financial 6/15/2017 mediation services...financial services mediation answer book 2017 viii...

FINANCIAL SERVICES

MEDIATIONANSWER BOOK

2017 Edition

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PLI's Complete Treatise Library (6x9 page size).fm Page i Monday, May 1, 2017 10:37 AM

PLI’S COMPLETE LIBRARY OF TREATISE TITLES

ART LAWArt Law: The Guide for Collectors, Investors, Dealers & Artists

BANKING & COMMERCIAL LAWAsset-Based Lending: A Practical Guide to Secured FinancingDocumenting Secured Transactions: Effective Drafting and LitigationEquipment Leasing–Leveraged LeasingHillman on Commercial Loan DocumentationMaritime Law Answer Book

BANKRUPTCY LAWBankruptcy DeskbookPersonal Bankruptcy Answer Book

BUSINESS, CORPORATE & SECURITIES LAWAccountants’ LiabilityAnti-Money Laundering: A Practical Guide to Law and ComplianceAntitrust Law Answer BookBroker-Dealer RegulationConducting Due Diligence in a Securities OfferingConsumer Financial Services Answer BookCorporate Compliance Answer BookCorporate Legal Departments: Practicing Law in a CorporationCorporate Political Activities DeskbookCorporate Whistleblowing in the Sarbanes-Oxley/Dodd-Frank EraCovered Bonds HandbookCybersecurity: A Practical Guide to the Law of Cyber RiskDerivatives Deskbook: Close-Out Netting, Risk Mitigation, LitigationDeskbook on Internal Investigations, Corporate Compliance, and White Collar IssuesDirectors’ and Officers’ Liability: Current Law, Recent Developments, Emerging IssuesDoing Business Under the Foreign Corrupt Practices ActEPA Compliance and Enforcement Answer BookExempt and Hybrid Securities OfferingsFashion Law and Business: Brands & RetailersFinancial Institutions Answer Book: Law, Governance, ComplianceFinancial Product Fundamentals: Law, Business, ComplianceFinancial Services Regulation DeskbookFinancially Distressed Companies Answer BookGlobal Business Fraud and the Law: Preventing and Remedying Fraud and CorruptionHedge Fund RegulationInitial Public Offerings: A Practical Guide to Going PublicInsider Trading Law and Compliance Answer BookInsurance and Investment Management M&A DeskbookInternational Corporate Practice: A Practitioner’s Guide to Global SuccessInvestment Adviser Regulation: A Step-by-Step Guide to Compliance and the LawLife at the Center: Reflections on Fifty Years of Securities RegulationMergers, Acquisitions and Tender Offers: Law and StrategiesMutual Funds and Exchange Traded Funds RegulationOutsourcing: A Practical Guide to Law and BusinessPrivacy Law Answer BookPrivate Equity Funds: Formation and OperationProskauer on Privacy: A Guide to Privacy and Data Security Law in the Information AgePublic Company Deskbook: Complying with Federal Governance & Disclosure

RequirementsSEC Compliance and Enforcement Answer BookSecurities Investigations: Internal, Civil and Criminal

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Securities Law and Practice HandbookThe Securities Law of Public FinanceSecurities Litigation: A Practitioner’s GuideSocial Media and the LawSoderquist on Corporate Law and PracticeSovereign Wealth Funds: A Legal, Tax and Economic PerspectiveA Starter Guide to Doing Business in the United StatesTechnology Transactions: A Practical Guide to Drafting and Negotiating Commercial
AgreementsVariable Annuities and Variable Life Insurance Regulation

COMMUNICATIONS LAWAdvertising and Commercial Speech: A First Amendment GuideSack on Defamation: Libel, Slander, and Related ProblemsTelecommunications Law Answer Book

EMPLOYMENT LAWEmployment Law YearbookERISA Benefits Litigation Answer BookLabor Management Law Answer Book

ESTATE PLANNING AND ELDER LAWBlattmachr on Income Taxation of Estates and TrustsEstate Planning & Chapter 14: Understanding the Special Valuation RulesInternational Tax & Estate Planning: A Practical Guide for Multinational InvestorsManning on Estate PlanningNew York Elder LawStocker on Drawing Wills and Trusts

HEALTH LAWFDA Deskbook: A Compliance and Enforcement GuideHealth Care Litigation and Risk Management Answer BookHealth Care Mergers and Acquisitions Answer BookMedical Devices Law and Regulation Answer BookPharmaceutical Compliance and Enforcement Answer Book

IMMIGRATION LAWFragomen on Immigration Fundamentals: A Guide to Law and Practice

INSURANCE LAWBusiness Liability Insurance Answer BookInsurance Regulation Answer BookReinsurance Law

INTELLECTUAL PROPERTY LAWCopyright Law: A Practitioner’s GuideFaber on Mechanics of Patent Claim DraftingFederal Circuit Yearbook: Patent Law Developments in the Federal CircuitHow to Write a Patent ApplicationIntellectual Property Law Answer BookKane on Trademark Law: A Practitioner’s GuideLikelihood of Confusion in Trademark LawPatent Claim Construction and Markman HearingsPatent Law: A Practitioner’s GuidePatent Licensing and Selling: Strategy, Negotiation, FormsPatent LitigationPharmaceutical and Biotech Patent LawPost-Grant Proceedings Before the Patent Trial and Appeal BoardSubstantial Similarity in Copyright LawTrade Secrets: A Practitioner’s Guide

PLI's Complete Treatise Library (6x9 page size).fm Page iii Monday, May 1, 2017 10:37 AM

LITIGATIONAmerican Arbitration: Principles and PracticeClass Actions and Mass Torts Answer BookElectronic Discovery DeskbookEssential Trial Evidence: Brought to Life by Famous Trials, Films, and FictionExpert Witness Answer BookEvidence in Negligence CasesFederal Bail and Detention HandbookHow to Handle an AppealMedical Malpractice: Discovery and TrialProduct Liability Litigation: Current Law, Strategies and Best PracticesSinclair on Federal Civil PracticeTrial Handbook

REAL ESTATE LAWCommercial Ground LeasesFriedman on Contracts and Conveyances of Real PropertyFriedman on LeasesHoltzschue on Real Estate Contracts and Closings: A Step-by-Step Guide to Buying and

Selling Real EstateNet Leases and Sale-Leasebacks

TAX LAWThe Circular 230 Deskbook: Related Penalties, Reportable Transactions, Working FormsThe Corporate Tax Practice Series: Strategies for Acquisitions, Dispositions, Spin-Offs,

Joint Ventures, Financings, Reorganizations & RestructuringsForeign Account Tax Compliance Act Answer BookInternal Revenue Service Practice and Procedure DeskbookInternational Tax & Estate Planning: A Practical Guide for Multinational InvestorsInternational Tax Controversies: A Practical GuideInternational Trade Law Answer Book: U.S. Customs Laws and RegulationsLanger on Practical International Tax PlanningThe Partnership Tax Practice Series: Planning for Domestic and Foreign Partnerships,

LLCs, Joint Ventures & Other Strategic Alliances Private Clients Legal & Tax Planning Answer BookTransfer Pricing Answer Book

GENERAL PRACTICE PAPERBACKSAnatomy of a Mediation: A Dealmaker’s Distinctive Approach to Resolving Dollar

Disputes and Other Commercial ConflictsAttorney-Client Privilege Answer BookDrafting for Corporate Finance: Concepts, Deals, and DocumentsPro Bono Service by In-House Counsel: Strategies and PerspectivesSmart Negotiating: How to Make Good Deals in the Real WorldThinking Like a Writer: A Lawyer’s Guide to Effective Writing & EditingWorking with Contracts: What Law School Doesn’t Teach You

Order now at www.pli.eduOr call (800) 260-4754 Mon.–Fri., 9 a.m.–6 p.m.

Practising Law Institute1177 Avenue of the Americas

New York, NY 10036

When ordering, please use Priority Code NWS9-X.

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FINANCIAL SERVICES

MEDIATIONANSWER BOOK

2017 Edition

Edited byLayn R. Phillips

Pierre M. GentinJill R. Sperber

Lindsay R. Goldstein

Practising Law Institute New York City

#212508

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This work is designed to provide practical and useful information on the subject matter covered. However, it is sold with the understanding that neither the publisher nor the author is engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

QUESTIONS ABOUT THIS BOOK?

If you have questions about billing or shipments, or would like information on our other products, please contact our customer service department at [email protected] or at (800) 260-4PLI.

For any other questions or suggestions about this book, contact PLI’s editorial department at: [email protected].

For general information about Practising Law Institute, please visit www.pli.edu.

Legal Editor: Lori Wood

Copyright © 2017 by Practising Law Institute. All rights reserved. Printed in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Practising Law Institute.

