Hey now, welcome to another edition of the inside BS show. My name is Dave Lorenzo. And today we're talking about dispute resolution, arbitration and mediation.

That's right. We've got an expert here with us today who's going to help us understand which is which. And for those of you who know which is which, and you want the real inside BS, we're going to go in depth on arbitration and explain how it works and why you need to make sure that you are on point when you're in arbitration, even more so than if you're in a court of law.

Please join me in welcoming Elaine Caprio to the inside BS show. Elaine, welcome to the show. Thank you for joining me today.

Thank you, Dave. I'm very happy to be here. All right.

So give us give us your background. Were you were you like a little kid and you were out in the street settling disputes between your friends? How did you how did you get into this? Well, I actually wanted to become a lawyer at a very young age. I was actually 10 years old when I decided I wanted to be a lawyer.

My uncle, I have an uncle, Frank Caprio, who actually has a show called Caught in Providence. He and he at the time was a lawyer and I was really attracted to that type of job. So I went right from high school to college to law school.

And then I started working at Liberty Mutual, which was my corporate job for over 25 years. And I became very knowledgeable about property and casualty insurance. And then something called reinsurance.

And what reinsurance is, just for people who don't know, is that is what insurance companies buy to actually protect themselves. So it's the insurance of insurance companies. So I became rather conversant in reinsurance and started handling for Liberty Mutual disputes between reinsurance companies and insurance companies.

Those disputes are only handled via arbitration. Because many times when businesses have disputes with other businesses, there is a preference not to go into a court of law and to have a confidential proceeding where there are a panel of arbitrators, three, or one arbitrator who are essentially judges. And they are the ones who decide the outcome of the dispute, including what damages are awarded to which party and any attorney's fees or costs.

That's how it works. Okay. So a huge advantage then is that there's no real public record of the arbitration, correct? Many times there is not.

Sometimes there is. And the reason why is that after the arbitration award is given by the panel of arbitrators or the single arbitrator, you can then confirm that award with the court where the seat of the arbitration is. And sometimes when that arbitration award is confirmed, if it's challenged, there are some circumstances you'll find in the courts where there actually are challenges to arbitrator rulings where, for example, a party may make an allegation that the arbitrator was not acting in a neutral way while making the decision.

And so in those cases, and they're far and few between, but they do exist, that's when arbitration decisions do come out in the court system. Okay. So let's talk a little bit about procedure here.

For those who are listening, we have a lot of lawyers who listen, but for those who are listening who are not lawyers, or maybe they're transactional attorneys and they're not familiar with the arbitration process, if there's an arbitration provision in a contract, do you still have to be served with a subpoena in order to appear in an arbitration? How does that work? Or do the parties just contact each other and say, this is a dispute. We can't resolve it through good faith negotiations. So let's initiate the arbitration process under the clause in the contract.

How does it work? Is there service? I mean, how do you start the whole thing? There is no formal service like there is with a court case. How it works is the arbitration clauses, there are many of them that are different, but they all basically say the same thing. And it is that when two parties have a dispute, either party has the right to initiate an arbitration demand, which is essentially a letter that goes to the other party saying, I am initiating arbitration and I am appointing person A as my party appointed arbitrator.

Then typically the other party has 30 days to respond back with their appointment of their arbitrator and they can respond to the arbitration demand at that point. And then the two arbitrators, one for party A, one for party B, then work together to appoint an umpire, who is the neutral seat in the arbitration panel. Now that is, I just gave an example of a three arbitrator panel dispute, which is typical for larger disputes, but every now and then for purposes of efficiency, the parties may agree to forego the three arbitrator system.

And instead of appointing party appointed arbitrators, they both agree to have a neutral arbitrator decide everything. So there's just one arbitrator who's deciding the dispute. And I've had cases where I've been the sole arbitrator.

I've had cases where I've been the party arbitrator for one side, and I've had cases where I have been the umpire or am the umpire. And now it's time for another Sandrowski Business Minute. And here with today's business minute is John Alfonsi.

So John, what is a dissident shareholder? And how can a dissident shareholder action be best handled? So a dissident shareholder is typically a minority shareholder in a privately held company that feels somehow they're either being forced out or the company isn't being run according to what they've otherwise been doing. But as a minority shareholder, they have very few rights. So the only thing they can do is force a sale or a redemption of their interest in the business.

