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Mediation and Arbitration as Alternatives to Litigation

May 22, 2023
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After a long career in litigation, Diane Sorenson is transitioning to arbitration and mediation, also known as alternative dispute resolution or ADR. She discusses the differences and similarities between litigation, arbitration, and mediation. For ADR, experience is paramount not only for getting cases to resolve but also figuring out how to actually resolve them. Diane is a graduate of the University of Kansas.

Transcript

Host:

From LawHub, this is I Am The Law, a podcast where we talk with lawyers about their jobs to shed light on how they fit into the larger legal ecosystem. In this episode, Kimber Russell interviews a litigator in transition. She's turning her attention to alternative dispute resolution, including mediation and arbitration.

Kimber Russell:

We're joined today by Diane Sorenson, a 1984 graduate of the University of Kansas School of Law and an employment litigator turning alternative dispute resolution specialist. Diane is a shareholder at Morris Lang in Wichita, Kansas, a small regional firm with lawyers who cover pretty much the whole spectrum of practice areas for their clients. For many of our listeners, the term alternative dispute resolution or ADR for short may be a bit new, although many are likely familiar with either mediation or arbitration. Diane, can you talk about these two areas of ADR and how they're different or similar?

Diane Sorenson:

ADR, alternative dispute resolution, is an umbrella term, which is just any alternative to resolving a case that's not the traditional filing a lawsuit and going through a courtroom proceeding with a judge. Mediation is a process where the parties come together, once there is litigation, and they use the help of a neutral mediator -- attorney mediator -- to help them reach a resolution of their own accord.

Kimber Russell:

What is the difference specifically between litigation and arbitration?

Diane Sorenson:

Arbitration is a shortened variety of litigation. Instead of a judge, you have an attorney arbitrator who acts as a judge in your case. It's a little mini trial. The case is presented just like if it was at trial, but the arbitrator makes the decision rather than the judge or a jury.

Kimber Russell:

With respect to arbitration, is there force of law behind it? So to what extent is arbitration versus mediation binding?

Diane Sorenson:

There are different companies that you can arbitrate through. I am an arbitrator for the American Arbitration Association, AAA. Parties, by contract, have agreed to arbitration before there is any dispute. So in the employment context, it comes up because you get hired by an employer who has a mandatory arbitration agreement. You sign that when you're initially hired. And then if you have a dispute with your employer later, maybe claiming wrongful discharge, you are bound to go through arbitration rather than to file a lawsuit. And it is binding. Courts can review arbitration decisions but very, very limited whether they will overturn that decision. There is no appeal process, and courts rarely overturn arbitration decisions.

Kimber Russell:

So with respect to mediation, how does that differ? If two parties come to an agreement, in what sense is that binding?

Diane Sorenson:

So the mediation: if a settlement is reached between the parties, it's contractual. And so, typically, at least what I do as a mediator, is I write down the main terms of the agreement. And everybody signs that and agrees to it and reviews it before they leave for the day. And then they turn that into a more formal settlement agreement. If somebody doesn't abide by the terms of the settlement agreement, then that is a separate lawsuit. They can be sued for breach of the settlement agreement. But the original case is dismissed after a settlement agreement is reached.

Kimber Russell:

What specifically are you doing to help get these parties to come to an agreement without impinging on your status as a neutral third party?

Diane Sorenson:

Just so your listeners understand, the typical litigation mediation is not everybody in one room together. It's the parties split into separate rooms. So the defense and their attorney is in one room by themselves and the plaintiff and their attorney is in another room, and the mediator goes back and forth, listening and talking to the parties and try to find common ground somewhere between the two usually very obstinate positions where a resolution can be reached. There are times in any mediation where the party that I'm with, say I'm on the defense side, where I'm playing devil's advocate pushing back on arguments that they are making to me. And they may think that I'm wearing more of a plaintiff's hat. And I, I always warn the parties before the mediation starts, that there will be times they may think that and that's just me doing my job to try to bring the parties together. Because whichever side of a case you're on, when there's litigation, you don't have a perfect case, no one does. There are problems, always, with either side. And so the mediator is not making any decisions regarding the case. In mediation, any settlement is voluntary by the parties. They have to decide that's what they want to do, they have to decide that they're okay with the terms of a settlement that can be reached, and that they're ready to dismiss their case.

Kimber Russell:

Because arbitration and mediation are different, can you tell us what are the different skill sets that you've cultivated between these two areas?