LCCN: 2017943413ISBN: 978-1-4024-2896-84th

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About the Editors

Layn R. Phillips, founder of Phillips ADR Enterprises (PADRE), is both a former United States Attorney and a former United States District Judge. Judge Phillips joined the United States Attorney’s office in Los Angeles in 1980 as an Assistant United States Attorney, serving as a federal prosecutor in the Central District of California for four years. During the Reagan administration, he returned to his home state of Oklahoma, where, at age 31, he was nominated to serve as a United States Attorney. At age 34, he again was nominated by President Reagan to serve as a United States District Judge in Oklahoma City. During his tenure on the bench, he presided over more than 140 federal tri-als in Oklahoma, New Mexico, and Texas. He also sat by designation on the United States Court of Appeals for the Tenth Circuit in Denver, Colorado, where he participated in numerous panel decisions and published multiple opinions. In 1991, he resigned from the federal bench and joined Irell & Manella, where for 23 years he specialized in complex civil litigation, internal investigations, and alternative dis-pute resolution. For his years of commitment to public service, he was named as one of the 10 Outstanding Young Americans by the U.S. Junior Chamber of Commerce. As a result of his trial work, Judge Phillips was elected into the American College of Trial Lawyers. He has the dual honor of being named by LawDragon as one of the “Leading Judges in America” and as one of the “Leading Litigation Attorneys in America.”

Pierre M. Gentin is a partner in the litigation practice group of Cahill Gordon & Reindel LLP. He represents clients in disputes, litigation, investi-gations, and regulatory enforcement matters, with a focus on the finan-cial services sector. Before joining Cahill, Mr. Gentin served for nearly two decades in senior legal and risk positions at Credit Suisse AG, including as Global Head of Litigation, Regulatory Investigations and Employment Law, Head of Reputational Risk for the Americas, and General Counsel for the Global Research Division. Mr. Gentin was a member of Credit Suisse’s Global Leadership Council and of the Gen-eral Counsel Division’s worldwide management committee which ran the 2000-person legal and compliance organization. In 2014, LawDragon named Mr. Gentin one of the 500 Leading Lawyers in America for his 4t

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“masterful job managing Credit Suisse’s civil disputes, investigations and enforcement actions around the world,” and in 2015, The Legal 500 named him In-House Litigation “Individual of the Year” for the United States. In a 2016 profile, American Lawyer Media noted that Mr. Gentin “helped navigate Credit Suisse through the roiling aftermath of the financial crisis” including “dealing with regulators” and “perfect[ing] the art of negotiation.” Before joining Credit Suisse, Mr. Gentin was an Assistant United States Attorney for the Southern District of New York. He currently serves on the executive committee and board of trustees of the Practising Law Institute and is chair of PLI’s nominating committee. In 2008, he was named a Young Global Leader of the World Economic Forum and he is a member of the Forum’s Global Agenda Council. He is immediate past Chair of the Board of Directors of the Princeton University Center for Jewish Life and has served as Chair for the Bronx Region of the Princeton University Alumni Schools Committee. Mr. Gentin has served on the executive board of the Anti-Defamation League’s Lawyers’ Division and in 2014, he was honored with the ADL’s Human Relations Award. He has served on the Fordham Corporate Law Center’s board of advisors and speaks frequently at law and business schools in the United States and abroad. He is currently Lecturer in the MBA Program at the University of Pennsylvania’s Wharton School of Business. Mr. Gentin graduated from Princeton University, magna cum laude, Phi Beta Kappa, and from Columbia Law School.

Jill R. Sperber is a seasoned neutral and member of the American College of Civil Trial Mediators who mediates matters nationwide. Ms. Sperber has been involved in the mediation and/or arbitration of more than five hundred disputes, including cases ranging from general business and personal disputes to complex, high-stakes, and multi- party matters. She frequently mediates financial services matters. In addition to helping parties reach satisfying monetary resolutions, including settlements ranging from five- to ten-figure values, Ms. Sperber has played an integral role in cultivating resolutions involving innova-tive and effective non-monetary settlement components.

Prior to founding Sperber Dispute Resolution, Inc., and affiliating with ADR service provider Judicate West, Ms. Sperber honed her media-tion and arbitration skills during her exclusive practice as a neutral in 4t

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the Irell & Manella Alternative Dispute Resolution Center. Before she committed to that full-time ADR docket, Ms. Sperber litigated with Irell & Manella and at Cleary Gottlieb Steen & Hamilton. Ms. Sperber served as a law clerk to the Hon. Gary L. Taylor (Ret.) of the Central District of California, and the Hon. Ferdinand F. Fernandez of the Ninth Circuit, as well as an intern to the Hon. Leonard B. Sand of the Southern District of New York. Ms. Sperber is admitted to the Bars of California, New Jersey, and New York.

Ms. Sperber earned her J.D. from Columbia Law School, where she was a Harlan Fiske Stone Scholar. She was the Senior Articles Editor for the Columbia Business Law Review. Ms. Sperber earned her B.A. from the University of North Carolina at Chapel Hill.

Lindsay R. Goldstein is a Vice President of Credit Suisse in the General Counsel division, based in New York. Ms. Goldstein is a mem-ber of the Litigation & Investigations Group, where she manages a complex docket of civil litigation in the Americas, including matters with cross-border implications. Prior to joining Credit Suisse in 2011, Ms. Goldstein was an associate at Cravath, Swaine & Moore LLP and a judicial clerk in the Eastern District of Pennsylvania. Ms. Goldstein holds a J.D. from Fordham Law School, cum laude, and a B.A. from the University of Pennsylvania, also cum laude.

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About the Contributors

Max W. Berger is the senior founding partner of Bernstein Litowitz Berger & Grossmann, where he supervises the firm’s securities litiga-tion practice and prosecutes class and individual actions on behalf of the firm’s clients. Mr. Berger has prosecuted some of the most high-profile securities cases in history, and is recognized by industry observers as one of the top securities litigators in the nation. He was named one of the “100 Most Influential Lawyers in America” by the National Law Journal for holding Wall Street banks accountable and obtaining over $5 billion in cases arising from the financial crisis, as well as for his work as a “master negotiator” in obtaining numerous multi-billion dollar recoveries for investors. The subject of feature articles in the New York Times, BusinessWeek and numerous legal publications for his achievements, Mr. Berger lectures extensively for many professional organizations and is the co-author of a leading trea-tise on litigating securities actions.

Michael D. Blatchley, a partner at Bernstein Litowitz Berger & Grossmann, focuses his practice on advising clients and prosecuting securities fraud litigation. Mr. Blatchley has successfully litigated a number of significant securities actions, including financial crisis cases arising out of wrongdoing related to the issuance of residential mortgage-backed securities and other complex financial products. Mr. Blatchley is also a member of the firm’s new matter department, and he has been recognized by Benchmark Litigation as one the nation’s most accom-plished legal partners under the age of forty.

Wayne E. Borgeest is a founding partner of Kaufman Borgeest & Ryan LLP and a nationally recognized lawyer in the practice areas of directors’ and officers’ liability, indemnification and insurance. He represents a broad array of domestic and international insurance companies in mat-ters throughout the United States. Mr. Borgeest is a frequent lecturer and has published dozens of articles on topics ranging from D&O liability and insurance, to ERISA fiduciary liability and insurance, employment practices liability and insurance and professional liability and insur-ance. Mr. Borgeest has worked extensively in representing insurers and underwriters in the drafting of D&O, EPL, ERISA and professional 4t

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liability insurance policies, counseling insurers on underwriting and claim issues, in acting as coverage and monitoring counsel in the most complex litigations nationally, and in the representation of directors and officers.

Christopher M. Burke chairs Scott+Scott’s competition practice and sets the firm’s litigation standards. Mr. Burke’s principal practice is in complex antitrust litigation, particularly in the financial services industry and he has served as lead counsel in some of the world’s larg-est financial services antitrust matters. He currently sits as a partner in the firm’s San Diego and New York offices. Mr. Burke has recovered billions of dollars for his clients. He regularly presents to the bar on issues relating to class actions, financial services litigation, antitrust and ethics. Mr. Burke is a graduate of The Ohio State University (B.A. 1984), William & Mary (M.A. 1988), and the University of Wisconsin (M.A. 1989; J.D. 1993; Ph.D. 1996). He has also served as an Assistant Attorney General at the Wisconsin Department of Justice and has lectured on law-related topics, including constitutional law, law and politics, and civil rights at the State University of New York at Buffalo and at the University of Wisconsin. Mr. Burke’s book, The Appear-ance of Equality: Racial Gerrymandering, Redistricting, and the Supreme Court (Greenwood, 1999), examines conflicts over voting rights and political representation within the competing rhetoric of communitarian and liberal strategies of justification.

Jessica S. Carey is deputy chair of Paul, Weiss, Rifkind, Wharton & Garrison’s White Collar & Regulatory Defense Practice Group, focusing on a broad range of criminal, regulatory and complex commercial litiga-tion matters. She has extensive experience defending financial institu-tions and corporations in complex securities and commercial matters in federal and state courts across the country as well as representing financial institutions and other clients before the Department of Jus-tice, the Securities and Exchange Commission, and numerous other federal and state banking authorities. Ms. Carey is co-chair of the firm’s Women’s Initiatives Committee. In 2016, she was recognized as a “Rising Star” by the New York Law Journal.

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Richard W. Clary is a senior partner and former Head of Litigation at Cravath, Swaine & Moore LLP. Mr. Clary’s practice has focused on complex litigation and securities litigation, with particular empha-sis on representing financial institutions. He has represented Credit Suisse in numerous matters, including Enron-related civil litigation in federal, state and bankruptcy courts, litigation related to collateral-ized debt obligations and residential mortgage-backed securities, and the Lehman bankruptcy. He also has represented Credit Suisse and Deutsche Bank in litigation regarding the Hexion/Huntsman merger and Citigroup’s outside directors in subprime-related litigation. Mr. Clary has been Vice President of the New York City Bar Association and Vice Chair of the Legal Aid Society, and currently serves on the Lawyers Committee of the National Center for State Courts. He is also a Lecturer of Law at Harvard Law School, teaching Complex Litigation and Class Actions.