So if somebody feels that the company is otherwise not operating properly or that they've been forced out or otherwise being forced out, say they're also an employee, they've been terminated, and now their stock has to be redeemed. First thing they need to do is contact competent legal advisors. It's generally going to, you know, a lot of these times they can be resolved through negotiations, but you need a good attorney to help with that process.

The other piece is you're going to need a valuation of what your minority interest is in this privately held business. I do a lot of work with attorneys, either as a consultant or as an expert, if it gets to trial and requires testimony, to determine what is the value of that minority interest. In that business for purposes of making sure that that dissident or oppressed shareholder is receiving their fair value.

And that's where the key is in state law terms. Generally, the standard of value is fair value as compared to fair market value. So John, how can people reach you if they have a question about the value of their business, or maybe they have a dissident shareholder in their midst and they need fair value determined for their business? How can they get ahold of you? Sure, whether it's the business or the oppressed or dissident shareholder, you can reach us at our toll free number, 866-717-1607.

Visit our website, cca-advisors.com, or email me directly at jta.sendcel.com. All right, this has been your Sendrowski Business Minute. We'll be back here and again tomorrow with another business minute. Help with anything related to evaluation, you can give John a call at Sendrowski Business Advisors.

Sendrowski Business Advisors is a CPA firm with a different perspective. So if you're, let's say my company appoints you as the arbitrator, you're still neutral even though we picked you. It's just for, you know, in the interest of fairness, both parties get to pick one and then you two agree on the third, correct? Correct.

And what matters in arbitration is what arbitration rules apply. And so, for example, I am an arbitrator with the American Arbitration Association. And the American Arbitration Association has a set of rules and they also have a set of ethical rules that govern arbitrators.

So with respect to the AAA, a party can have input into who they pick as a party appointed arbitrator with the AAA. But once they are appointed and once the umpire is appointed, there is no communication between the arbitrators and the parties. That's the AAA.

And also JAMS, which is another organization of arbitrators, is very similar. Now, in the reinsurance context, there are situations where the party who appoints you can also speak with you throughout the course of the arbitration up until the time of the hearing. So that's where it really depends upon what rules apply with respect to the communications you have with your arbitrator and also how an arbitrator is neutral and impartial.

But in some circumstances, the arbitrator can present the position of the party who has appointed them and still be neutral at the same time. And there's more communications between the parties in the reinsurance context. And which, based on your opinion, this is obviously not fact, which is more likely to result in an expeditious settlement? Is it more likely to work to result in a fast settlement when the appointed arbitrator presents the case to the umpire and the other side? Is that usually quicker? Is that the real benefit of doing that? Well, the end of an arbitration process is a hearing.

So there's two ways that arbitrations end. Well, three ways. One you just outlined, and that would be a settlement.

So a settlement, the arbitration would not be, the arbitrators are not involved at a settlement. That would be between the parties. So the other two ways that an arbitration concludes is, one, there's a hearing and there's evidence presented at the hearing by both sides.

And then the arbitrators deliberate and create a decision. The decision is either what's called a reasoned decision, which is a longer decision, similar to how a judge issues an opinion in a case. Sometimes the decision is an abbreviated decision that lists who won, who won what damages, and or if there's injunctive relief, what injunctive relief is granted.

So that's the award. Or every now and then, the arbitrators may decide on the papers regarding the arbitration award. So there is no hearing.

There's, there are basically motions for summary judgment that are drafted by either side. And the arbitrators decide on those motions for summary judgment. So unlike in the court, if you, if you're, if you survive the motion for summary judgment, then the case proceeds.

That's the end of the case. If they, so you're, you're basically presenting your case and it's either going to be a summary judgment for one side or for the other. With the summary judgment, it's either going to be a summary judgment for one side or it's going to hearing, just like you said.

So it's the same as in a court. Okay. It's the same as in a court.

So basically, if, if the issue is a matter of law and arbitrators are fact finders, as well as applying the law, if there's an issue of law, then it's highly unlikely that a motion for summary judgment is going to be granted. It's the same standard. And the case proceeds to hearing.

Now, what about like admissibility of evidence and that sort of thing? In an arbitration, who decides about the admissibility of evidence? The laws of evidence are relaxed in an arbitration. It's not as strict as being in front of a judge in a courtroom. And again, you have to look to the rules of which arbitration tribunal applies.

Let me give you an example. Arias US is a, an organization I belong to. I am a qualified, I'm a certified professional with Arias US and they have rules.

And in the reinsurance context, there's actually a part of the arbitration clause that says that arbitrators are not bound by strict rules of law. And they can look at custom and practice in the reinsurance industry when making their decision. So that's an example of an Arias rule.

