Sheldon Stark
Mediation is an assisted negotiation
Mediation is nothing more than an assisted negotiation; a negotiation is completely voluntary. Negotiations result in resolution, but only if both sides voluntarily decide to manage their risk, recognizing the available terms of settlement are better than spending money and risking a dispositive motion or trial. No judge, jury, or arbitrator decides the outcome. The parties are free to decide for themselves whether to settle and on what terms.
In my view, mediators are most helpful when they manage the exchange of information and perspective, making certain each party has all the information available so as exercise good judgment about settlement.
Mediators explore, inter alia:
• What is the other side’s story and is it plausible? If the other side’s story is plausible, of course, there is risk the court, decision-maker, or jury will be persuaded and rule in their favor. When parties hear the story as spun by a zealous advocate, however, they are often antagonized. They perceive themselves under attack, they escalate, experience consternation. In other words, they respond emotionally, perhaps even lashing out or responding in kind. They do not process what they hear. Mediators help parties process important information and all the consideration due by reframing in neutral language.
• Where is the other side coming from; what is their perspective? Knowing how each side is viewing the conflict increases the likelihood proposed offers and counteroffers can be tailored to meet a party’s underlying needs and interests. If a party’s underlying needs and interests are met, the likelihood of a favorable response to a settlement proposal increases significantly.
• Are the parties assessing their strengths and weaknesses realistically? In my experience, parties (and their lawyers) fall in love with their claims and defenses. What happens when we are in love? We focus only on our strengths and downplay or ignore the warts, challenges and risks, sweeping them under the rug where they are easy to minimize. Parties are often stubbornly convinced there is only one way to look at the salient facts. They strenuously resist seeing even the possibility of good faith alternative perspectives. A major role for mediators, therefore, is to sow the seeds of doubt by bringing out the risks presented and weighing the magnitude of such risks realistically.
• Are the parties aware of the economic costs of continuing the litigation? In my experience, parties rarely arrive at the mediation table fully informed with a detailed written litigation budget. If provided with any range of numbers, they have been given only a rough estimate, discussed mostly at the time the litigation began. In fact, a realistic and timely cost estimate is essential. Why? Business judgment is typically a choice between various available options. Good judgment requires a cost/benefit analysis to determine which option best serves a party’s interest. Assume a party can settle for $25,000, for example, while the price tag on continuing the litigation is likely to be $50,000 or more with no guarantee of a positive result. Sound business judgment might dictate acceptance of a $25,000 settlement regardless of liability or risk.
• Have the parties considered potential collateral consequences? Will the litigation disrupt management’s focus on business operations and contributing to the bottom line? Alternatively, does continuing the litigation risk exposure of confidential, sensitive, private facts? Litigation today is intrusive and may result in disclosure of embarrassing allegations of sexual harassment, corporate mismanagement, flawed engineering, medical malpractice, incompetence and the like. Customers, suppliers, lenders and vendors important to the success of a business enterprise may potentially retreat from a continuing business relationship if they find themselves and their employees sucked into the vortex of someone else’s litigation. Key employees of the enterprise may feel forced to take sides. Members of the leadership team may resign rather than become embroiled in the litigation process. Sometimes collateral consequences can be more costly than direct economic ones.
• What do the parties expect to happen if the case doesn’t settle? How likely is the court to grant a dispositive motion? What is the judge’s track record in similar disputes? Are there other parties whose interests might be affected if a precedent is set?
• Has everyone examined their Best Alternative to a Negotiated Agreement (BATNA) or Worst Alternative to a Negotiated Agreement (WATNA)?
• What evidence – documents, testimony, exemplars - are the litigators relying on to support their claims and defenses; and what are the risks a court will grant a motion to exclude? How does the value of a dispute change if key evidence is excluded? If the evidence comes in? How does an evidentiary ruling impact the chances of success if an appeal is taken?
• Do the parties know what to expect from the trial process? Many lay persons and individuals unaccustomed to litigation have a distorted view of trials – in part because we try so few cases today . Sometimes painting the courtroom picture can remove impediments to resolution: What are the chances of getting a realistic trial date and keeping it? How many times might they need to prepare for a trial only to be adjourned long enough that preparation must be started over each time virtually from scratch? What does a real trial look like as contrasted with the dramas they see on TV or in the movies? A party cannot simply turn to the jury and tell their story. That is not allowed. The story can only be developed through plain, non-leading questions often painstakingly prepared and rehearsed. After direct examination, parties then face relentless, sometimes withering cross examination. If they thought they’d been “beaten up” and abused in their discovery deposition, their discomfort at trial is likely to be worse. What rational actor wants to go through that experience again?
• How likely is a losing party to seek an appeal? What are the chances of overturning an adverse decision on appeal? How much will it cost, and how long will an appeal take? What are the risks the decision of an appellate court will be made public establishing a precedent and perhaps, stirring up additional litigation?
• What are the party’s goals and objectives for the mediation process? What do they hope to gain from engagement in an assisted negotiation? Are their goals and objectives realistic? Have the parties considered what might be required of them in the back-and-forth of a negotiation to achieve their goals? Parties must make reasonable proposals to settle in order to receive reasonable counterproposals in return. Parties are often surprised at the competitive/reciprocal nature of negotiations. Unreasonable demands are inevitably met with equally unreasonable replies; productive proposals often stimulate productive counterproposals in response.