Gary V. Dixon is a retired partner in Troutman Sanders LLP. He previ-ously was a partner in Ross, Dixon & Bell LLP. Gary specialized in han-dling directors and officers liability and professional liability insurance matters throughout his career.

James J. Dragna is a partner at Morgan, Lewis & Bockius LLP, has practiced environmental law for more than thirty years, and has been described by Chambers USA as “one of the best lawyers in his field.” Mr. Dragna served as senior trial counsel at the U.S. Department of Justice, Environmental Enforcement Section in Washington, D.C. In private practice, he represents clients in some of the nation’s most significant environmental cases. He has served as lead environmental counsel for a number of national and international corporations, and has been at the center of major environmental incidents leading crisis management teams, including coordination counsel in the Deepwater Horizon and Porter Ranch gas leak multiparty enforcement and toxic tort actions. Mr. Dragna also serves several major municipalities as special counsel in wastewater litigation and permitting issues. He has been involved in some of the nation’s most complex environmental settlements, and where settlement is not possible, has achieved decisive results for his client in litigation.4t

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Thomas A. Dubbs is a senior partner in the Securities Litigation Prac-tice of Labaton Sucharow LLP. He focuses on the representation of institutional investors in domestic and multinational securities cases. Recognized as a leading securities class action attorney, earning acco-lades from Chambers & Partners, The Legal 500, the National Law Jour-nal, Law360, and Benchmark Litigation, Mr. Dubbs has served or is cur-rently serving as lead or co-lead counsel in some of the most important federal securities class actions in recent years, including those against American International Group, Goldman Sachs, the Bear Stearns Compa-nies, Facebook, Fannie Mae, Broadcom, and WellCare. Mr. Dubbs is a member of the New York State Bar Association, the Association of the Bar of the City of New York, and the American Law Institute, and he is a Patron of the American Society of International Law. He also serves as a FINRA Arbitrator and is an Advisory Board Member for the Institute for Transnational Arbitration.

Nicole Duckett Fricke is General Counsel and Vice President for the LA Clippers where she serves as the team’s chief legal officer and advises on all strategies for driving and protecting the business. Prior to joining the Clippers, Ms. Duckett Fricke was the General Counsel for Regal Assets LLC, an alternative assets firm that specializes in commodities. Before going in-house, Ms. Duckett Fricke had a sixteen-year regulatory compliance and securities litigation practice before the federal and state courts of California and the U.S. Court of Appeals for the Ninth Circuit.

Koji F. Fukumura is chair of the securities litigation practice at Cooley Godward Kronish LLP, and serves on the firm’s management commit-tee. His practice focuses on complex commercial litigation, including the defense of securities class actions, derivative suits, M&A-related class actions and government investigations. He regularly conducts inter-nal investigations for boards as well as their audit or special litigation committees. Mr. Fukumura also counsels public companies, directors, officers and principal shareholders on a wide range of issues relating to corporate governance, antitrust/unfair competition, Foreign Corrupt Practices Act, SEC/FINRA enforcement, insider trading, and disclosure obligations under, and compliance with, federal and state securities laws. He is currently chair-elect of the ABA Section of Litigation.4t

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Avi Josefson, a partner at Bernstein Litowitz Berger & Grossmann, has helped to recover hundreds of millions of dollars for investors through his prosecution of securities fraud and other shareholder litigation. As a senior member of the firm’s new matter department, Mr. Josefson works with a team of attorneys, financial analysts, forensic accoun-tants, and investigators, to counsel the firm’s clients concerning their potential legal claims. Mr. Josefson has been recognized for his accom-plishments in prosecuting class actions, including being named as a “Rising Star” by Law360 based on his work representing institutional investors in securities actions, and he is the co-author of a leading treatise on litigating securities cases.

Brad S. Karp, chairman of Paul, Weiss, Rifkind, Wharton & Garrison, is one of the country’s leading litigators and corporate advisers. He has extensive experience successfully defending financial institutions and other companies in “bet-the-company” litigations and regulatory matters. He has been named one of the “Most Influential People in the Boardroom” multiple times by the National Association of Corporate Directors; for six consecutive years he has been recognized by Cham-bers USA as the only “Star” in its Nationwide Securities Litigation cate-gory; and he was recently profiled as a “Litigation Trailblazer” by the National Law Journal. Mr. Karp has written more than 500 articles on business issues, and he has lectured frequently on business litigation, securities litigation and corporate governance at Harvard Law School, Columbia Law School, NYU Law School and the Federal Judicial Center. He is also active in the community, serving as a director/trustee of numerous charitable, medical, and educational institutions. Mr. Karp has spent his entire professional career at Paul, Weiss, beginning as a summer associate in 1983.

David Kessler has managed the securities litigation department of Kessler Topaz Meltzer & Check for the past fifteen years. During this time period, KTMC has grown from a boutique firm of less than ten employees to a nationally recognized class action firm with 100 law-yers practicing in a variety of disciplines in the class representative space. With a CPA, on behalf of the firm, Mr. Kessler has specialized in prosecuting financial frauds resulting in billions of dollars in recover-ies for the firm’s institutional client base and the classes of investors they represent. Mr. Kessler is also well versed in damage studies and 4t

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loss causation analysis and utilizes this background to engage in high- profile mediations of some of the largest securities class actions in history, including widely known scandals such as the IPO allocation case, Tyco, Lehman Brothers, and the Bank of America/Merrill Lynch merger.

Daniel J. Kramer is a Paul, Weiss, Rifkind, Wharton & Garrison partner and one of the most highly respected securities litigators in the United States. He regularly represents leading corporations and financial institutions in their highest-stakes securities and derivative litiga-tion and regulatory investigations, and he is recognized by numerous indus try publications and directories as one of the country’s foremost litigators for securities and “bet-the-company” litigation. U.S. News & World Report/Best Lawyers named him “2017 Lawyer of the Year” for Securities Litigation and “2016 Lawyer of the Year” for Securities Enforcement Litigation. Mr. Kramer also lectures and writes extensively on securities litigation, corporate governance and regulatory issues. He is the co-author of Federal Securities Litigation: A Deskbook for the Practitioner and co-editor of Corporate Internal Investigations: An Inter-national Guide.

Elizabeth S. Lachman is an associate in the Los Angeles office of McKool Smith Hennigan, where her practice focuses on complex commercial liti gation. Ms. Lachman has represented individual and corporate cli-ents in various areas of the law, including commercial, contract and partnership disputes, and well as in cases arising under the Federal False Claims Act. Ms. Lachman has been a member of the trial team on multiple cases that have resolved favorably for the firm’s clients. Ms. Lachman joined the firm in 2008.

Jay P. Lefkowitz is a leading partner in the litigation practice of Kirkland & Ellis, and a member of the firm’s Global Executive Manage-ment Committee. He is also an adjunct professor at Columbia Law School, where he teaches a seminar on Supreme Court advocacy. Mr. Lefkowitz has served as lead trial and appellate counsel in a wide variety of substantive areas, including shareholder disputes, antitrust, product liability, litigation against the FDA and False Claims Act mat-ters. He has also conducted numerous internal investigations for public companies and audit committees. He has also been awarded numerous 4t

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accolades, including the National Law Journal’s “The 100 Most Influ-ential Lawyers in America,” and the American Lawyer’s “Lawyer of the Week,” and is one of only three lawyers to have been named Law360’s “MVP of the Year” five years in a row. He has won two landmark five- to-four decisions at the U.S. Supreme Court in favor of the pharmaceu-tical industry in Pliva v. Mensing in 2011, and Mutual v. Bartlett in 2013. Mr. Lefkowitz currently serves on Advisory Boards for many organiza-tions, including Columbia Law School, NYU Alexander Hamilton Center and Barnard College, and his public service career includes serving as a senior White House advisor to two presidents, and as United States Special Envoy on Human Rights in North Korea.

David J. Lender is co-chair of the global Litigation Department at Weil Gotshal & Manges, and has over twenty years of experience trying and litigating complex international commercial disputes. His multi-disciplinary practice encompasses matters involving antitrust, con-sumer fraud, contracts, patents, trade secrets, and other intellectual property issues, among others, including in the class action context. Mr. Lender has considerable experience across industries, particu-larly in the financial services sector, where he has handled significant disputes involving bankruptcy, real estate, lending, and other matters. He is a recognized expert, author and frequent lecturer on electronic discovery issues and is the co-author of the leading treatise on the subject, Electronic Discovery: Law and Practice, originally published by Aspen Publishers in 2003.

Cary Lerman is a litigation partner in the Los Angeles office of Munger, Tolles & Olson. Recognized by Chambers USA and a Fellow in the American College of Coverage & Extracontractual Counsel, Mr. Lerman’s practice includes representing policyholders in insurance coverage litigation, international arbitrations, and advising clients on restruc-turing their corporate insurance programs. Mr. Lerman’s practice also includes complex business litigation and arbitrations, including de-fending class action lawsuits, securities litigation, investment advisory claims, reinsurance transactions, legal malpractice claims, complex commercial disputes and consumer unfair trade practices actions. He regularly teaches international arbitration at law schools in the former Soviet Union, including Russia, Ukraine and Azerbaijan.4t

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Carolyn Hoecker Luedtke is a litigation partner in the San Francisco office of Munger, Tolles & Olson. Ms. Luedtke’s practice focuses on complex business litigation, with a particular emphasis on intellectual property matters. Her specialties include trade secret, copyright, and employee mobility litigation, the videogame industry, and taking complex litigation cases to trial. Ms. Luedtke has been named among California’s “Top Women Lawyers” by the Daily Journal. She was also named to The Recorder’s Women Leaders in Technology Law list.