And under the AAA rules, they don't have that clause and they do apply substantive law, but the laws of evidence are relaxed and the arbitrators decide which evidence to allow, and also how much weight is given to that evidence. Because there may be a decision to allow that evidence, but at the end of the day, we're going to be weighing what is the critical evidence that has been submitted to us that is, you know, will decide the case. Yeah, that's really, that's really, really interesting.

Okay, so let's talk now a little bit about how you would, how you would go about picking that umpire. So I appoint you, right? Or our company appoints you and XYZ company appoints their person. And I'm sure you're going to tell me that each of the organizations have rules, but describe for us what the process is like for picking, you know, see, I'm learning quick.

Describe for us the process that you go through in selecting the umpire, because, you know, that could be everything in the case, right? It definitely is. As someone who was a purchaser of arbitration services in my prior life at Liberty Mutual, the selection of the umpire is a very important decision in an arbitration. Yes, there are rules and there are lists, lists of umpires, arbitrators, umpires and arbitrators.

So for example, with the AAA, the AAA may, for example, give a list and say to both parties, you need to pick from the list. And what happens is the parties, the parties arbitrators may decide, okay, we're whittling it down now to two people. And it could be a coin flip about who ends up being the umpire.

Sometimes it's the last digit of the Dow Jones on any particular day. We'll decide, you know, odd or even. With Arias US, we have a whole list of certified arbitrators and certified umpires.

And the arbitrators are actively involved, making recommendations to their parties about who would be a good umpire candidate. And many times in the reinsurance context, the parties are very sophisticated insurance companies and reinsurance companies who have in-house legal departments who know the arbitrators. So they will have a say in who is on the list of umpire candidates.

Sometimes I get umpire questionnaires quite a bit. Sometimes there's a list of six umpire candidates on one side, six umpire candidates on the other side. Both sides get to strike five and that leaves you with two.

And then there's a decision. Oh, that's cool. That's a very, very interesting way to do it.

Talk to me a little bit now about your mindset when you're appointed as an umpire in a case. You're human. How do you make sure that you're always following the guidelines of neutrality? Is there a resource that you can call and you can say, hey, here's what's going on.

I have to rule on this on Monday. I'm going to check with you to make sure I'm applying the law appropriately. Like is there some guidance you can look to as an umpire if your conscience is weighing heavily on you? Well, I think we need to think about it in two contexts.

If you're part of an arbitration panel, there are three arbitrators who are all thinking about that decision. And they're thinking about each of the arbitrators will have an opinion and there'll be a majority decision. It'll either be a majority two out of three or it'll be a unanimous decision regarding that particular motion or hearing decision.

So in those cases, I think it's highly unlikely that someone is calling anyone else at that point. There are AAA rules and areas rules regarding ethics and regarding... Actually, I just took a training course with the AAA about this very issue, Dave, which is everyone has unconscious bias. We know that.

And we've done a lot of diversity and inclusion training in companies. And so I think what I do, what I like to do is you never want to make... You don't want to make snap decisions on anything. I think what I do is I look at the evidence.

I analyze it. I may start drafting a draft opinion and then I'll review the opinion. And then I may revise the opinion.

And it's just a process where at the end of the day, whatever the product is, I feel like I've looked at one side and the evidence that is presented. I look at the other side and the evidence that's been presented and the written decision and everything falls together. That's generally how it's done.

Sure. Now, let's say you're a judge in a court. You'd probably have some resources.

You'd have a court clerk. You'd have like a law library they can do research in to make sure that the lawyers weren't omitting a precedent setting case. That sort of thing.

Do you use similar resources to double check? I mean, you're going to obviously double check whatever the lawyers argue before you. But do you go that step further and look for additional precedent to make sure that everything is on point? Sometimes I do. It depends on, again, the rules.

And it's very interesting. When you have, in the AAA, there are many retired judges who are arbitrators. And you bet that they're going to be looking not only at what the lawyers are putting in their papers regarding precedent.

They're actually doing their own independent research. I think it's a good practice to do that as well. I do not have a clerk to assist me.

And I do not have anyone else to assist us in that regard. Typically, as arbitrators, we have a clerk. We're working alone or in a panel of three.

And that's how we conduct the work. But yes, I do agree, Dave, that many times it really depends upon the issue too. If I'm familiar with the issue and I know the cases and I know the cases are in the brief, then there's no reason for me to go back and recheck it.

