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Arbitration Where Life Imitates Sport: Part 4

Friday, September 28, 2012

In our last 3 entries we described baseball arbitration, how it may apply to probate and family law property matters, and some drawbacks in property and probate settings. We conclude here pitfalls of baseball arbitration in family law support matters.

All Massachusetts family law support statutes have pockets of discretion reserved to the court. In our new alimony statutes, there are many areas where the court may make discretionary decisions and deviate from statutory presumptions and guides, including: the type of alimony, the length of alimony, the amount of alimony, the retirement age cessation of alimony, the impact of cohabitation, the allocation between alimony and child support for tax purposes and income imputation. When applying the child support guidelines, despite their formulaic nature, a judge can exclude income source form consideration, impute income and determine allocation of the costs for “extras”.

As with property, an arbitrator may have a very different “take” on how to allocate income between the parties. A level of creativity may be applied to analyzing support matters, especially in the area of taxation and creation of incentives. Baseball arbitration, where the decision-maker loses the discretion to make an award that has not been proposed by one of the parties, may cost the parties the benefit of a truly objective look at their situation, and a surprising and maybe mutually beneficial result..

Baseball arbitration is not for every probate or family law case, but it bears careful consideration in many.

 

Arbitration Where Life Imitates Sport: Part 3

Friday, September 21, 2012

In our last entry we described baseball arbitration and how it may apply to probate and family law property matters, in encouraging settlement or less extreme forms of bargaining. In Parts 1, we briefly described baseball arbitration and it origins. Now, we begin to consider some drawbacks of this process in the family law and probate law context.

Baseball arbitration was created to address a unique situation: what salary would a player earn for the coming year. The arbitrator is required to compare the player to other players’ pay level and performance. Discretion is limited to deciding whose presentation is more compelling in those comparisons, team’s or player’s. Fairness is not a part of the equation.

Probate cases may closely approximate the baseball context. Both sides feel that they are right, and their outcomes hinge on an assessment of a fact: what did the testator intend? Or, what is the value of the asset at issue? Baseball arbitration may cause contestants to hedge preservation of principle in the name of principal retention, and make offers that are more conducive to settlement or practicality.

Family law cases may fit more uneasily. Property division in most states, including Massachusetts, is based on “equitable” principles. That means that a judge or arbitrator shall do that which he or she thinks if fair, after determination and then consideration of enumerated facts. Those facts are dictated by the legislature, as shaped by the appellate courts. But, what the trial judge or the arbitrator does with those facts is broadly discretionary, so long as function is not abused.

Through discretion, property divisions may deviate substantially from that which either side has offered, because of the human element that is embodied in discretion. In anything so complex as a marriage, there may be many views of that which is fair. The law itself maybe fit uneasily into the facts of a given case, and the judge or arbitrator my be in the advantaged position to ferret out the unique factor in a case that turns in one way or the other, because he or she is not tethered to partisan views and wishes, as lawyers and litigants must be, by definition. There is no question that baseball arbitration may eliminate the deeply human element of discretion that can prevent a miscarriage of justice from occurring. We conclude with support matters in the next entry.

 

Arbitration Where Life Imitates Sport: Part 2

Friday, September 14, 2012

In Part 1, we briefly described baseball arbitration and it origins. Now, we discuss how this methodology may apply to family and probate law cases.

In every probate and family financial case, one party is seeking something that the other party also wants, whether it be a specific piece of property or a dollar sum. Sometimes this desire is expressed as a percentage of a probate or marital estate, or income in the case of support.

When parties try cases, they tend to work from the extremities because they anticipate that the judge or arbitrator might “split the difference”, so a party reasons, “why not stretch the range in my direction? If I ask for more than I really want, I may get what I need”. When both parties do the same, settlement chances diminish and the chance of a windfall/stinging loss increase. Baseball arbitration urges both parties towards to middle, so as to cut the risk of the other side’s proposal being deemed the more reasonable.

The applications of baseball arbitration in the probate and family law contexts may include a dispute over a percentage share of the estate. In divorce, a case that is not a clear cut case for 50-50, parties may be more inclined to stay within a more modest range of disparity such as 60-40, to avoid the risk of losing at a more extreme percentage, if the arbitrator concludes that the spouse has over- reached. In business or other property valuation, wild highs and lows are discouraged. The same principles will apply to probate estates.

In a support matters, the support payor may well offer more to avoid the chance of the baseball arbitrator picking the over-the-top request of the payee, but since the same forces are at work, the support recipient is likely to curb his or her demands for the same reason.

The results: the parties are closer together before trial, so the chances of settlement are enhanced; and the arbitrator is more likely to choose a result that is closer to the range with which both parties can live, and reducing the potential for windfalls/calamitous results. But, there are drawbacks, and we will discuss them in our next entry.

 

Baseball Arbitration - Where Life Imitates Sport: Part 1

Friday, September 07, 2012

A recent article in Massachusetts Lawyers Weekly advanced the benefits of “baseball arbitration” in civil matters generally. It can apply in family law and probate law matters quite effectively. First, what is it?

Baseball arbitration, which literally arose from an MLB labor agreement, exists to resolve disputes about player salaries, but in a way that is meant to encourage settlement before the arbitrator’s hearing. By all reports is extraordinarily effective at doing just that.

Here is how baseball arbitration works. The sides each submit an offer, the player the higher salary, and management the lower. The arbitrator, after hearing, has limited authority: he must pick one. He may not award any other salary.

The effect of this high-risk methodology is to push the two sides as close together before the hearing starts as possible. In the player’s case, he fears that if he asks a ridiculously high salary and the team’s offer is within the mainstream of results for similar players, the arbitrator will find for the team; and the reverse is true for management. The result is smaller gaps, and except on rare occasions, settlement.

We will talk about how this may apply to family and probate law disputes in our next entry.

 



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