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September 06, 2019

Appellate Mediation: Why is it so Hard to Settle During an Appeal?

By Steve Emmert

Scarecrow:  I'm not afraid of a witch.  I'm not afraid of anything - except a lighted match.

Dorothy:  I don't blame you for that.

We're appellate lawyers.  What are we afraid of?  Professionally, there are only two threats to us.  The first is the possibility that trial judges might stop making mistakes, rendering appeals pointless.  Happily or unhappily - depending on your point of view - that possibility is remote.

The second threat is far more real:  the rapid rise of mediated resolutions of litigation.  After all, if the litigants settle the case in the trial court, no one appeals.  And that can't be good for our business.

Eventually, though, some lawsuits will stagger through the trial system, all the way to judgment, stubbornly resisting the lure of peaceful resolution.  These cases are the raw materials of our legal careers, assuming that the losing parties resent the loss enough to justify hiring appellate counsel.

But the opportunity to resolve the case doesn't vanish once you cross the appellate threshold.  All federal courts of appeals and most state appellate courts now have mediation programs in place.  Even after the trial court enters judgment, the parties are free to talk, to find common ground, and to fashion creative solutions that no court could impose.

A disappointing success rate

Despite this, the "closure rate" of appellate mediations lags seriously behind that of pretrial mediations.  A well-trained mediator can settle more than 75% of pretrial disputes, and the very best have closure rates approaching 95%.  The average success rate for appellate mediations is probably around 50%, and far lower in some jurisdictions.  Why the difference?

A few factors contribute to this disparity.  One is a form of self-selection:  Those cases most readily amenable to settlement often settle early.  This means that the cases that go to judgment "are the most difficult, most intractable and least likely to resolve short of a definitive adjudication at the highest level."

A party's vision is sometimes clouded by confirmation bias, the problematic conviction that you're right, and filtering all information through this misleading lens.  Confirmation bias generally works in three ways:

  1. The subject strongly credits information that supports a preconceived, positive view, accepting that information without even minimal skepticism.
  2. The subject distrusts or rejects information that conflicts with those preconceived notions, even without an objective basis to do so.
  3. If information is ambiguous, the subject views it as supporting the preconceived view, and thus as "favorable."
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    While confirmation bias is the subject of extensive discussion in the modern psychological community, the concept is quite old.  "Men willingly believe what they wish to believe."

    The confident appellant

    Far too many appellants come into the civil-justice system convinced that they're unquestionably right.  Their lawyers' briefs, designed to advance forcefully the client's position, reinforce this bias.  When things go badly at trial, the biased mind interprets this as a sign that the trial court must be mistaken.  And then the lawyer prepares an appellate brief, explaining why that court was patently wrong.

    Is it any wonder that such an appellant will be unwilling to accept the possibility that he's wrong?  These clients have fallen in love with their lawyer's pleadings.  To be fair, the lawyers often do the same thing, resulting in even more confirmation:  advice to the client that the appellate court will right this wrong.

    The appellee's blind spot

    The same process occurs across the litigation aisle.  An appellee has received highly persuasive data to support the view that she's right:  The jury has ruled that the Bad Guy owes her millions of dollars, and the nice trial judge said that that ruling was correct.

    In this posture, many appellees will righteously muse, Why should I take a haircut on this judgment?  I won!  The winning lawyer may be unable to convince a victorious client that, yes, litigation risk does carry over to the appellate courts.  Those lawyers with contingent-fee arrangements may be unwilling even to try to dampen the client's expectations, succumbing to their own biases.

    Getting the horse to drink

    What's an appellate mediator to do?  And how can appellate counsel get through to an angry appellant, or to an appellee smitten with dollar signs?

    A mediator in this bind has to persuade the parties to think unconventionally.  That calls for an appellate approach that differs from pretrial mediation.  In a recent book, two elite appellate mediators propose a structured process to open these closed minds. 

    Instead of the traditional approach - limited premediation statements, followed by a joint session, and then shuttle diplomacy between caucuses - the authors recommend five strictly discrete segments after the premediation exchange of information.  They describe those five phases as opening the appellate mediation, exchanging information, defining the problem and organizing the issues, developing and negotiating solutions, and concluding the mediation (including follow-up as necessary).  There's a full chapter on each phase, highlighting the challenges and opportunities in each.  The book closes with an appendix that includes, among other things, the authors' favorite books, articles, and Internet resources.

    Already-successful mediators might bristle at the suggestion to try a radical new approach.  They might, that is, until they realize that their closure rate in appellate cases drags down their own overall success rate, of which they're justifiably proud.  The wise among them will realize that improving results requires a new paradigm.

    A different approach to advocacy, too

    For the lawyer, the immediate task is usually to explain the facts of appellate life to the client.  The best way to do that is usually to reintroduce the factor that drives most mediated settlements before trial:  uncertainty.  Before a jury speaks, most trial-court litigants understand that once the door closes and deliberations begin, any kind of result, good or bad, could emerge.

    Appellate counsel know what appellants do not:  Most appeals do not reverse the outcome at trial.  They also know what gleeful appellees do not:  The reversal rate is not zero, and a "too good" win might draw appellate scrutiny.  These hard truths can shake the confidence of a client with unrealistic expectations, cracking the door for an experienced appellate mediator to enter.

    Step 1 in the appellate lawyer's preparation, then, is to know the reversal rate in your appellate court.  If, as is common, there's a sharp distinction between civil and criminal appeals, be sure to filter the results to mirror your case.  If you have detailed statistics based on things like case type (products liability; business tort; contract) or posture (court-approved jury verdict; summary judgment), so much the better.  Show your client these statistics to give her a better sense of how similar parties have fared on appeal.

    Second, identify ways in which the parties might fashion a creative, mutually beneficial resolution to the dispute.  Then explain to the client that the appellate court can't impose such a solution upon the parties.  Only the parties, acting collaboratively, can do so.  This can help convince a reluctant client to give the process a try.

    Third, find a quality mediator with appellate experience.  This can be a retired appellate jurist or a mediator who has received specific training in mediating appealed cases.  Using a retired trial judge can be a mistake unless he's received that training, because those jurists tend to regard every dispute through a trial-court lens.  That leads them to undervalue or even ignore something as crucial as the standard of review.  Just as appellate advocacy requires a different way of thinking than trial practice, the mediator's approach needs to change once the litigation enters the appellate realm.

    In the end, the biggest challenge for the lawyer will often be convincing the client to agree to try the process.  For the reasons noted near the beginning of this article - primarily confirmation bias and excessive confidence - many clients will prefer to arm themselves for an appellate battle that they just know they'll win.  This is especially true for parties who have tried pretrial mediation, and failed.

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    Steve Emmert

    Steve Emmert is a partner at the Virginia Beach firm Sykes, Bourdon, Ahern & Levy, where he focuses exclusively on appellate practice, primarily in the Supreme Court of Virginia. He is a Phi Beta Kappa graduate of Richmond College and received his law degree from the University of Virginia. He founded the Virginia Bar Association’s Appellate Practice Section, and currently serves on the CAL Executive Board. He is married to former operatic contralto Sondra Gelb; they have one slightly spoiled daughter, Caroline.