What about the... So the judges always have this issue about reversible error hanging over them. So they want to make sure that they're following the rules of procedure. They want to make sure that they're following the rule of law, obviously.

And all the judges that I've met were extremely diligent about that. Nobody's ever cavalier about that. And I got to know you a little bit before the show.

And you seem to be an extremely diligent person. What, though, keeps other people, not Elaine Caprio, other people from not doing their homework, right? So there's no reversible error and nobody's keeping score about how crappy you are. Like what keeps them on the straight and narrow? What keeps them doing that extra work to make sure that they've done the best they can to make a decision in a case? That's an excellent question.

So when you're in an arbitration, you're typically dealing with three things in terms of rules and law. One is I've mentioned many times the arbitration rules. The arbitration rules are key because they're the procedure for the whole case.

Two, state substantive law. There needs to be a determination. Either the parties agree or we decide upon a choice of law decision about what state substantive law applies.

And third, there are state arbitration statutes and or the Federal Arbitration Act. So the Federal Arbitration Act applies when you have parties that are in different states and the dispute is between parties of different states similar to, you know, in court when you have diversity. And in those instances, so the FAA says that an arbitrator's ruling can be overturned for manifest disregard of the law.

So there are many, many cases where parties have tried to overturn arbitration rulings. And it is an uphill battle, I believe, for arbitration rulings to be overturned. But Dave, when someone doesn't do their homework and they're not following the law, or for example, let's say they decide an issue that the parties never asked them to decide.

And that's in the decision. That could be something that could be subject to an appeal, not manifest disregard of the law, but on grounds that the arbitrator was charged to look at a particular issue and decided another issue, for example. So that's how arbitrators are governed through the arbitration process, is that whether an arbitrator is a retired judge or a retired officer of an insurance company like I am, I think we're all interested in, for the parties, having an efficient procedure with industry professionals who understand the subject matter and who reach a result that, because we're industry professionals and we understand the issues better than a judge would in court, is something that the parties at the end of the day will come back and use arbitration again, because whether they win or lose, they know that the arbitration panel has reviewed the issues, reviewed the evidence, and came up with that decision.

Yeah, and it seems just common sense that the courts would want to support arbitration in any way possible because they've got enough cases. It's not like they're gonna go out of business, right? They got plenty to do. So what is the recourse then for one side or the other that feels like, hey, listen, this panel was biased, or the two members of the panel who decided against us were biased, can they appeal it and go to court? Does it depend on the rules of the Arbitration Association? Does it depend on what's written in the contract? How do you figure that out? Depends on what's written in the... Well, most of the time, it's based upon the FAA or the state arbitration rules.

I'm sure the AAA rules might... I'm not certain, but yes, you have to read all of those sources of information to determine what are your potential arguments for appeal. And then of course, making the determination whether or not you're moving forward, you would do research about, has this issue about bias been heard before by the state court or federal court, and how have they decided? So the party's lawyers would be doing all of that research after the decision and then making the decision whether or not to attempt an appeal. Yeah.

Talk a little bit now about what you would advise people to put in their arbitration clauses in their contracts, right? As somebody who does this all day long, or somebody who does this frequently, right? It's not like you're not sleeping because you're hearing cases. You do this frequently. What would you like to see in arbitration clauses that's not there now, or that people commonly forget or leave out? It's a great question, but I do think that the arbitration clauses today are very thorough.

If you're looking at a case that is from 2022, or even from 2016 to the present, they will have most of the terms and conditions that an arbitration clause should have. Now, in the reinsurance context, a lot of these cases are long tail cases and the disputes are from long ago. So you're looking at a reinsurance treaty that was negotiated and signed in the 60s, 70s, 80s, or 90s.

Those are the ones that tend to be more bare bones and you need to supplement using the rules of Arias US or of the American Arbitration Association to have the process move forward. So I guess my answer is these days, from the arbitration clauses that I've seen that are currently in the marketplace, and remember, there are many companies other than insurance and reinsurance companies who use arbitration clauses in either for consumer disputes or for business to business disputes. I think these days they're very comprehensive and there hasn't been anything I've seen that has been missing.

Yeah, I think even in some small business loan documents that I've seen, they have arbitration clauses in them. Now, Elaine, the difference between selecting a three-person panel and a one-person panel, why would I want to write a one person, just a single arbitrator, single arbiter? Why would I want to write that into a clause? Is it just for cost savings? Is that why I would put it in there? Or are there other advantages to only having one person? Because I see a big advantage in having three people. The disadvantage that I see is just the expense.