Marc S. Maister is a partner at Irell & Manella LLP, where he is the head of the insurance group and cyber liability and privacy group. He spe-cializes in handling high-profile insurance recovery matters, general civil litigation, cyber liability and privacy issues and professional liability defense.

Joseph H. Meltzer leads Kessler Topaz Meltzer & Check’s Fiduciary, Consumer Protection and Antitrust groups. He has been lead or co-lead counsel in numerous actions brought under fiduciary laws, including ERISA, and has recovered billions of dollars for clients and the classes they represent. Mr. Meltzer has represented institutional investor cli-ents in a variety of breach of fiduciary duty cases and has some of the largest settlements in fiduciary breach actions—including multiple cases where the recovery was in the hundreds of millions of dollars. The firm also has a robust Consumer Protection department which represents individuals, businesses, and governmental entities that have sustained losses as a result of defective products or improper business practices. In his antitrust work, Mr. Meltzer represents clients injured by anticompetitive and unlawful business practices, including overcharges related to prescription drugs, health care expenditures and commodities. He has also represented various states in pharma-ceutical pricing litigation as a Special Assistant Attorney General.

Mary Anne Mullin is the Insurance Liaison at Phillips ADR. She is a graduate of Rutgers University and The Catholic University of America.

Barry Michael Okun is Of Counsel of the firm and a seasoned trial and appellate lawyer in Labaton Sucharow LLP’s Securities Litigation Practice. He has more than thirty years of litigation experience. Most recently, Mr. Okun was part of the Labaton Sucharow team that recov-ered more than $1 billion in the eight-year litigation against American 4t

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International Group, Inc. He also played a key role representing the Suc-cessor Liqui dating Trustee of Lipper Convertibles, LP and Lipper Fixed Income Fund, L.P., failed hedge funds. He has argued appeals before the United States Court of Appeals for the Second and Seventh Circuits and the Appellate Divisions of three out of the four judicial depart-ments in New York State. He has also appeared in numerous trial courts through out the country.

Robert L. Palmer is a principal in the Los Angeles office of McKool Smith Hennigan. For more than forty years, Mr. Palmer has had a complex litigation and trial practice. He was an Assistant Special Prosecutor with the Watergate Special Prosecution Force and has represented individuals and entities in a wide range of federal and state litigation in the areas of antitrust, securities, banking and finance, and real estate law, in cases arising under federal and state False Claims Acts, and in civil rights and human rights litigation.

John D. Pernick, a partner at Bergeson, LLP, has over twenty years’ experience representing clients ranging from early-stage startups and their investors to Fortune 50 corporations in complex business litiga-tion in state and federal courts, including securities and other class actions, shareholder derivative actions, partnership and corporate control disputes, as well as general commercial disputes. Mr. Pernick also represents companies and individuals in connection with Securi-ties Exchange Commission and other regulatory investigations.

Lawrence Portnoy is a partner at Davis Polk & Wardwell in New York. He is a commercial and securities litigator representing clients in state and federal courts and in arbitrations throughout the United States. Since entering private practice in 1989, he has participated in more than thirty mediations.

James W. Quinn is head of JW Quinn ADR LLC, where he focuses on mediation, arbitration, and trial consulting, and serves as Of Counsel at Berg & Androphy. Earlier, he spent his entire career at Weil, Gotshal & Manges LLP, where he led the Litigation Department and served on the firm’s Management Committee. He has more than forty-five years of experience, and is regarded as one of the most accomplished trial, arbitration, and mediation lawyers in the United States. Mr. Quinn has practiced in all areas of complex litigation and alternative dispute 4t

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resolution, with an emphasis on antitrust, securities, false advertising, sports, entertainment, patent, and related complex intellectual prop-erty litigation.

Diane E. Richard is a partner at Dente Richard LLP where she prac-tices employment and labor law, including single plaintiff and class action wage and hour matters, unlawful discrimination, harassment and termination cases, family and medical leave issues, and whistle-blower cases. Her extensive experience representing clients in multi-million dollar, multi-party, and complex litigation matters covers litigating cases in California state and federal courts and negotiating and documenting complex settlements. Immediately prior to forming Dente Richard LLP, Ms. Richard worked at Robbins Arroyo LLP where, in addition to representing clients on employment matters, she was a member of the firm’s settlement group matters.

Brian J. Robbins, a talented securities litigation attorney, is the co-founder and managing partner of Robbins Arroyo LLP. His litigation experience comes from prosecuting hundreds of cases, which in turn has earned the firm recognition as a leader in shareholder rights liti-gation. Mr. Robbins has dedicated his career to combating corporate mismanagement and fraud on behalf of shareholders, consumers, and small businesses. Furthermore, as an advocate of shareholder rights and corporate governance reform, Mr. Robbins has been published in numerous works and is an experienced panelist on securities litiga-tion topics.

Darren J. Robbins, Travis E. Downs III, Benny C. Goodman III and Erik W. Luedeke are attorneys in Robbins Geller’s San Diego office. Their litigation experience includes representing plaintiffs in complex shareholder disputes, including shareholder derivative actions and class actions. They have litigated in several federal and state courts across the nation.

David R. Scott is the founder and managing partner of Scott+Scott, with offices in New York, Connecticut, Ohio, California, and London, England. He concentrates on high-stakes commercial and complex civil litigation, including securities actions and competition damages claims. For his outstanding work in litigation, Mr. Scott has received a highly recommended ranking by Benchmark Litigation, and was elected 4t

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to Who’s Who Legal: Competition 2015 and 2016, a list of the world’s top antitrust lawyers. Mr. Scott is regularly interviewed by, and quoted in, The Financial Times, The Guardian, The Telegraph, Law360, as well as the BBC.

Matthew Solum is a litigation partner of Kirkland & Ellis. As trial and appellate counsel for corporations, private equity firms, investment banks and financial services firms, Mr. Solum handles significant com-mercial cases, including merger and acquisition, securities, class action, derivative, contract and other complex commercial matters. In public M&A litigation, he represents acquirers, targets, boards of directors, special committees and financial advisors in class actions, corpo-rate control disputes and appraisal proceedings. He also represents purchasers and sellers in connection with contract, fraud, indemni-fication and working capital claims. In complex commercial matters, Mr. Solum handles contract, fraud, fiduciary duty, tortious interference, antitrust, trade secret, trade dress, slander and libel claims. The Legal 500 United States recommends Mr. Solum for Commercial Litigation and M&A Litigation. In 2014, he was also recognized as one of the top young securities lawyers in the United States by Law360.

Steven W. Thomas, Emily Alexander, Mark Forrester and Stephen Sorensen are the partners of Thomas, Alexander, Forrester & Sorensen (TAFS). TAFS has tried and won multi-million-dollar cases against accounting firms and others, including the only jury verdict finding an auditing firm negligent in connection with Bernard Madoff invest-ments. TAFS recently tried a multi-billion-dollar case against PwC in Miami state court that settled just before TAFS rested the plaintiff’s case. TAFS typically represents victims of large frauds who are willing to try their cases to verdict, and clients include one of the world’s larg-est investment banks, bankruptcy trustees and creditors, charitable foundations, and investment funds. TAFS also represents whistleblow-ers before the IRS and SEC, including the two largest tax whistleblow-ers in history.

Herbert S. Washer is a litigation partner at Cahill Gordon & Reindel LLP and a member of its Executive Committee. Mr. Washer’s practice con-centrates on the defense of complex securities, derivative-related and commodities matters involving civil, regulatory and criminal proceed-ings. Mr. Washer currently serves as lead counsel representing major

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financial institutions in numerous high-profile matters, including civil, criminal and/or regulatory enforcement actions. Mr. Washer is rec-ognized as a leading securities litigator by the major lawyer ranking directories. He is an author and frequent lecturer on securities litiga-tion and government investigations.

Jeff S. Westerman, partner at Westerman Law Corporation, practices in the areas of consumer, investor, securities fraud, and antitrust class actions, shareholder derivative actions, and corporate mergers and acquisitions litigation. He has served as court-appointed plaintiffs’ lead or co-lead counsel in cases resulting in significant corporate gov-ernance changes, and monetary benefits. Mr. Westerman has served as a moderator or speaker, with judges and bar leaders, for programs on complex litigation, class actions, and settlements.

Michael R. Young is a litigation partner at New York’s Willkie Farr & Gallagher LLP where he chairs the firm’s securities litigation and enforcement practice. He has been named by Accounting Today as one of the “top 100 most influential people in accounting.” Mr. Young’s books include The Financial Reporting Handbook (Wolters Kluwer 2003), Accounting Irregularities and Financial Fraud (Harcourt 2000) and, most recently, Financial Fraud Prevention and Detection: Gover-nance and Effective Practices (Wiley 2014). Mr. Young has served as a member of FASB’s Financial Accounting Standards Advisory Coun-cil, as chair of the New York City Bar Association’s Financial Report-ing Committee, and as counsel to the American Institute of Certified Public Accountants and the Center for Audit Quality. His trial work includes the landmark jury verdict for the defense in the first class ac-tion tried to a jury pursuant to the Private Securities Litigation Reform Act of 1995.