As the answers to these kinds of concerns are heard, considered, weighed, and processed, the parties – with the advice and recommendations of counsel – are ready to make good, business-like judgments concerning resolution. Whether to settle and on what terms is their decision to make, not the mediators, not counsel.
III. Distinguishing features of mediation advocacy
a. Persuade the decision-maker on the other side
The single most important distinction between the mediation process and litigation is that the decision-maker in litigation is a third-party neutral. The decision-makers in mediation are the parties themselves. It only makes sense, therefore, that all efforts to persuade should be directed to the decision maker on the other side. The goal is to persuade the other side to manage their risk and settle, rather than roll the dice. Again, this is because mediation is a voluntary process, even if court ordered. The mediator cannot impose a resolution. Only the parties make that decision. While obvious, too many advocates nonetheless draft their written materials and tailor their oral advocacy to moving the mediator into their corner not the decision-maker.
The obvious question is “why?” Advocates believe persuading the mediator will cause them to take their side and be their advocate in the other caucus room. Depending on the mediator, their belief may be well-founded. However, mediators are trained to resist such efforts. Most of the mediators I know at least try to maintain the appearance of neutrality if not neutrality itself. Mediators are trained to make one side’s arguments in the other room, but translated or reframed into more neutral terms, while maintaining their distance at the same time. “As I understand the argument they’re making ….” Perversely, the very arguments made to influence the mediator cause resentment and escalate emotions in the other room, making the mediator’s job that much more difficult. Parties on the receiving end of overly aggressive written advocacy, for example, often start the mediation by threatening to leave.
Mediation is a dispute resolution process, not a justice process where right and wrong are adjudicated, where a decision-maker determines the truth. The emphasis, therefore, needs to be on the 1) benefits of resolution; and 2) the risks of litigation. Parties will rarely agree on the facts or the inferences to be drawn from those facts. They might very well agree, however, on what the risks are. Risk assessment creates doubt. Doubt creates fertile soil to plant the seeds of resolution. When the risks and perspective are presented with civility and respect in a rational dialog, parties are better able to incorporate important concerns and make rational decisions.
In my practice to lay the foundation for a civil and respectful exchange, I ask parties and counsel to set aside their zealous advocacy and approach the mediation process as “joint problem solvers,” recognizing that everyone has precisely the same challenge: is there an off ramp to the present dispute? Joint problem solvers agree to make reasonable concessions, don’t try to score every point, listen respectfully, attempt to understand the other side’s perspective, and employ the language of diplomacy.
For instance, accusing the other side of lying will generally antagonize the accused, causing a reaction and a likely counterattack in kind, charges of “mudslinging” or both. By contrast, far more effective is the advocate who calmly pulls together the impeachment evidence and presents it this way: “Most cases are won or lost based on who the jury believes is most credible. Here’s the evidence we expect to present to demonstrate that (our client) is more likely to be believed than yours.” A respectful presentation highlighting the risk to good name and reputation can move the needle. On the receiving end, good trial lawyers welcome the opportunity to hear such a presentation in order to learn what they’re up against. Even if mediation doesn’t resolve the dispute, the parties receive value in being better able to prosecute and defend the claims. That said, most disputes do settle at mediation. The very process of a respectful exchange of views plants the seeds of doubt leading to recognition that a good settlement is better than a good case: you can always lose a good case.
b. Exercise the option of speaking directly to the other side
Michigan litigators rarely agree to joint sessions. Most prefer an all caucus/shuttle diplomacy model where the parties may never actually ever see one another. Missed is a rare opportunity to advance client goals and gain valuable insight. Mediation is the only stage in the process where the parties and counsel are permitted – indeed encouraged – to communicate directly with one another. There are many things the parties might say directly to one another, given the chance, which could give them satisfaction and move the dispute closer to resolution.
Regarding advocates, who have the most input into process design, it never ceases to surprise when experienced counsel passes up a chance to make the case or plead their cause and the benefits of settlement directly to opposing parties. With advance planning, they have ample time to prepare their remarks select the most effective language and marshal their points in the most compelling and persuasive order. More significantly, they will have the undivided attention of opposing counsel and client alike. In joint session, talented advocates can reveal how compelling a case they might make to a jury; demonstrate their ability to tell a good story persuasively; and showcase their skills as effective and compelling communicators. In the hands of a mediator trained to manage joint sessions, the environ
When advocates are asked for an explanation of their aversion to joint sessions, typical answers include: 1) “We will only antagonize each other and get everyone’s back out of joint.” True enough where aggressive zealous advocacy is employed. As noted supra, however, mediation advocacy tailored to persuading the decision maker will rarely cause a mediation to go sideways. 2) “We already know their version of the facts.” Perhaps, but rarely put together as a compelling narrative story in a party’s own words previewing what the jury will ultimately be told. Prudent participants in the joint session will listen carefully to see if there is anything new; and to determine how effectively the speaker can communicate their thinking. 3) “My client might slip and make a mistake.” Lawyers who prepare their clients for the mediation process anticipate potential mistakes their clients might make and prepare them to avoid doing so. I’ve presided over scores of joint sessions. I have yet to see a slip of the tongue that made a difference.
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Sheldon J. Stark offers mediation, arbitration case evaluation and neutral third party investigative services. He is a Distinguished Fellow of the National Academy of Distinguished Neutrals, a Distinguished Fellow with the International Academy of Mediators and an Employment Law Panelist for the American Arbitration Association. He is also a member of the Professional Resolution Experts of Michigan (PREMi).
