Mediators must be aware of the different 'chemistry'
that distinguishes cases of contract, tort and property.
The American judicial system divides along legal lines paralleling our
social culture. Constitutional law, state law and federal law all affect
litigation, enforcing mutual promises executed between parties contract,
compensating victims of intentional and negligent conduct in tort and
prohibiting or limiting impermissible intrusions or use of personal and
real property.
Each of these categories involves a different mix of relationships between
the parties, a distinct social environment and, for the mediator, a unique
chemistry.
Contracts
Except for consumer contracts, breach of a negotiated commercial contract
occurs between parties who know each other or through agents who agreed
to a business relationship. Breach of a contractual promise, couched in
litigation language, imports more than mundane causes of action alleging
nonperformance of terms.
The purely "business" dimension of the relationship between
parties is damaged, in some cases beyond repair, severely compromised,
and breach also may impose hardship on third parties who depend on performance
of breaching party.
But the essence of breach is the moral issue in failing to keep a promise,
a loss of faith or trust.
The law attempts to ignore moral rationales under the guise of more
neutral words. A broken promise is labeled a "breach," and "damages"
is characterized as the secular equivalent of punishment. And by dividing
damages into categories, the law compels the jury to identify specific
losses rather than applying a variety of moral convictions among jurors.
The moral issue is not eliminated, merely replaced objectively.
However, recharacterizing the breach as a loss of "trust,"
a close rhetorical ally of "morality," might be more suitable.
A mediator who ignores the moral issue of "trust," at least
to some extent, may forfeit the opportunity for settlement in, those cases
where its appearance is recognized more easily. The world' of business
regularly attempts to solicit vendors, ventures and customers in whom
a contracting party has confidence. An entity embroiled in publicized
litigation may not qualify as a reliable source of "trust" regardless
of the merits of the underlying case, and mediation may offer an alternative
to trial.
Resolution of a contractual dispute in mediation may not eliminate damage
to business reputation entirely but surely avoids front-page press exposure
or a column in the business section reporting litigation.
On parallel level, business disputes causing a financial loss to plaintiffs
equates to fraud in their minds rather than nonperformance of a contract.
Anger at financial loss caused by another party approximates harm incurred
in personal injury.
To an entrepreneur, the importance of "business" and its damage
or loss is not as apparent as physical injury but can represent damage
equivalent to disfigurement. For many people, "work" is their
life, and business loss is disabling. The desire for punishment in addition
to compensation for loss is strong.
In this context, emotion transcends the mediation similar to tort, employment
and family law.
TORT
If contract includes breach of promise, tort incorporates breach of
duty. American courts have struggled to define "duty" for decades,
and appellate judges in California have attempted to establish bright
lines enabling juries to understand this word and its applicable scope.
In tort law, negligence presupposes an injury legally caused by an act
of one person who breaches a moral responsibility, that is, "duty,"
to avoid injury another person. Legal and moral duties parallel each other
in most cases but not exclusively. The moral duty to assist another injured
person does not equate with a legal duty, absent other circumstances.
Unlike contracts written between parties acquainted with each other,
torts frequently involve conduct between strangers. In contracts, despite
mutual disagreement, the parties may elect to maintain their business
relationships but strangers in tort usually are uninterested in any future
contact and seek resolution of an isolated event. In mediation, contract
and tort invest the parties with different goals and means of achievement.
Whether the parties intend to maintain a relationship, sever it or are
indifferent to it shapes the course of litigation and mediation alike.
In other categories, parties are strangers to each other, but secondary
interests are at stake. A plaintiff may seek vindication of personal reputation
in slander or libel litigation to remove the stigma of an allegedly defamatory
statement. Similarly for the defendant in product defect litigation, the
outcome of a trial to validate business reputation is as important as
personal reputation of parties in a contract dispute.
In contrast to contract litigation evidenced by nonperformance or failure
to properly perform an agreement causing a loss of "trust,"
negligently inflicted in engender remorse in the person whose conduct
inflicted pain and suffering on an otherwise-innocent person. But the
role of the injuring party may differ in mediation litigation.
If the injuring party is insured, a claims representative "stands
in" for the defendant during mediation. Lacking personal involvement,
the claims representative cannot act as an agent for the defendant to
express an apology or sympathize with the injured party who might conceivably
moderate financial demands in response to an expression of remorse. But
in trial, the defendant usually must testify and more likely will minimize
the injury or attempt to shift responsibility to the plaintiff.
In tort litigation against the governmental agencies, public anger dominates
the more conventional private world of civil litigations, and specific
legal and factual disputes between the parties are ignored or subordinated
in emotion. In civil rights litigation or agencies, regardless of merits
of the case, plaintiffs often focus on allegations of past injustice ostensibly
manifested in the present.
PROPERTY
In property disputes, the parties either may have maintained a relationship
with each other, contractual or personal, or are strangers as in some
species of tort. Landlord tenant disputes, initially based on contract
(lease), also may involve the right to continuing tenancy.
This "chemistry" differs substantially from arguments between
adjoining landowners disputing property lines, "view" lines,
easements or encroachments. Neighbors often attempt to validate their
right in futuro as superior to that of another and initiate litigation
to impose a perpetual reminder of the vindication if they are successful.
Frequently, the dominant theme in these disputes is the demand for a judicial
determination not only to validate a legal right but also to confirm personal
power.
In contrast, tenants in disputes with landlords fear eviction and loss
of housing, an economic issue unrelated to ego.
One common property dispute is a disappointed residential real estate
buyer's allegation that the seller has concealed a defect in the house.
Buyers either legitimately identify a defect in the property, are guilty
of "buyers' remorse" or attempt to extract leverage.
If mediation is unsuccessful, a mutually executed arbitration clause
in the contract mandates arbitration, providing "closure."
A sales transaction between a buyer and a seller of residential real
property is founded on contract, but the parties themselves may never
have met each other. Crafting a solution to resolve a single failed transaction
between residential buyer and seller of a residence unacquainted with
each other differs sharply from mediating a dispute between long-standing,
personal relationships among neighbors whose proximity to each other will
continue.
Purchase and sale of residential real property is a combination of contract
and property law, but a mediator cannot ignore the personal dimensions
of the transaction.
Transformation of the word "house" to "home" connotes
an emotional sea change. Failure of a buyer to acquire a "new home"
or inability of a seller to expend proceeds languishes in escrow engenders
strong feelings of resentment between parties unknown to each other, that
is "constructive acquaintances."
In this context "property" sheds its legal character and adds
a panoply of emotions similar to breach of "trust" in contract
or injury tort.
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