Is that accurate? Yes, it's accurate. Many times these days, you'll look at an arbitration clause in my industry specifically, and there may be an arbitration clause that for disputes a million dollars and under, we agree to appoint a sole arbitrator, but for disputes a million dollars and above, there'll be a panel of three. So they split it up based upon what the value of the dispute is.

And yes, I think that efficiency and cost are one of the two reasons driving the appointment of a sole arbitrator. And actually, Dave, I want to go back. I want to go back to your prior question about what would I change in the arbitration clauses.

Oh, great. Yeah, let's fix it right up. Let's settle everything right now.

I actually created an article back in 2016 for the quarterly of Arius US, which contains a prototype of a next generation arbitration clause. And I don't know whether you know this, but there's an English rule, there's an American rule and English rule when it comes to attorney's fees in an arbitration. So typically in America, when you hire a lawyer and you're involved in a dispute, you pay for your own attorney's fees and the other side pays for their own attorney's fees, even if you win.

Under the English law, the English rule, if you win, the loser pays your attorney's fees in addition to their own and the judgment. So one of the suggestions that I had made for arbitration clauses, not that it be all, you know, loser pays, but there could be a way to craft a clause that would permit more disputes to be an arbitration if the area of attorney's fees was addressed. Because right now, you know, the reality is if you have a dispute, that's a certain dollar amount and you know that you have to hire lawyers and you have to hire an arbitrator and you have to go through the process, there's a cost benefit analysis to whether or not that case ever makes it to arbitration.

Yeah, so it's interesting that you mentioned that. So that would be in lieu of an attorney's fees provision in the general contract then, right? So the attorney's fees provision in the contract wouldn't be necessary if you decided you were going to go to arbitration and in the arbitration clause, there was an attorney's fees provision. Yeah, there typically is no attorney's fees provision.

Well, yeah, sometimes there is, but you know, the American rule is the American rule, meaning each party pays their own legal fees. Right, right. But many times in an arbitration clause, the arbitrators actually have the power to award attorney's fees after the end of an arbitration to one party, either all of it or a portion, in addition to prejudgment interest and punitive damages.

So the same types of powers that a judge would have in a case. Yeah, so that brings up another interesting question. So there's only a couple of things that I really am a nut about when it comes to contracts before I send them to my lawyer, the attorney's fees clause, and then also the venue provision, the venue clause.

How is venue handled in an arbitration? Well, there are two different ways that it's shown in an arbitration clause. One is there's the so-called seat of the arbitration and that's where the hearing is physically located. So the arbitration clause will always say, and the arbitration hearing will take place in, and it's a location.

But then there's a separate provision that sometimes says, and the substantive law to be applied is, and it'll give you the state. Yeah, yeah, that's one that a lot of people who are listening, if you're listening, you're watching now and you're an entrepreneur and before you sign it, first of all, before you sign any contract, get a lawyer and have a lawyer review it. And if your lawyer is worth his or her salt, they're gonna look at these things for you.

But before you do anything, look at the law that's applied. You'd be amazed at how many people are signing contracts that have venue provisions of the laws of a state outside of their state, 3,000 miles away may apply because that's where the bank that's loaning you the money or the company that you're contracting with is headquartered and they wanna make it convenient for them because that's where all the lawyers are. So I was curious about that from an arbitration perspective.

We're talking with Elaine Caprio. You can reach out to her at 617-833-9576. 617-833-9576.

All right, Elaine, let's shift gears a little bit and talk just briefly about mediation for a minute. Explain for the uninitiated, right? You lawyers take a sip of your coffee and a deep breath because Elaine's gonna explain for those of us who are not lawyers, the difference between mediation and arbitration. And then I wanna ask you a couple of questions about mediation.

Absolutely. So as I previously indicated, arbitration, arbitrators basically take the place of judges. They decide arbitration disputes and their decisions are binding on the parties.

Mediation, alternatively, is non-binding. It's a confidential process. And a mediator is someone who comes in, has a session or sessions with the parties and their goal is to bring the parties together to reach a negotiated settlement.

So a mediator is brought in when parties and or parties and their lawyers on their own cannot negotiate a settlement. A mediator is there to help the parties achieve a settlement. Sometimes it works, sometimes it doesn't.

But the mediator's goal is to bring the parties together if not to resolve the entire dispute, then at the very least to narrow the issues in dispute before the dispute goes to litigation or arbitration. So give us just a quick overview of how you mediate a case. What is the procedure like? Where do you keep the parties separate? How do you uncover all of the issues? Give us your approach to mediation and how you do it.