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Table of Chapters

Chapter 1 Laying the Groundwork for MediationChapter 2 The Decision to Mediate: Choosing the Mediator,

Venue, and ProcessChapter 3 The Players in a Mediation: Parties, Counsel, and

OthersChapter 4 Mediation Submissions by Plaintiffs and DefendantsChapter 5 Preparing for and Participating in the Mediation

SessionChapter 6 Getting Underway and Closing the DealChapter 7 Following Up If Initial Negotiations FailChapter 8 Mediation Issues Relating to AuditorsChapter 9 Insurance and MediationChapter 10 Recurring Legal Issues in the Mediation of Financial

Institution Disputes

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About the Editors �� viiAbout the Contributors ��xiTable of Chapters �� xxiiiTable of Contents ��xxvPreface �� xlix

Chapter 1 Laying the Groundwork for MediationMax W. Berger, Michael D. Blatchley, Jessica S. Carey, Avi Josefson, Brad S. Karp & Daniel J. Kramer

Determining When to Mediate ��1-3

Q 1�1 At what stage in a dispute is mediation most effective? ��1-3

Readiness of Parties��1-4

Q 1�1�1 How do you know if the parties are ready to mediate? ��1-4

Early in the Case ��1-4

Q 1�1�2 Does it make sense to mediate early in a case? ��1-4

Late in the Case ��1-6

Q 1�1�3 Is it ever too late in a case to mediate? ��1-6

After Discovery ��1-7

Q 1�1�4 What are some of the benefits of mediating after discovery? ��1-7

Impact of Developments in the Case ��1-7

Q 1�1�5 What developments in a case impact counsel’s determination of when to mediate? ��1-7

Developments Outside the Litigation ��1-8

Q 1�1�6 What developments that occur outside the context of the litigation can impact counsel’s determination of when to mediate? ��1-84th

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Mediation “Red Flags” ��1-9

Q 1�2 What are the “red flags” that a mediation could be counter-productive? ��1-9

Other Preconditions for a Successful Mediation ��1-10

Q 1�3 Are there structural/legal issues that have to be resolved before a mediation can be successful? ��1-10

Special Considerations for Financial Services Mediations ��1-11

Q 1�4 Are there special considerations for determining when to mediate financial services disputes? ��1-11

Negotiating before Engaging a Mediator ��1-11

Q 1�5 Should the parties attempt to negotiate without the aid of a mediator before engaging a mediator? ��1-11

Reasons Not to Mediate ��1-12

Q 1�6 What are some reasons not to engage in mediation? ��1-12

Goals of Mediation ��1-12

Q 1�7 Is settlement always the goal of mediation? ��1-12

Multiple Rounds of Mediation ��1-13

Q 1�8 If the parties fail to reach a settlement during mediation, is it worthwhile to try conducting a mediation later in the case? ��1-13

Special Circumstances in Considering the Appropriateness of Mediation ��1-14

Q 1�9 How is the decision to mediate impacted in a multi-defendant or multi-plaintiff case?��1-14

Q 1�10 What are the considerations when mediating cases involving non-U�S� clients? ��1-15

Preparing the Client for a Successful Mediation ��1-16

Q 1�11 How can counsel overcome resistance to mediation by a client? ��1-16

Q 1�12 How can counsel explain mediation to a client who has never mediated? ��1-17

Q 1�13 How can counsel prepare clients for a successful mediation? ��1-184th

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Initial Mediation Communications ��1-19

Q 1�14 Should the parties exchange mediation statements? ��1-19Q 1�14�1 Should the parties make presentations to each

other (whether merits, damages or other topics) or communicate through the mediator? ��1-20

Confidentiality ��1-21

Q 1�15 Should the parties be required to keep the mediation sessions confidential? ��1-21

Chapter 2 The Decision to Mediate: Choosing the Mediator, Venue, and ProcessThomas A. Dubbs, David J. Lender, Barry Michael Okun & James W. Quinn

Choosing the Right Mediator ��2-3

Q 2�1 What qualities should be sought in selecting a mediator? When is it important to select a mediator with expertise in a particular area of law or subject matter, who is familiar with the forum, or who has judicial expertise? ��2-3

Impartiality ��2-4

Q 2�1�1 What should be considered in evaluating the impartiality of a potential mediator? ��2-4

Mediation Style ��2-4

Q 2�1�2 What are the different mediation styles? ��2-4Q 2�1�3 How can parties evaluate which mediation style is

right for the dispute? ��2-6

Mediator’s Background, Experience, and Expertise ��2-7

Q 2�1�4 What professional qualifications and experience should a mediator have? ��2-7

Mediator’s Process Skills and Intangible Attributes ��2-8

Q 2�1�5 What process skills should a mediator possess? ��2-8

Local and Jurisdiction-Specific Matters ��2-9

Q 2�1�6 What jurisdiction- and case-specific issues must be kept in mind in choosing a mediator? ��2-94th

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Differences between the Evaluative and Facilitative Style of Mediators ��2-10

Q 2�2 What are the strengths and weakness of each style of mediation? ��2-10

Advantages of Evaluative Mediators ��2-10

Q 2�2�1 What are the advantages of using an evaluative mediator? ��2-10

Disadvantages of Evaluative Mediators ��2-11

Q 2�2�2 What are the disadvantages of using an evaluative mediator? ��2-11

Advantages of Facilitative Mediators ��2-12

Q 2�2�3 What are the advantages of using a facilitative mediator? ��2-12

Disadvantages of Facilitative Mediators ��2-13

Q 2�2�4 What are the disadvantages of using a facilitative mediator? ��2-13

Mediators with “Stature” ��2-14

Q 2�3 When is it important to select a mediator with “stature”? ��2-14

Impact of Insurance Policy Limits ��2-15

Q 2�3�1 What impact should the existence of insurance policy limits have on the selection of a mediator? ��2-15

Agreeing to the Other Side’s Proposed Mediator ��2-16

Q 2�4 When should counsel agree to the mediator proposed by the other side? ��2-16

Location of the Mediation ��2-17

Q 2�5 What are the pros and cons of the mediation being conducted at counsel’s office?��2-17

Length of the Mediation ��2-19

Q 2�6 Should the parties agree up front as to how many sessions the mediation should take and whether the sessions should be closed? ��2-19

Role of Insurance ��2-20

Q 2�7 What role does insurance play? ��2-204th

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Pre-Mediation Consideration of the Role of Insurance ��2-21

Q 2�7�1 What should the plaintiff know about the defendant’s insurance coverage before the mediation begins? ��2-21

The “Within Policy Limits Demand” Card ��2-22

Q 2�7�2 What does a “demand for settlement within policy limits” mean? ��2-22

Settlements in Comparable Cases ��2-22

Q 2�8 How should the parties evaluate and use prior settlements in “comparable” cases? ��2-22

Exchange Mediation Statements or Confidential Submissions to the Mediator ��2-24

Q 2�9 Should mediation submissions be confidential or exchanged by the parties? ��2-24

Exchanging Submissions with Adversaries ��2-24

Q 2�9�1 What are the advantages to the parties exchanging their mediation statements? ��2-24

Confidential Submissions ��2-25

Q 2�9�2 What are the advantages to keeping the submissions confidential to the mediator? ��2-25

Alternatives to Mediation Statements ��2-26

Q 2�10 When might mediation statements not be necessary? ��2-26

Opening Statements ��2-26

Q 2�11 Should there be opening statements? ��2-26

Steps in the Mediation Process��2-28

Q 2�12 How does a mediation begin? ��2-28

Evaluating the Changing Positions of the Parties ��2-28

Q 2�12�1 What techniques are used to evaluate the changes in offers and counter-offers? ��2-28

Binding Mediation��2-30

Q 2�13 What are the pros and cons of binding mediation? ��2-30

Addressing Issues of Corporate Governance Relief ��2-31

Q 2�14 Can mediations address “corporate governance” relief issues? �� 2-31

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Chapter 3 The Players in a Mediation: Parties, Counsel, and OthersBrian J. Robbins, Diane E. Richard & Herbert S. Washer

Parties and Principals ��3-2

Q 3�1 What roles do the principals or parties play in the mediation? ��3-2Q 3�1�1 Should the principals attend the mediation sessions? ��3-2Q 3�1�2 What advantages do the parties’ principals gain by

attending the mediation sessions?��3-3

Counsel ��3-3

Q 3�2 What is counsel’s role in the mediation? ��3-3

Decision-Makers ��3-4

Q 3�3 Who are other key decision-makers in the case? ��3-4

Insurers ��3-5

Q 3�4 In particular, what must be known about relevant insurance coverage? ��3-5

Q 3�4�1 What is the role of “coverage counsel”?��3-6

Other Defense-Side Participants ��3-7

Q 3�5 What other participants might appear on the defense side? ��3-7

Other Plaintiff-Side Participants��3-7

Q 3�6 What other participants might appear on the plaintiff side? ��3-7

Settlement Counsel ��3-8

Q 3�7 What type of mediations appropriately warrant separate settlement counsel? ��3-8

