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July 2024

Welcome

Welcome to readers of Making the Connection!

In this issue, you will find:

In Focus: Reality Testing in Mediatoin
Question of the Month, answering a question about dealing with delinquent customers
Case on Point, on protecting impartiality in the judicial setting
At the Podium, listing my speaking engagements and public appearances
Client Corner, spotlighting client events and announcements

In Focus

Reality Testing in Mediation

Often, when parties (and their counsel) come to the table in mediation, they are firmly convinced of the rightness of their positions and the certainty of prevailing in the event the case proceeds to or continues in litigation or arbitration. This may present an obstacle to engaging in meaningful negotiations. Often, though, the outcome is truly in doubt due to contract wording ambiguities, unforeseen events, or failure of the parties to amend their contract as the business transaction may evolve or morph. However, due to confirmation bias, the parties may only recognize or credit the facts that are consistent with their narrative, and reactive devaluation may cause them to discount any contrary information or arguments presented by their adversary.

Thus, the mediator's first job may be to dislodge the parties' conviction in the correctness of their understanding of the situation. The parties may be open to hearing information that is contrary to their convictions when elicited or suggested by a neutral party rather than the adversary. Once the mediator has engaged in some "reality testing", the parties may appreciate there is some risk in pursuing adjudication and may be willing to shift into interest-based negotiations.

Question of the Month

Q:How should a vendor or service provider deal with a customer that is behind in paying for goods or services?

A: Sometimes companies are reluctant to take action against customers who fail to pay promptly for fear of losing business. But incurring costs of providing goods or services without getting paid for them just increases losses and diverts attention and resources from other more profitable customers or prospects. If a customer fails to pay promptly, it is reasonable to require them to pay or reach a mutually acceptable payment plan before continuing or resuming doing business, or to provide a personal guaranty or other collateral to ensure payment. Finally, it is also a good idea to ensure contract terms encourage prompt payment, by providing for late fees and permitting the recovery of collection and attorneys fees.

Case On Point

Litovich v. Bank of America Corp.

(U.S. Ct. of App. for the 2d Cir. 2024)

Last month's Making the Connection featured an article discussing precautions implemented in the arbitration context to ensure arbitrator neutrality. Similar concerns exist in the judicial setting, but no such proactive measures are employed to ensure neutrality. As a result, disqualifying conflicts of interest may not be discovered until later in the proceedings.

This was the case in Litovich v. Bank of America Corp. The presiding judge's wife owned stock in one of the parties, but divested it before the judge issued his decision on a motion to dismiss. Under federal law, such a financial interest is grounds for disqualification, and the Court of Appeals rejected the argument that divestment was sufficient to negate the appearance of partiality. The Court held that vacating the decision was necessary to:

ensure fairness to the parties in this case;

send a message that conflicts in interest would not be tolerated in the future; and

ensure public confidence in the judiciiary.

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At the Podium

This is a listing of speaking engagements, workshops, events and other public appearances. To book me as a speaker or facilitator at your next company, client or association function, contact me at lisa@lisapom.com.

On November 11, 2024, I will speak on Managing and Resolving Conflict in Healthcare Worplaces at the 2024 Annual Conference of the Association for Conflict Resolution in Omaha, Nebraska.

Client Corner

Client Corner features client announcements and events of potential interest to readers.

On July 11, 2024, Moxxie Network will have a Midday with Moxxie networking luncheon at Carpaccio Restaurant in the Walt Whitman Mall in Huntington, NY. Click here for information and registration.
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Congratulations to Theresa Jacobellis who was reelected as President of Public Relations Professionals of Long Island.

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