Diane Sorenson:

They are very different from each other. When I serve as an arbitrator, I am, like I said, acting in the role of a judge. I make decisions about what evidence I will allow in. I make decisions about on objections during testimony. And, ultimately, make the decision of the case based on the law based on the presentations made by the attorneys to me. You have to be very decisive about that. You're looking at the law, looking at the facts of the particular case and making a decision. That is 180 degrees from what what you do as a mediator. As a mediator, the main skill is probably listening to both sides in the lawsuit. As a mediator, I will offer my opinion. I have spent my career as an employment attorney. I've litigated employment cases, everything within employment law. And so I'm very familiar with employment law. And when I mediate an employment case, if I think it's going to help the settlement process to convey an opinion, such as I think you're really weak on this particular claim, I do not think you're going to make up past summary judgment of the case, it gets that far. So I would not bank on getting any money for this particular claim. And so if I think that is going to help bring the parties closer together, I will convey an opinion. But it's very, very different from making a decision about the case, as I do as an arbitrator. A lot of times having an objective person, the mediator, who I'm getting enough years of experience, they can tell I'm an experience lawyer. Listening to the plaintiff, really hearing their story, it goes a long way to helping that person be in a frame of mind where they may be able to give up their case and resolve it. People, every person from big company presidents to a worker who believes they were wrongfully discharged. Everybody wants to be listened to. And so that's a big role a mediator plays -- is really listening, asking good questions. Helping the person understand that you at least empathize and hear what they're saying, even if you don't agree with every legal position they're taking. And I think that another role as a mediator is to ask the right questions, point out the flaws in the legal thinking. Those are more of a discussion with the attorneys. Have you thought of this? Why didn't you file this claim? Did you realize there was this case law out there that might be detrimental to you? Those kinds of things. To help the attorney understand that their case is a perfect. I remember one time as a younger lawyer, I was representing a small company in the defense of a sexual harassment lawsuit. And it wasn't it a very good plaintiff's case. It really wasn't. But I told a mediator in that case that I was 100% Certain I would get summary judgment in the case. Well, guess what? I didn't. One of the claims in the case survive summary judgment. And I use that as an example all the time of: there's no 100% when it comes to litigation. Judges are moving parts. Absolutely, juries are moving parts. You just don't know how it will be resolved to the end. And mediation is a time where the parties can actually make their own decisions have control of their case, it's really the only time in litigation you can do that.

Kimber Russell:

So, I think our listeners are somewhat familiar with the concept of the mandatory arbitration clause, specifically with an employment contract. Can you tell us what the advantages are from the employers and the employees perspectives?

Diane Sorenson:

Typically, if there is a mandatory arbitration agreement that has to be signed, you can assume the employer feels that is to their advantage to have that agreement. I think there is a perception that arbitrators tend to be employer-favorable. I do not know if that is a valid perception or not. It may not be. I think employment cases, it's difficult to have a good one, despite what people read in the news about being verdicts. And a good case is few and far between on the employee side. So, probably most arbitrations do and in an employer victory. That would just be a way it is in lawsuits as well. But for the employee, there is the disadvantage of never having the appeal process, if they think it didn't come out the way they want. That's a disadvantage for both sides. They're stuck with it. But there is the advantage of, typically, it's faster than going through traditional litigation. If you file a federal court lawsuit, it's probably about two years from when you file the suit until you finally get to trial. People ask for continuances on different parts of the discovery. this and that happens in a trial setting. But with arbitration, we were trained that the goal is always to keep it from filing to resolution in under a year. So it's faster. And then your final. That's the decision. It's over.

Kimber Russell:

So in the intro, I said that you are turning into an alternative dispute resolution specialist. Can you talk to us about how your time day to day actually breaks down between ADR and litigation and why that distinction is?

Diane Sorenson:

In my opinion, and probably it's shared by most attorneys, before one can be a legitimately qualified arbitrator or mediator that lawyers, parties will really listen to me you need many years of experience. And so you will tend to find people who are more experienced, older, have been practicing for longer who turn in their career to start doing those alternative dispute resolutions, either arbitration or mediation or both. It's very common to do both. And I think it's just the the years of experience, more confidence in what you know, how cases play out. You can't just one day say, "well, I'm not going to practice traditional law anymore. And instead, I'm going to start mediating." Well, that would be insane, because it takes a long time to build up a mediation practice.

Kimber Russell:

Can you say a little more?

Diane Sorenson:

The best way to build a mediation practice is by word of mouth by getting going, getting a good reputation, settling cases, working well with the parties, all of that. And so that just takes time to start to build that kind of practice. And the same is true in arbitration. I went to training with the AAA in Miami, Florida. And you know, it was probably nine months after that training was completed before I was selected as someone's arbitrator in a case. So, you have to be patient and you can't to your partners and your law firm, you can't just turn up the billable hour practice. So I'm in that in between stage where I am still practicing law.

Kimber Russell:

You explained to us how much training goes into becoming both a mediator and an arbitrator. So I assume that you must be a licensed attorney in order to do either one of these roles?

Diane Sorenson:

There are mediators who are not attorneys. Family law mediators may not be attorneys, where there issues with custody and they may be coming more from its social work standpoint, things like that. In criminal things, there are sometimes mediators who could not be attorneys -- more, you know, that kind of neighborhood mediation kind of thing can happen. But typically with litigation, with the privately hired mediators, those will be attorney mediators. To be an attorney mediator, of course, you need to have been a licensed attorney. You wouldn't have to keep up your license. There are people say, a retired judge, who will mediate cases and is inactive in terms of keeping up their license. That would be attypical, I think, to be an arbitrator and apply the law without being an attorney. I would not want to not be an attorney to do any of these things.