Yes, it's not one size fits all is the first thing that I would say because every case is different because the relationships between the parties and the lawyers are always different. So for example, there are some cases where you can have an arbitration session and there'll be an initial session where everyone is in the room and one side will give their position, the other side will give their position and then we'll go into breakout rooms and I will go between the rooms first to find out whether there's a settlement offer from one side, then to communicate that and to see whether the parties can get closer together in terms of the number or any other creative ways the parties can utilize in addition to just a number. So that's one way.

Sometimes the parties are so adversarial with one another that session, that plenary session can't be held. And so there are preliminary meetings held before the mediation with the lawyers and with me where we discuss what's going to happen the day of the mediation and there's a lot of preparation work leading up to that date so that I can hit the ground running and go into those separate rooms with the parties and get the mediation started. Now, your role as a mediator is what? What are you looking to accomplish? Obviously you want, your ultimate great outcome would be if there was some kind of a settlement but how do you view your role as a mediator? I view my role as someone who can take a neutral, unbiased view of the dispute and work with both sides not only to determine whether or not the case can be resolved which is the ultimate goal but also to determine if there are other creative ways that the parties can come together for a resolution.

One of the great things about mediation unlike being in a court, in a court, a judge is very limited as to what he or she can rule. There are damages, there's injunctive relief. In mediation, you have all of the creativity at your disposal between two parties who are actually not in court to reach a resolution of a dispute.

And so I try to push the idea of if these are your interests with respect to the resolution of this case, can you think of a way for us to bring the parties together? And as the parties start to think, so there's two ways to do mediation. There's what's called a facilitative approach which I just described. You're actually pulling information out of the parties and the parties are, my goal is to try to get the parties to a closer place where a settlement can be achieved.

The other mediation approach is evaluative and that's where the mediator is actually making more recommendations and commenting on the arguments of both sides to bring the parties together. I tend to use both approaches with sophisticated parties because I think that that approach is actually the most successful, a hybrid approach. And so the results of the mediation, whatever takes place in the mediation, none of it is admissible, right? It all remains confidential.

Yes, correct. Are you as the mediator, are you allowed to talk directly to a party? I mean, their attorney's always gonna be in the room, but can you as the mediator address the party and say, is this what you really want? Can you go to them and ask them questions and explore solutions directly with the party? Or does all the communication still have to go through the lawyer? I mean, for professional courtesy, you probably wanna push as much through the lawyer as possible. But if you're getting close, I mean, there's some momentum there, right? I will certainly ask questions of the direct party with the lawyer in the room.

But the way that I see a case in mediation where the party is represented by the lawyer is that the lawyer is as much my client as the party. And the lawyer is going to be the key to achieving a negotiated resolution of that dispute. So I would not talk to the party alone.

I would definitely talk to the party with the lawyer. And I think that it works out best when the lawyers have trust in the mediator that they've selected. And I think that if the mediator is going off talking with the party without the attorney being there, that's really not a good way to build trust.

Yeah. And I wasn't advocating that you do that. I'm thinking about the lawyer saying something and it just, as a mediator, you're just thinking to yourself, for some reason, this doesn't sound 100% correct.

And you turn to the party and you go, would you explain to me why this is something that you want? You know what I mean? Like hearing it right from the horse's mouth, so to speak. Yes. And of course, in that example, I would speak to the lawyer again, too, once I heard their argument and their description of what they're seeking.

But yes, I would also talk to the party at that point. I think that one of the things that I've learned about mediation is that the parties want to be heard. It's very important.

A good mediator has high emotional intelligence and uses their intuition and could read the room through vibrations, body language, what is said, everything. And many times, a party is just so disgusted with what has happened in their case that they just want someone in authority to hear them out. And then once they've dealt with the past, what's already happened to them, that they have been injured, then we can start talking about, okay, now that we know that this is what happened, let's talk about solutions.

How can we reach a resolution of this dispute that you would be comfortable with? What are you willing to do? And I think that that process is really important because if you don't have a party who's had that opportunity to argue their case like they would in front of a judge, I think they leave feeling very unfulfilled. So we spend a lot of time talking about what happened and having them process what happened before we can move forward. Now, you practice in the Commonwealth of Massachusetts and there's no, if I'm not mistaken, there's no mandatory mediation there, right? Well, the docket system, there are, I'm not certain about which courts, but there are certainly courts who will say either you must go to conciliation or mediation at a certain point in the case or they highly recommend it.

