Resolving Disputes through Mediation

Mr. Betts serves as a mediator in a wide range of disputes – including commercial litigation, business disputes, employment discrimination, trade secrets and restrictive covenant litigation, banking litigation, claims arising from the sale of insurance products and variable annuities, securities and investment-related litigation and FINRA arbitrations. Mr. Betts is on the approved roster of mediators and ADR neutrals for the U.S. District Court for the Western District of Pennsylvania. He also has been approved by the Court to serve as an E-Discovery Special Master. Mr. Betts also is on the American Arbitration Association’s national arbitrator panel for commercial and consumer cases and he is certified by FINRA Dispute Resolution to serve as a mediator and arbitrator in connection with FINRA arbitration cases.

For mediations in cases pending in the U.S. District Court for the Western District of Pennsylvania, Sections 3.1 through 3.10 of the Court’s ADR Policies & Procedures apply to the mediation process.

Mr. Betts is experienced in conducting mediations “virtually” at the parties’ request, and when consistent with court rules.

Understanding Our Approach To Mediation

Mediation is a highly effective form of alternative dispute resolution. Mediators employ various approaches and styles, including “evaluative” and “facilitative.” Mr. Betts draws upon his nearly forty years of experience in exploring the resolution of cases to tailor the approach that is best suited for the case at hand and that will maximize the potential for settlement. Mr. Betts generally prefers to use an evaluative style, through which he assists the parties and their counsel in objectively and realistically evaluating the strengths and weaknesses of their positions and in recognizing the considerable risks and expense associated with ongoing litigation. Many parties, and even their counsel, enter the mediation process with polarized positions, having become entrenched with the perceived strength of their claims or defense and a belief that if the case proceeds to trial or final arbitration hearing that they are destined to prevail. Mr. Betts’s effectiveness as a mediator and his success in settling cases stems in large part from his credibility with parties and their counsel in encouraging them to recognize and account for the risk of an unfavorable outcome if the parties do not achieve settlement. A settlement, while likely not representing an ideal outcome for any of the litigants, has the advantage of providing all parties with a self-determined outcome.

In employing an evaluative approach to mediation, Mr. Betts enters every mediation session fully prepared to discuss the factual and legal issues the case presents. Mr. Betts’s thorough preparation allows him to evaluate and discuss the issues in the case in an informed manner. In using an evaluative style and in substantively engaging with the parties and their counsel concerning the factual and legal issues of the case, Mr. Betts avoids the “cookie cutter” approach regrettably used in many mediations where the role of the mediator is reduced to shuttling settlement proposals back and forth between the parties.

Decision Tree Analysis

A factor contributing to Mr. Betts’s success in helping parties resolve disputes through mediation is his use of decision tree analysis. Decision tree analysis is a method to identify and visually outline the potential outcomes, costs and consequences of complex decisions. In the context of litigation, decision tree analysis is a valuable tool in identifying the range of potential outcomes for particular issues and the probabilities of each and, ultimately, after accounting for those various probabilities mathematically, determining the reasonable and realistic settlement value of a case. In addition to the use of decision tree analysis in connection with litigation, decision tree analysis also is an established decision making technique in other fields, including business planning, engineering and, notably, in healthcare. See “Decision Trees: An Overview and Their Use in Medicine,” Journal of Medical Systems (Nov. 2022)(abstract stating in part that “Decision trees are a reliable and effective decision making technique that provide high classification accuracy with a simple representation of gathered knowledge and they have been used in different areas of medical decision making.”). An informative article discussing the value of decision tree analysis in resolving legal disputes is Robert Copple’s “How to Handicap a Lawsuit: Decision Trees and Probability Analysis.” For an excellent discussion of the use of decision tree analysis in litigation, see Marc B. Victor, “Decision Tree Analysis: A Means of Reducing Litigation Uncertainty and Facilitating Good Settlements,” Georgia State University Law Review, Vol. 31, Issue 4 (Summer 2015).

Many parties – particularly corporate executives in commercial litigation matters and business disputes – prefer the disciplined approach provided by decision tree analysis, as contrasted with simply relying on their and their counsel’s intuition concerning the value of the case. Accurately determining the reasonable and realistic settlement value of a lawsuit can be extremely challenging, and as a result many claims are significantly over-valued or under-valued in the course of mediations and settlement negotiations. Litigants and their counsel, even in large, “high stakes” cases, often determine settlement value through intuition or instinct (i.e., qualitatively). The use of decision tree analysis and other available tools offers an opportunity to employ a quantitative approach in determining the reasonable, realistic and objective value of asserted or threatened claims.