Expert Witnesses ��3-8

Q 3�8 Under what circumstances does it make sense to have experts attend, make presentations, or be available for questioning by the mediator? ��3-8

Q 3�8�1 When is it helpful to get damages experts to agree on key variables? ��3-9

Q 3�8�2 What should be considered in deciding the extent to which expert testimony should be shared during a mediation? ��3-94th

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Q 3�8�3 Should different experts from those being used to testify at the underlying trial be used for mediation-only purposes? ��3-10

Q 3�8�4 When should a neutral expert be used? ��3-11

Additional Factors Affecting the Nature of Participants’ Involvement ��3-11

Q 3�9 Who needs to have authority to authorize a settlement, when should such authority be available, and what kind of authority is needed? ��3-11

Q 3�10 How do personality issues affect the mediation process? ��3-12Q 3�10�1 How can counsel best handle difficult counsel and/or

difficult situations with principals? ��3-13Q 3�11 How should principals’ and other stakeholders’

expectations be set? ��3-14Q 3�12 Under what circumstances should the mediator play a

facilitative or an evaluative role? ��3-15Q 3�12�1 Are two mediators ever advisable? ��3-15

Q 3�13 Who should be invited to be part of the mediation? ��3-15

Chapter 4 Mediation Submissions by Plaintiffs and DefendantsTravis E. Downs III, Benny C. Goodman III, Jay P. Lefkowitz, Erik W. Luedeke, Darren J. Robbins & Matthew Solum

Establishing Ground Rules ��4-3

Plaintiff’s Perspective ��4-3

Q 4�1 What bottom-line knowledge should plaintiff’s counsel have from the plaintiff regarding willingness to settle? ��4-3

Q 4�2 What scope of confidentiality should be afforded? ��4-3Q 4�3 What information should be sought from the defendant

before the mediation begins? ��4-4Q 4�4 What are some other important pre-mediation information

requests? ��4-4Q 4�5 Which decision-makers should attend the mediation? ��4-5Q 4�6 When are pre-mediation caucuses helpful? ��4-6

Defendants’ Perspective ��4-7

Q 4�7 What ground rules are important to confidentiality? ��4-7Q 4�8 What agreements should be in place regarding the

mediation statement? ��4-7

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Q 4�9 Should the mediation statement be shared or submitted only to the mediator? ��4-8

Q 4�10 How should submission of evidence with the mediation statement be handled? ��4-8

Monetary Preconditions to Mediation ��4-9


Q 4�11 Should plaintiff impose monetary preconditions before settlement negotiations or mediation can begin? ��4-9


Q 4�12 Should defendants impose monetary preconditions before settlement negotiations or mediation can begin? ��4-10

Term Sheets ��4-11

Q 4�13 Should the parties create a term sheet in advance of the mediation session? ��4-11



Writing the Mediation Statement ��4-13

Q 4�14 What substance should be in a mediation statement? ��4-13


Q 4�14�1 In general, what should a mediation statement seek to accomplish? ��4-13

Q 4�14�2 How should the key legal issues be discussed? ��4-14Q 4�14�3 What facts should be included? ��4-14Q 4�14�4 How should key evidentiary issues be handled? ��4-15Q 4�14�5 How should the demand be handled in the mediation

statement? ��4-15


Q 4�15 In general, what should the mediation statement attempt to accomplish? ��4-16

Q 4�15�1 What information should be in the mediation statement? ��4-17

Q 4�15�2 How should the key legal issues be addressed by the defendant? ��4-18

Q 4�15�3 What facts should be highlighted in the mediation statement? ��4-184th

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Q 4�15�4 How should evidentiary issues be handled? ��4-19Q 4�15�5 How should the client’s requested outcome

be described? ��4-19

Ex Parte or Shared Mediation Submissions ��4-19

Q 4�16 When should ex parte versus shared mediation submissions be used? ��4-19



Other Materials to Be Submitted��4-22

Q 4�17 What other materials are important to submit?��4-22



Level of Candor with Parties and Mediator ��4-23

Q 4�18 What level of candor is best to use with the other side and with the mediator? ��4-23



Chapter 5 Preparing for and Participating in the Mediation SessionNicole Duckett Fricke, Lawrence Portnoy & Jeff S. Westerman

Review of Materials ��5-2

Q 5�1 What case-related materials should you review? ��5-2Q 5�1�1 What information about the opposing parties should

counsel review? ��5-3Q 5�1�2 What information about the pending action should be

clear in a party’s mind? ��5-4

Discussions with the Client ��5-4

Q 5�2 What should be discussed with the client before the start of the mediation session? ��5-44t

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Discussions with Co-Counsel ��5-6

Q 5�3 How should co-counsel work with each other? ��5-6

Discussions with the Mediator ��5-6

Q 5�4 What should be known about the mediator’s plans for the mediation process? ��5-6

Understanding the Client’s Goals ��5-7

Q 5�5 Why is it important to understand the client’s goals for the mediation? ��5-7

Opening Arguments ��5-8

Q 5�6 How are opening arguments handled in different kinds of mediations? ��5-8

Initial Joint Session ��5-9

Q 5�7 What happens at the initial joint session of parties and mediator? ��5-9

Initial Private Session��5-10

Q 5�8 What happens at the initial private session with each party? ��5-10

Reaching the Mediator Outside of Sessions ��5-11

Q 5�9 How to reach the mediator outside of sessions? ��5-11

Mediator Sessions with Attorneys Only ��5-11

Q 5�9�1 When do mediators meet with attorneys only? ��5-11

Mediator Sessions with Clients Only ��5-12

Q 5�9�2 When do mediators meet with clients only? ��5-12

Multiple Parties ��5-12

Q 5�10 What issues arise when there are multiple parties to the mediation? ��5-12

Negotiation Techniques ��5-14

Q 5�11 When only money is involved, what is a common approach to moving to a settlement? ��5-14

Q 5�12 What approaches are often employed when the resolution of the matter involves relief other than (or in addition to) money? ��5-154t

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Interaction with the Mediator ��5-15

Q 5�13 What are some considerations in interacting with the mediator? ��5-15

Q 5�13�1 Can the mediator be asked about the other side’s position? ��5-15

Q 5�13�2 When is it appropriate to replace the current mediator? ��5-16

“Take It or Leave It” Proposals ��5-16

Q 5�14 When are “take it or leave it” proposals likely to be successful? ��5-16

Chapter 6 Getting Underway and Closing the DealJames J. Dragna, David Kessler, Joseph H. Meltzer & John D. Pernick

Success Factors ��6-2

Q 6�1 What are the factors that impact whether a mediation will be successful? ��6-2

Plaintiffs and Defendants ��6-2

Pre-Mediation Steps��6-5

Q 6�2 What steps should be taken prior to the mediation to improve the possibilities of success? ��6-5

Plaintiffs ��6-5

Defendants ��6-6

Settlement Demands ��6-7

Q 6�3 Are settlement demands by plaintiffs prior to mediation helpful to the parties? ��6-7



Joint Sessions ��6-8

Q 6�4 Should there be a joint gathering with plaintiffs’ and defendants’ presentations at the outset of the mediation? ��6-84t

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First Mediation Session ��6-10

Q 6�5 What should be done during the first session with the mediator to put the client in the best negotiating position? ��6-10



Negotiation Techniques and Strategies ��6-13

Q 6�6 What techniques/strategies are used to move the negotiations in the client’s favor? ��6-13



Q 6�7 What are winning strategies for breaking stalemates and reaching an agreement? ��6-19



Q 6�8 When does it make sense to walk away? ��6-23



After the Agreement ��6-25

Q 6�9 What steps should the parties take once they have reached an agreement in a mediation? ��6-25



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Chapter 7 Following Up If Initial Negotiations FailChristopher M. Burke, Cary Lerman, Carolyn Hoecker Luedtke & David R. Scott

Mediations Are a Multi-Step Process��7-3

Q 7�1 Recognizing that many mediations do not settle during the first session, how should counsel approach follow-up sessions with the mediator? ��7-3

Plaintiffs’ Counsel ��7-3

Defense Counsel ��7-3

Initiating a Follow-Up Session ��7-4

Q 7�2 Where the mediation has broken down in the initial session, who should initiate a follow-up session? ��7-4



Mediator Follow-Up Techniques ��7-6

Q 7�3 What different mediator follow-up techniques are most effective? ��7-6



Direct Mediator-Client Communication ��7-9

Q 7�4 Is it a good follow-up technique for the mediator to talk directly with the client without counsel’s participation? ��7-9



Follow-Up Sessions in Multi-Party Disputes ��7-10

Q 7�5 Are there follow-up techniques that are particularly helpful in multi-party disputes? ��7-10



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Other Process-Oriented Steps During Follow-Up ��7-11

Q 7�6 What other process-oriented steps can help further the mediation follow-up process? ��7-11



Follow-Up After an Unsuccessful Double-Blind Mediator’s Proposal ��7-14

Q 7�7 Are there particular issues and techniques needed after an unsuccessful double-blind mediator’s proposal? ��7-14



When the Insurer Won’t Settle ��7-15

Q 7�8 What techniques are effective when an insurer has failed or refused to fund the settlement? ��7-15



Settlement Discussions Outside the Presence of the Mediator ��7-18

Q 7�9 How much follow-up settlement dialog should counsel continue to have with opposing counsel without the mediator present after the initial mediation failed? ��7-18