So unlike arbitrators, where arbitrators generally never push mediation, judges, because they have overloaded dockets, will recommend cases go to mediation. In terms of a mandate, I have to say, I don't know. Yeah.

All right. So have you, I'm sure you've experienced cases where the party's just not interested, right? They're going to mediation because they have to, but they're just not interested. What do you do in that case? Well, there's two reasons why a party goes to mediation.

One is because they're interested in mediating and two is because they're interested in getting information to help their case. That's where I was going next. Yeah, you read my mind.

Go ahead. So let's talk about that. That really intrigues me.

So I want to understand what the other side's strategy is, right? So now you as the mediator, can you pick that up that they're just there fishing to see what the other side's strategy is? Yes, at times. But I still think that it's a beneficial process because if the party is there, the party will hear information and their lawyer that they haven't heard in the past. And maybe they are on an information, you know, digging process, but they uncover that the other side actually has a better case than they thought they had.

For example, who knows? You know, I think that, I think the trickiest part about mediation is when to enter into mediation. Is it at the beginning of a case where, you know, that's where someone, a party would be more likely, or party's lawyer would be more likely to do an information getting exercise. Is it at the end of discovery right before summary judgment briefs or right before after depositions are taken? Or is it right before the trial or the hearing? I think that there are critical points where mediation can be successful.

I do think that at the beginning of the case, that's actually the toughest point for parties to agree, to breach an agreement, because there's so many unknowns about the case at that point. Yeah, yeah, that's so interesting. All right, so now let's think for a minute about the mediation process and when the parties are close.

How do you, what is your method for going that last yard, right? Because sometimes it's that last issue that's sticking. What's the Elaine Caprio playbook to get them over that last hurdle? Well, I think in terms of a term sheet, and the term sheet will contain more than just a damage number. It will contain other terms and conditions of the settlement.

So I tend to then focus on what are the other things that you, if the number were the same, for example, what else on that term sheet would make that number more palatable to you? Or maybe it's not. You know, so you need to weigh what exactly are their pain points and where they're willing to give or where they have a little bit of wiggle room. So my job as a mediator is to be very thorough and go through every single point with them to find out what is their flexibility.

And then I'll do that with both sides. And then that's the way that ultimately, when a settlement is reached, everything comes together. It's the mediator's ability to say, I think sometimes having a neutral third party is very helpful because the neutral third party can step back and say, oh, well, this person's interests are A, B, and C, and this person's interests are actually B and C, but then D. And so let's try to, let's try to, if we can, get everyone's interest in some way on that term sheet together.

And that, of course, you know, one of the biggest items is what is the amount of damages that one party is willing to give in the settlement? Okay, so talk to us now about the types of cases that you arbitrate and the types of cases that you mediate. From what you were saying before, you have a heavy, your arbitration is heavily focused on the insurance and the reinsurance industry. Do you arbitrate cases outside of that spectrum? I do.

I have arbitrated banking disputes between small business owners and banks, consumer matters between consumers and large companies. And that's through the AAA because the AAA will not just assign me to insurance and reinsurance cases. They have sort of a broader reach.

But with areas U.S., the cases are insurance or reinsurance related cases. So yes, that's the spectrum. It's business to business mostly.

I have very few consumer disputes. Yeah. What about with mediation? Could you, you know, are there cases outside of that scope that you'll mediate? Yes, yes.

I definitely would be willing to mediate disputes even outside of the business to business realm in the mediation sector. Of course, because my experience is deep in insurance and reinsurance, that is a target for me in terms of future mediations. But I think, you know, knowing insurance and reinsurance and contracts in general, you know, I think the AAA has realized this, has made me, you know, someone who is qualified to look at a dispute and to determine, you know, through a mediation process, whether or not a settlement can be achieved between the parties.

Yeah. And not only that, but insurance is so specific and it's so, there's just so much. It's such a heavy area that they probably, there's probably people who are, they're only going to focus in that area because there's so much work in that area.

And there is, it's such a deep area that if you don't, if you haven't come up in it like you have, it would be tough to, it would be tough to appoint somebody who hasn't. So, which is good because there's, there's no shortage of disputes in the insurance industry lane. So, you know, it's good for business.

I have to say to someone who's in the insurance industry, you would never call it heavy. Okay. Because it's something that's very interesting.

I think people fall into the insurance and reinsurance industry, but once they're in it, we just realize how, what a great industry this is. It really is. It's full of diversity.