Decision tree analysis has been endorsed by many judges. In Reynolds v. Beneficial National Bank, 288 F.3d 277 (7th Cir. 2002), for example, the Court of Appeals for the Seventh Circuit, in an opinion authored by Chief Judge Richard Posner, reversed a trial court’s approval of a consumer class action settlement - in the amount of $25 million - and ruled:

The [trial] judge approved the settlement primarily because he thought the prospects for the class if the litigation continued were uncertain. They might lose in the end, or win little; and even if they won a lot, the delay in winning would make the relief eventually awarded the class worth much less in present-value terms…. All this is true, but … the judge should have made a greater effort (he made none) to quantify the net expected value of continued litigation to the class, since a settlement for less than that value would not be adequate. Determining that value would require estimating the range of possible outcomes and ascribing a probability to each point on the range…. [O]ur point is only that the judge made no effort to translate his intuitions about the strength of the plaintiffs’ case, the range of possible damages, and the likely duration of the litigation if it was not settled now into numbers that would permit a responsible evaluation of the reasonableness of the settlement.

Id. at 284-85. Although the courts have adopted various approaches concerning the manner in which courts are to evaluate the adequacy of class action settlements, a number of other courts have endorsed decision tree analysis as an effective method for determining the settlement value of cases. E.g., Bailey v. Paradies Shops, LLC, No. 2:20-cv-2610, 2021 U.S. Dist. LEXIS 155602, at *10-11 (S.D. Ohio Aug. 18, 2021)(settlement of collective action under FLSA approved, with the court noting that “Plaintiff’s counsel used decision tree software ‘to calculate an expected value by compounding multiple points of potential risk and applying those values to the damages model’”; in holding that the parties had conducted a sufficient investigation concerning an appropriate settlement value for the case, the court found that the use of the decision tree was “[o]f specific importance … to guide the parties’ risk-understanding and evaluation”); Leung v. XPO Logistics, Inc., 326 F.R.D. 185, 196 (N.D. Ill. 2018)(following Reynolds and observing that courts measure the strength of a plaintiff’s case by determining the “net expected value” to the class of continued litigation); Brinckherhoff v. Texas Eastern Products Pipeline Co., LLC, 986 A.2d 370, 392 (Del. Ch. 2010)(court approved a settlement of shareholder derivative claims, relying in part on an expert’s valuation of the claims based on decision tree analysis); see also North River Ins. Co. v. ACE American Reinsurance Co., 361 F.3d 134, 138 (2d Cir. 2004)(in connection with a $335 million settlement of an insurance coverage dispute, the court observed that in determining an appropriate settlement value “North River also utilized decision tree software, which incorporated consideration of coverage parameters and various potential defenses to Owens-Corning’s claims, then applied probability weights to obtain different damage scenarios”).

Of course, the ultimate settlement value of the case, as determined by the decision tree software, does not necessarily dictate the settlement positions to be taken by the parties or the amount at which the case should settle; but it can serve as a very helpful guide to the parties and their counsel in formulating settlement positions and in appreciating the risks of potential adverse outcomes.

FINRA Mediations

Mr. Betts has extensive experience with FINRA arbitrations, and is a certified FINRA arbitrator and mediator. Mr. Betts is familiar with the factual and legal issues that frequently arise in connection with both “customer” and “industry” arbitrations. In private practice, Mr. Betts has represented not only investors but also brokerage firms and securities professionals, which allows him to bring an impartial and objective point of view to every case. Mr. Betts can handle FINRA-related mediations in-person or virtually. When requested to do so, Mr. Betts will travel to mediations to meet with the parties and their counsel, and he does not charge the parties for his travel time.

Reasonable, Transparent Rates

Mr. Betts’s fees for mediations are based on a $400 hourly rate. When engaged jointly by the parties, which is typical for mediations, the fees are spread equally between or among the parties or according to any other allocation to which the parties have agreed.

In the interest of efficiency and cost-effectiveness, particularly when travel is involved, Mr. Betts is amenable to conducting mediations virtually.

There is no fee charged for canceling or rescheduling a mediation session.

Scheduling a Mediation with Michael J. Betts

To schedule a mediation session or for additional information about the alternative dispute resolution services provided by Mr. Betts, please contact us by telephone at (412) 935-7073 or online.