This is a continuation of last year’s reflections on mediation practice, which are available as a free e-book on the Brice Mediation webpage.
- Who chooses the mediator?
- Credible objectivity.
- Bidding against oneself.
- Pre-planned negotiation limits.
- In good faith.
- Co-party positions: The relevance of relativity.
“Other Peoples’ Money.” Almost everyone finds it easy, or at least less painful, to spend other people’s money. In the context of mediation, this can mean that contributions from co-defendants can create a settlement fund that satisfies the plaintiff(s) without crushing any one defendant. In other words, it is sometimes wise to use a co-defendant’s contributions to achieve an overall settlement, rather than create a litigation posture that leaves only one target defendant to carry the burden of defense, settlement or judgment. Insurance coverage disputes, indemnity disputes, and liability disagreements can create situations in which one party might agree that a claim ought to be settled, but still think that the settlement ought to come from someone else’s money. A binding settlement agreement requires actual authority for the funding committed to the compromise, and usually it is only the entity expected to provide the funding which can provide the authority for the agreement. As a result, potential insurers, indemnitors, or others at interest are usually essential participants in mediation, even if not formally parties to a dispute.
“Overcoming Opponents’ Positions, without Making Enemies.” There is a difference between pressure and persuasion. There is a difference between capitulation and compromise. The keys to successful negotiation are preparation and objectivity. While the emotional force of a party’s personality ( or an attorney’s ability and/or style ) can affect decision making and the perception of progress ( or not ) in negotiation, objectively those are merely additional factors to be considered in evaluating not only the cause of action under consideration, but also the likelihood of achieving an agreement in mediation. Preparation gives one the wherewithal to “push back” when necessary, and objectivity permits reference to the value-affecting factors in the case, positive or negative, without being controlled by personal pre-dispositions or antipathies. Yes, strength of will on one side or the other is always important and sometimes dispositive of the settlement decision. Objectivity as to facts, law, forum and advocacy permits a reality check in real time rather than having to confront that reality only in hindsight. Even if one’s opponent can’t (or won’t) change perspective fast enough on a mediation day to permit a compromise, objective reality usually affects everyone’s evaluations as time permits those realities to sink in to our understanding of the case. Mediation is helpful in this way to both sides, even if compromise is not immediately achieved.
“Effective Results Without Winners or Losers.” It is said that differences of opinion are what make a horse race. It’s probably true about starting trials and taking verdicts, too. From the mediation point of view, it is worth observing in this context that it is absolutely not necessary for the parties to agree on the details of a dispute, in order to make a deal for the compromise or settlement of the overall claim. If an agreement works for both sides, it’s perfectly ok if they have different reasons for making the deal, whether litigation risk, cost of handling, witness or evidence availability, timing of recovery, or many others. The fact that resolving the dispute at the time of settlement works for both sides doesn’t mean that one side or the other won or lost; it just means that the dispute was effectively resolved and over with. This doesn’t necessarily mean that the elusive “win-win” solution was achieved, because both sides frequently go away after a settlement a little unhappy. It is, after all, usually a compromise for both sides. Sometimes with hindsight, one side or the other may be more pleased with the settlement than the other, but in fact there were objective reasons for the settlement at the time of the settlement.
“The Power of No.” Attorneys or parties experienced in negotiations, even or especially in mediated negotiations, sometimes feel that the momentum of the mediation leads them beyond their intended final position, just to reach an agreement. This is, of course, frequently a good thing, meaning that the parties have learned something about the dispute during or from the mediation process. It is by no means inevitable, however, because either side is always able at any point to make the professional or business decision to say a good, strong “No.” Remember that a mediation is to some extent a testing of the value of the case, from each side’s point of view. The plaintiff’s objective is not to leave one cent on the table that he or she might have recovered; the defendant’s objective is not to pay one cent more than he or she absolutely had to pay in order to achieve resolution. If the negotiated gap between the parties’ respective positions has become small, it can be recognized by both sides that an intermediate compromise makes practical sense, whether at a midpoint or otherwise, because no one can call them that close. At other times, however, when the gap is relatively wider, a party may not believe he has reached his best position until the other party just says “No,” and means it. A party must be prepared, and objectively in touch with reality, in order to say No effectively, but it is frequently the most powerful way to persuade one’s opponent to reconsider his objective in the negotiation.
Engagement in the process: A good mediator is hard to find, but you ought to be able to count on the lunch. One of the advantages of mediation is that it causes otherwise busy attorneys and parties to prepare and concentrate on the dispute in question. One of the reasons mediations fail, at least on the mediation day, is that someone is too distracted from the case at hand to make the hard decisions that have finality. Another is that the person attending doesn’t have sufficient knowledge of the case or decision-making authority to act on the opportunities that may arise. Maintaining concentration is a function of the lunch and other physical support elements, such as coffee service, WI-FI internet access, copy facilities, but it is also dependent on keeping the negotiation moving along. Even if a party encounters delay in formulating a position change, for whatever reason, it is important to keep both sides informed that the delay is for some reason necessary and that it will hopefully be productive. Mediation is an opportunity – maybe the best opportunity—for both sides to test their evaluations of their respective cases. Issues such as lunch, communication with decision-makers, or other non-substantive matters should never be permitted to become distractions from that opportunity.
Exceeding predictions or short-falling expectations. Auction sales of art objects, or livestock, or vintage automobiles, or salvaged property, sometimes reach unanticipated results. The sale result turns out to be either more or less than estimated before the auction. The same can be true in mediations, with the added element of newly discovered (or produced, or emphasized) information frequently having the potential to change a party’s pre-mediation estimate of value. This is part of the process. The closer the case is to trial, the fewer the instances of new information should be, but the opportunities for reflective reconsideration of that information are fewer also. Unanticipated results are not a weakness of the mediation process, nor do they indicate a lack of negotiating discipline. Whether for reasons of practicality, change of information, revised understanding, or whatever, there will have been a reason or reasons for any significant variation from estimated values. The challenge is to have decision-makers available on both sides to take advantage of the opportunities reflected in the revised valuations encountered at mediation.
© W. Robins Brice 2015. Republication freely permitted with attribution.