In terms of the diversity of work that you have, it's intellectually challenging. The attorneys that you work with and the parties that you work with are pleasures to work with. So, it really is a great industry to do arbitration and mediation.

I recommend it. Well, heavy, the context of heavy is that there's a lot in there. It is complicated.

It involves finances. It involves the law. It involves, you know, state regulations.

I mean, there's just so much. So, in terms of complexity, that's what I was referring to when I said heavy. Not that it's, you know, not that it's a bad industry.

It's just heavy. I mean, it's really, there's a lot going on. There's an enormous amount of complexity.

I want to take a couple minutes before we wrap up. I want to talk about something that you and I touched on before we started the show that is, it's intriguing to me and it seems like it's a passion for you and that's gender equality in the workplace. Share with us some of the things that are of interest to you related to gender equality in the workplace.

Yes. So, I, in the past, I've been a speaker at certain gender equality, well, actually women's conferences and conferences where there've been a focus on gender equality in the workplace, actually gender parity in the workplace. And as a result of being a speaker at certain events, you know, over a number of years, I, especially in the insurance industry, there has not been gender parity when it comes to the amount of board of directors for the companies, just like the rest of corporate America and also with respect to the executives.

So, I actually formed a nonprofit and it's called Executive Sisterhood. I formed it in 2018 and I am slowly getting it off the ground and what I, the mission of the organization is for people to lift women up. How can we, as a community of people, not just women, men and women, advance women into those roles and what are the best ways that we can do that? And so, my vision is to create conferences, podcasts, one-on-one events so that we can all come together, those who have a common interest in advancing this cause and think about the best ways to keep this message going.

As you and I discussed, you know, California Supreme Court had passed a statute mandating that women be on boards and that statute was just overturned by, I believe, the California Supreme Court, excuse me, California Superior Court and that probably will be on appeal. So, right now, states like Massachusetts, my state, are actually thinking about enacting similar types of legislation. So, I think a very good thing that's happening is that there is momentum about adding women to boards so that there is more gender equality on boards.

I think some of the problems with boards in general is that sometimes there are no limits. Someone can be on a board forever. There are no term limits for board tenure, number one.

And two, there are a lot of people who are serving on a number of boards. That's called overboarding. So, there's overboarding and no term limits.

So, I think with those changes and actually opening up, generally search firms are the ones who are looking for these director seats as well as board books that are kept by the organization. The more that all organizations can open up their books and consider women who are not CEOs, because think about it, how many women are CEOs of U.S. companies? You have to go below that to the COO level, to the senior vice president level, and start filling in the director seats so that eventually we get to the point where we're approaching gender parity. We have made progress.

We have a lot more to go. All right, that's great. So, if you're interested in that or anything you heard today from Elaine Caprio, you can reach out to her at 617-833-9576.

617-833-9576. All right, Elaine, I want you to... We covered a lot of ground here. So, I want you to come up with three things people should take away from our time together today.

Three things. I'm going to give you a minute to think about that because I need to let the people who are watching, the people who are listening know that we're brought to you by My Revenue Roadmap Guide. That's right.

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All right, Elaine, what are the three things you think we should take away from our time together today? Thank you, Dave. First thing is, please think of me if you need an experienced arbitrator or mediator to resolve an insurance or reinsurance or contract dispute. Second thing is, think of me because I have unique experience.

I not only was an in-house lawyer for almost 20 years at an insurance company handling these same types of cases. I actually then transitioned to the business side and was a vice president and manager to operational department. So I know both the business side and the legal side with respect to property and casualty insurance.

And third, I used to hire arbitrators and mediators myself. So I know as a former purchaser of these services, what clients are looking for. And I strive to be that when I am appointed as either an arbitrator or mediator.

Thank you. All right, perfect. So if you wanna reach out to Elaine Caprio, here's how you can do it.

You can call her at 617-833-9576, 617-833-9576. I've got her email and her website down in the show notes. Reach out to her today.

Ask her any questions you want about arbitration mediation or even more importantly, call her when you have a dispute and you need an arbitrator or you need help with a mediation. Elaine, thank you so much for joining us today. It was an absolute pleasure having you on the show.

It was an absolute pleasure being here, Dave. Thank you for the opportunity. Alrighty folks, that'll do it for this episode of the Inside BS Show.

We'll be back here again tomorrow with another great interview. I'm Dave Lorenzo. And until then, here's hoping you make a great living and live a great life.