The Most Important Aspect of Follow-Up Sessions ��7-19

Q 7�10 What is the most important aspect of follow-up negotiations after a failed mediation? ��7-19



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Chapter 8 Mediation Issues Relating to AuditorsSteven W. Thomas, Emily Alexander, Mark Forrester, Stephen Sorensen & Michael R. Young

Obstacles, Challenges, and Benefits of Suing Accounting Firms ��8-3

Q 8�1 What are the obstacles, challenges, and benefits associated with prosecuting an accounting firm in complex securities and other professional liability cases? To what extent do these factors vary depending on the nature of the plaintiff, i�e�, a class, a trustee, or a large institution? ��8-3

Plaintiff’s Counsel Perspective ��8-3

Auditor’s Counsel Perspective ��8-6

Accounting Firm Defendants Participating with Other Defendants ��8-8

Q 8�2 What are the pros and cons of mediating a financial services case with the accounting firm defendant participating with all other defendants, as opposed to mediating separately with the accounting firm? ��8-8



“Last Man Standing” Approach ��8-10

Q 8�3 With accounting firms often deploying a “last man standing” strategy, what are the strategic advantages and disadvantages to this approach? Under what circumstances can an accounting firm, by not settling with the defendants, pose a credible threat to an earlier underlying settlement?��8-10



Comparables and Precedents ��8-13

Q 8�4 How is the discussion of comparable settlements and precedents, which seems to take on greater emphasis in mediations involving accounting firms, best handled? Why is there such a focus on the importance of precedent? ��8-13


Auditor’s Counsel Perspective ��8-144th

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Role of In-House Counsel in Mediations Involving Accounting Firms ��8-15

Q 8�5 What are the pros and cons of involving in-house counsel, who often play active and critical roles in accounting firm mediations? How, if at all, are mediating strategies adjusted to deal with them? ��8-15



Chapter 9 Insurance and MediationWayne E. Borgeest, Gary V. Dixon, Koji F. Fukumura, Marc S. Maister, Mary Anne Mullin & Thomas H. Sear

Whether to Mediate ��9-2

Q 9�1 How much input does the insurer have in making the decision to mediate? ��9-2

Q 9�1�1 How much input should the insurer have in making the decision to mediate? ��9-3

Q 9�1�2 How does the nature and type of policy language affect the insurer’s input?��9-3

Q 9�1�3 What are the main considerations for an insurer in determining whether to mediate? Do these differ from an insured’s considerations? ��9-4

Q 9�1�4 When should defense counsel contact the insurer if mediation is being considered? ��9-4

Timing of Mediation��9-5

Q 9�2 What are some of the special considerations that insurers may have in determining when to mediate? ��9-5

Q 9�2�1 What other factors and considerations may affect the decision of when to mediate? ��9-6

Selection of Mediator ��9-6

Q 9�3 Who gets the final say in selection—the insureds or the insurers? ��9-6

Q 9�3�1 Do insureds and insurers look for different things in choosing a mediator?��9-7

Q 9�3�2 Is insurance coverage expertise important? ��9-7Q 9�3�3 Are some mediators viewed as being fairer to insurers? ��9-84t

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Q 9�3�4 What should insurers do when a mediator is chosen by the court or insurers are forced to use a mediator whom they did not choose? ��9-8

Preparing the Insurers for Mediation ��9-9

Q 9�4 What can insureds and defense counsel do to maximize the chances of a successful mediation? ��9-9

Q 9�4�1 What information should be provided to insurers in advance of the mediation? ��9-9

Q 9�4�2 What should defense counsel say to insurers about the reasonable settlement value of the case?��9-9

Q 9�4�3 What settlement authority, if any, should be sought from insurers in advance of the mediation? ��9-10

Q 9�4�4 Should the insured and insurer attempt to agree upon a negotiating strategy in advance of the mediation? ��9-10

Q 9�4�5 What should be discussed with the mediator prior to the mediation? ��9-11

Q 9�4�6 Should brokers or insureds attempt to contact claims handlers or business people at the insurers prior to the mediation? ��9-11

Whether to Attend the Mediation ��9-12

Q 9�5 What are the considerations for an insurer in whether to attend a mediation? ��9-12

Q 9�5�1 Should all insurers attend or just certain insurers? ��9-13Q 9�5�2 Does insurer attendance signal case value to the

plaintiffs? ��9-13Q 9�5�3 Should the mediator “order” all insurers to attend?

Does that help avoid any signals? ��9-14Q 9�5�4 Does participation by phone work for insurers? ��9-14Q 9�5�5 Must an insurer representative with full authority

be physically present? ��9-15

Rules of Confidentiality ��9-15

Q 9�6 Are demands on insurers at a mediation truly confidential?��9-15Q 9�6�1 What, if anything, can insureds put into writing after

the mediation session? ��9-16Q 9�6�2 Does confidentiality extend to discussions

about coverage and not just the negotiations about settlement? ��9-17

Q 9�6�3 With the mediation process often lasting for months, how broad is the confidentiality protection that insurers may invoke? ��9-18

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Q 9�6�4 If everything is confidential, how does an insured prove bad faith? ��9-18

Q 9�6�5 Does mediation give insurers free reign to try anything? ��9-19

Disclosures about Insurance Policies and Coverage Issues ��9-20

Q 9�7 How much should plaintiffs be told about insurance coverage and disputes? ��9-20

Q 9�7�1 Should plaintiffs be given the policies prior to a mediation? ��9-21

Q 9�7�2 Should plaintiffs be told the specifics about coverage disputes? ��9-22

Q 9�7�3 Does the disclosure of a coverage dispute help or hurt the effort to settle the case? Does it lower expectations? ��9-22

Q 9�7�4 Is there a way for insureds and insurers to attempt to use coverage disputes to their mutual advantage at mediations? ��9-23

Q 9�7�5 What special considerations are involved when plaintiffs and/or insureds attempt to invoke more than one policy year?��9-23

Mediation of Coverage Issues ��9-24

Q 9�8 Is mediation of coverage an express responsibility of the mediator or simply an incidental issue or group of issues? ��9-24

Q 9�8�1 When should the mediator be apprised of the coverage issues and how? ��9-25

Q 9�8�2 Should the insurers submit separate briefing on the coverage issues? ��9-26

Q 9�8�3 Are the coverage issues relevant to all insurers or just some? ��9-26

Q 9�8�4 What is the impact on the mediation when a single insurer has a coverage issue and how does this change when all insurers are united on a coverage defense? ��9-27

Q 9�8�5 Do all coverage issues necessarily implicate settlement contributions by insureds? ��9-29

Q 9�8�6 When are insured contributions appropriate? ��9-29

Conducting the Mediation ��9-30

Q 9�9 Is it better for insurers to be in the same room with the insureds and to break out only when needed? ��9-304t

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Q 9�9�1 Should insurers be allowed to ask questions of the plaintiffs? ��9-31

Q 9�9�2 Should insurers take the opportunity to provide their own perspective about the case? ��9-31

Q 9�9�3 How do insurers feel about two-day mediations? When are they needed and when are they a waste of time? ��9-31

Conducting the Negotiations/Extending Settlement Authority ��9-32

Q 9�10 Who has the last word on offers and strategy? The insurer whose money it is? The insured? Defense counsel? ��9-32

Q 9�10�1 Should insurers ever give blanket authority? Or authority “up to” a number? ��9-32

Q 9�10�2 Should an insurer agree to waive consent and reasonableness? When should the insured ask for a waiver and when should the insurers agree? ��9-32

Q 9�10�3 How candid should insurers be with the mediator about ultimate authority? Can the mediator be trusted? Will the insurer be disadvantaged if other parties are less candid with the mediator? ��9-33

Q 9�10�4 How do specific settlement strategies and approaches affect insurers? For example, are settlement ranges a good thing for insurers? ��9-33

Q 9�10�5 When plaintiffs make a ridiculous opening demand, is the only appropriate response a lowball offer? ��9-33

Q 9�10�6 What happens when insurers heed the mediator’s advice to ignore the demand and to respond with a reasonable offer? ��9-33

Q 9�10�7 When and how should insurers seek to end a mediation? ��9-34

The Impact of Multiple Layers of Coverage—Attachment and Exhaustion Issues ��9-34

Q 9�11 Does the existence of multiple layers of coverage enhance or detract from the mediation process? ��9-34

Q 9�11�1 What is the impact of different coverage at different levels? ��9-35

Q 9�11�2 In what situations are tower-wide contributions appropriate? ��9-35

Q 9�11�3 Are recent case decisions making creative tower-wide settlements more difficult to achieve? ��9-364th

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Q 9�11�4 What is the proper role of an excess insurer in pressuring an underlying insurer to settle or extend authority? ��9-37

Q 9�11�5 Should the mediator enlist the support of excess insurers to pressure underlying insurers? ��9-38

Precedent ��9-38

Q 9�12 When should insurers be concerned that settlement concessions will set a precedent with plaintiffs, insureds and even the mediator? ��9-38

Q 9�12�1 How does the mediator get the case settled while avoiding any appearance of a precedent? ��9-39

Q 9�12�2 What should insurers do when the mediator refers to other settlements and mediations? ��9-40

Q 9�12�3 When is it appropriate or a good strategy for insurers to attempt to rely on other settlements? ��9-40