Kimber Russell:

Before you sit down between the parties, even if only metaphorically, what are you doing to prepare?

Diane Sorenson:

Arbitrations are interesting, because they don't take much of my time until the case is ready for a hearing. And then it's intense time because you you hear the evidence, hear the testimony, and go back to your office and do your legal research and make a decision. So that takes a chunk of time. But before that, they may have discovery disputes, they may have a motion to get certain claims kicked out before the hearing. And so there's a little time. But typically, they just go off and they do their own thing. And then when it's time for the hearing, we have that. That's where I get involved. So for the mediation, the before is I ask the parties, as most mediators do, to provide me their submissions. And I ask for certain things. I ask for them to tell me about the case, to assess their best parts of their case or worst parts of their case. I ask them to tell me what prior settlement discussions there have been. To explain, if they're on the plaintiff side, what damages they're claiming. And to give me any valuable, demonstrative exhibits, anything like that. I don't want to look at the whole case file. But I want to really be conversant in the case. I can call up one of the attorneys and say, "Hey, can you explain more to me about x?" And I want to know that in advance of the mediation,

Kimber Russell:

Let's talk about what happens after that. What role if any, do you play following either a mediation or an arbitration?

Diane Sorenson:

So following the mediation, there should be nothing for me to do that. It's over. You do your intense prep work, you have the intense day. I typically never take a break during the day of mediation, don't eat lunch, just keep going. And it's exhausting. But you're done at the end of it unless something falls apart in the settlement and you would have to appear as a witness to talk about the Settlement Agreement, which I have never had that happen. With arbitration, my job after it's over is to make a decision, a written decision, that would be a lot like a judge's opinion where I summarize the facts and say what the law is that applies to these facts and make a decision. And so the work, the real work is after the hearing in an arbitration.

Kimber Russell:

Now, after you have done an arbitration or mediation, how do you determine how you did? How do you know if you did a good job?

Diane Sorenson:

Yeah, we all want to know that, don't we? Anything we do, I think that's very, very human. A lot of times, I have found with mediations, there is a lot of relief if the case has resolved by the end of the day. And I've gotten many, many hugs, not during COVID times, of course, but pre-COVID. You know, lawyers will tell you that they liked how you mediated or they will hire you for another mediation, which is I guess the biggest compliment. Arbitration, you know, it's interesting, you don't ever hear anything. You issue your decision. And a lot of the arbitrations that I have been assigned to aren't local Wichita attorneys, their attorneys from Kansas City, or I have one now the turns are in Denver. You never hear anything, you don't know. But you have to just assume you did the best you can and make sure you're proud of your own decision before you issue it.

Kimber Russell:

Well, the one question I'm sure some of my listeners are very interested to know about is what's the money like?

Diane Sorenson:

mediators can handle that differently. Some do a set fee for the entire mediation. I do it by the hour. And then the bill is typically split between the two sides. And so we send out a bill. Arbitration, it's also hourly. At the beginning of the case, I have to give the American Arbitration Association an estimate what I believe the case is going to cost altogether in terms of my time. I send my bills to the American Arbitration Association, and they send that out to the parties, whichever one is paying, usually the defense side.

Kimber Russell:

I kind of want to look back on the ways that you have actually seen the practice of law change. What have you seen change over the time that you've been practicing?

Diane Sorenson:

Wow, that is a big question. I graduated ours in 1984. from University of Kansas law school, and I did four years of clerking for judges. I clerked for a year and a half for the Chief Justice of the Kansas Supreme Court. And then I clerked for two and a half years for a federal trial judge in Wichita. That judge that I worked for, he was one of the early believers in mediation. He called them settlement conferences. And he had the idea of having a group of attorneys, experienced attorneys, in Wichita be his mediators. And he would send cases to mediation. That was when I saw firsthand how well it worked. And it was not common then. It was a very new concept. So I have seen that in my career go from a new idea -- and it was starting around the country, it wasn't, you know, started in Kansas but here and there, it wasn't all over the country. And it is now

Kimber Russell:

And how have client expectations changed in that time?

Diane Sorenson:

It's the expectation of immediate answers. We all have our smartphones, we have our emails on our smartphones, clients have learned to expect that you're connected all the time. If they ask you a question at, you know, 8pm at night that you'll get right on it. That's different, you know. We used to send a letter and then that letter would take a day or two to get to where it was going and then you'd get a response a day or two later. Things have very much sped up. And it's true not just in law, but in everything. And I love mediating. I love practicing law. Being an arbitrator. All of it is a lot of fun. Maybe I have a broad definition of fun, but I I enjoy it all a lot. And hopefully it sounds interesting to people who are listening.

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