, following a comprehensive seven-week mediation, New York City ended 11 years of litigation with homeless advocates by reaching a voluntary settlement blessed by the court. Mayor Rudolph W. Giuliani and other city officials recognized that a mediated settlement of the dispute was preferable to continued litigation, which promoted uncertainty and was extremely costly.

The Orange County Board of Supervisors, in concert with new CEO William J. Popejoy, should similarly endorse the advantages of mediation over traditional war in the courtroom:

* Cost: Litigation is expensive. The anticipated Orange County bankruptcy litigation probably will break the bank as lawyers for the numerous interested parties, and their numerous financial advisers, run the meter in an attempt to gain every possible advantage. The total is anywhere from $12 million to $17 million. Mediation provides a cost-effective alternative, where all parties agree to set aside a specific period of time to resolve disagreements without resorting to courtroom drama and lawyer theatrics.

* Control of events: In a voluntary, non-binding mediation, the participating parties control the agenda, schedule and budget. They avoid the difficult problems associated with turning their destiny over to lawyers and judges.

* Emotional barriers to settlement: The longer the parties litigate, the more adversarial their posture and the more emotionally entrenched they become in the wisdom of their positions. Mediation affords all parties an opportunity to participate personally in a process designed to secure an efficient resolution of disputes before the lawyers take over and declare war.

* Avoiding the courtroom: Mediation permits the parties to reach a voluntary resolution of their disagreements without waiting for formal legal rulings from a court that often award a party a temporary advantage that shifts the bargaining power of the litigants. These rulings often prolong the dispute and make settlement more complex and difficult. Public court rulings also have a direct and immediate impact on another court--that of public opinion--that add to the difficulty in reaching a quick, efficient and private resolution of disputes. In my experience, the ability of the mediator to meet privately with the parties, away from the public glare of the courtroom spotlight, is critical in settling disputes that have been litigated for years.

In Orange County, the Board of Supervisors and CEO should develop a mediation process designed to address such issues as:

* The critically important question of who is at fault for the Orange County debacle. Instead of litigating the issues for years, the parties should agree to a mediation that will allocate fault and suggest appropriate remedies, including the payment of damages by those determined to be culpable.

* Which county governmental services must be eliminated or reduced? With full participation of all interested parties at the mediation table--school boards, water and sewer officials, bankers, bondholders, securities firms, county officials and creditors--a compelled reorganization of county services should be mutually agreed upon.

What about the issues associated with future governance? What should be the new management structure of Orange County government arising out of the bankruptcy? How should government be fashioned to prevent such disasters from repeating themselves, while assuring that the citizens of Orange County are the beneficiaries of the best government possible?

It would be an unfortunate, costly waste of Orange County resources and tax dollars for “business as usual” to prevail, culminating in the hiring of hordes of lawyers and guaranteeing an unprecedented legal morass. Mediation offers the parties a mutually beneficial alternative. If it fails, the parties can always turn to the more traditional avenue of court-supervised litigation. They have little to lose in the meantime, and potentially millions of dollars to gain.