What to Do If the Insurer Will Not Settle; Assertions of Bad Faith ��9-40

Q 9�13 Should the mediator get involved in assertions of bad faith? As a leverage tool? Merely as information? ��9-40

Q 9�13�1 Can there ever be bad faith within the context of a confidential mediation? ��9-41

Q 9�13�2 Are assertions of bad faith helpful to the process? ��9-41Q 9�13�3 What is the role of policyholder coverage counsel? ��9-42Q 9�13�4 What options are available to insureds when the

insurers will not settle? ��9-42Q 9�13�5 How proactive should the mediator be in pressuring

insurers to settle? ��9-43

Relationships ��9-43

Q 9�14 How does the commercial relationship between insureds and insurers affect the mediation process? ��9-43

Q 9�14�1 How does the relationship between and among insurers (who may be direct competitors) affect the mediation process? ��9-44

Q 9�14�2 What are the roles and relationships between primary and excess insurers in mediation? ��9-44

Q 9�14�3 How does the repeat involvement of the same mediators affect the process? ��9-44

Q 9�14�4 What role do brokers play or should brokers play in the mediation process? ��9-454th

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Q 9�14�5 How does the involvement of the same plaintiffs’ counsel, insurers and defense counsel from case to case affect the mediation? ��9-45

Chapter 10 Recurring Legal Issues in the Mediation of Financial Institution DisputesRichard W. Clary, Robert L. Palmer & Elizabeth S. Lachman

Loss Causation and Damages ��10-3

Q 10�1 What issue is most often the focus of mediations involving financial institutions? ��10-3

Q 10�2 How is loss causation defined in federal securities fraud actions against financial institutions? ��10-4

Q 10�3 What is the standard for loss causation when ruling on a defendant’s motion to dismiss in a federal securities fraud action? ��10-5

Q 10�4 How have different circuits interpreted the standard of proof of loss causation at the summary judgment stage in federal securities fraud actions? ��10-6

Q 10�5 How do the standards for loss causation differ for claims under the Securities Act of 1933 and claims under Rule 10b-5? ��10-7

Q 10�6 Is an affirmative defense of loss causation available to defendants who are sued for violations of state Blue Sky laws? ��10-7

Q 10�7 If a share price drops following a corrective disclosure, but recovers shortly thereafter, can a plaintiff recover damages? ��10-8

Q 10�8 How are damages calculated for claims brought under Rule 10b-5? ��10-9

Q 10�9 How did the PSLRA affect damages calculations for Rule 10b-5 claims? ��10-9

Q 10�10 How are damages calculated for claims brought under the ’33 Act? ��10-10

Q 10�11 How do these legal issues impact the mediation process? ��10-11

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Class Action Issues ��10-12

Q 10�12 Can a class action be mediated to settlement before class certification? ��10-12

Q 10�13 Does the pleaded class definition control whose claims can be resolved in a mediation? ��10-14

Q 10�14 What approvals are required for class action settlements? ��10-14Q 10�15 Can the terms of a mediated settlement of a class action be

kept confidential? ��10-18Q 10�16 What Happens If There Are Large Numbers of Opt-Outs? ��10-19

Multi-Party Litigation Issues ��10-20

Q 10�17 Can an attorney represent multiple clients in the same financial institution mediation? ��10-20

Q 10�18 How can an attorney avoid conflict issues relating to allocation of settlement proceeds and payment issues among multiple mediation clients? ��10-21

Contribution/Indemnity ��10-23

Q 10�19 What are the contribution and indemnification issues if a mediated settlement covers less than all of the potentially liable defendants? ��10-23

“Most Favored Nation” Provisions ��10-25

Q 10�20 Are “Most Favored Nation” provisions in partial settlement agreements enforceable? ��10-25

Complications from Individual (Human) Defendants ��10-26

Q 10�21 Are there special issues for the mediation if some of the defendants are individuals? ��10-26

Choice of Law Issues in Multi-District Litigation Actions ��10-28

Q 10�22 Under whose law should the parties and the mediator analyze the legal issues? ��10-28

Q 10�22�1 How does a federal court sitting in diversity determine the appropriate jurisdiction’s law to apply? ��10-28

Q 10�22�2 What law applies in federal diversity cases transferred to another district? ��10-29

Q 10�22�3 What substantive law applies in federal question cases that are transferred to a different district court? ��10-294th

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Q 10�22�4 Whose procedural rules apply in a transferred case? ��10-30Q 10�22�5 What does this all mean for the mediation? ��10-32

Draft Documentation ��10-32

Q 10�23 What problems can be anticipated in connection with releases in a mediation settlement of financial institution disputes? ��10-32

Q 10�24 How can separate bankruptcy proceedings impact mediating a financial institution dispute? ��10-33

Q 10�25 What are some examples of post-agreement performance obligations that can complicate a mediation settlement agreement? ��10-34

Q 10�26 If an opponent later tries to overreach by arguing about the meaning of a settlement term that was clearly understood by everyone at the mediation, can an attorney insist that the opponent or the mediator testify about these matters? ��10-35

Q 10�27 Does a settlement agreement in a financial institution mediation have to be in writing to be enforceable? ��10-39

Appendix A Practical Guidance from Leading Mediators ��App� A-1

Index ��I-1

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Preface

The mediation of disputes in the financial services context should be recognized by principals and counsel alike as a critical opportunity both to evaluate litigants’ claims and defenses and to craft a creative and tailored result that is often superior to a fully litigated outcome� Unlike informal settlement negotiations among parties and/or counsel, a formal mediation with a skilled neutral offers a confidential, struc-tured environment within which to discuss factual, legal, timing and emotional factors, and to explore a range of business resolutions with-out jeopardizing litigation strategies� Moreover, the mediation process is available throughout the life of a dispute—so it is never too early or too late to explore what settlement possibilities are available or could evolve in the future� This book is designed to guide counsel and parties of all levels of sophistication through the mediation process with an eye toward appreciating the enormous strategic opportunities that mediation makes available�

While this book is specifically designed to address mediations in the financial services industry, the Editors recognize that many of the issues raised and answers provided are equally applicable to the media-tion process in other sectors� That said, there are distinct characteris-tics of financial services disputes that warrant the particular attention and consideration of parties, counsel, insurers, and neutrals mediat-ing in this arena� Moreover, given recent developments in this field, we felt it especially important to disseminate this resource now to parties and their counsel who are handling financial services disputes� For-tunately, many of the country’s most prominent legal players in this arena—lead counsel for plaintiffs and defendants alike—agreed and have graciously contributed chapters rich in substantive content and practical guidance�

We endeavored to organize the book itself, and each individual chapter, in a manner that offers mediation participants an easily accessible guide to navigating disputes in the financial services industry� The fluid nature of the mediation process and the often complex and intertwined issues that arise from financial services disputes made it a challenge, 4t

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in certain cases, to distill responses in the traditional question-and- answer format� Accordingly, where appropriate, some of the respons-es include more extensive consideration of a particular issue�

The Editors also felt it was vital to include viewpoints reflecting con-trasting positions on mediation, as well as highlight areas in which there is consensus among counsel� We believe this approach will help read-ers think anew about what mediation can achieve in the disputes they are facing, and may prompt some novel consideration of other par-ties’ objectives, and the creative roles a neutral can play in bridging gaps� Of course, while cases often present similar themes or issues, each case is ultimately unique� Each dispute presents its own set of claims and defenses, factual circumstances, personalities, competing or related issues outside of the underlying dispute, and so on� We therefore cau-tion users to use this book as a guide and resource, not as a rulebook�

As to structure, our book first considers the threshold decision as to whether to mediate, and then discusses how to lay the groundwork for mediation, identify and agree upon a mediator, and choose a venue� The role of the various mediation participants is then discussed, fol-lowed by important considerations for mediation submissions� This book then offers a detailed explanation of the mediation session(s), and the processes for getting negotiations started, closing the deal where that is possible, and keeping settlement dialogue going where the matter is not resolved in an initial mediation session� In addition, the book explores specific mediation issues concerning auditors, and specific mediation issues relating to insurers� A discussion then fol-lows relating to substantive recurring legal topics that frequently arise in financial services mediations� Finally, the book concludes with inter-views of a diverse panel of leading American mediators who graciously shared invaluable insights and guidance as to successful mediation strategies�

Not all cases can be settled� For various reasons, some matters should or must be litigated to decision� Nevertheless, the mediation issues discussed in this book raise important considerations for lawyers and business people in the financial services industry who are responsi-ble for managing disputes� Ultimately, whether a matter can or should have been settled will require consideration of many of the issues 4t

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identified in these pages� Given the myriad factors that cause and per-petuate disputes in financial services, and the relative lack of oppor-tunity for genuine communication or creative brainstorming in formal litigation, there is great value for litigants in understanding what types of resolution may actually be achievable, what cost, reputational and other damage, may be avoided through mediation, and, equally impor-tant, what information can be gleaned about the parties’ firsthand per-spectives on the dispute—information that can only be secured in the context of mediation�

Whether this book is used as a step-by-step guide, as a reference source when issues arise, or as an overview of the mediation process, we hope that it will help our readers better understand the elements of the dispute they are facing and the real opportunities that may exist to achieve a constructive resolution�

Layn R� PhillipsPierre M� Gentin

Jill R� SperberLindsay R� Goldstein

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