Take away everything that is not required to be provided by a parent. No phone, tv, iPod, computer, allowance, or going out. Require to be spoken to and treated as they want to be.
I would discipline them by taking away something that means alot to them. Television, Video games, whatever they like doing. I would take it away and stick to your discipline or they might not be mindful for a long time knowing that you will cave agian.
The best way is to set boundaries and limitations of what is acceptable, and to enforce consequences when the 12 year old steps over these bounds. When deciding what these rules might be, you may want to have a conversation with your 12 year old on the reasons why.