ADR Spotlight: Trust and Trust Busters

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 Trust is essential in any resolution

I, and I know many other mediators, believe trust is essential in any negotiation or mediation. (In this article I will use the term negotiation to encompass both negotiation and mediation, since mediation is negotiation with a third party neutral). There are many reasons negotiating parties need trust. Below are a few of the key reasons I have encountered.

You need trust simply to get parties to the negotiating table. If the one side thinks the other is only using the negotiation to stall or to find out their weaknesses, the negotiation may never get off the ground.

Once you do get to the table, you need trust for the other side to really talk to and listen to you. The first thing that occurs at the table in a good negotiation is sharing information. If one side does not trust the other side, however, they will not open up to share information with the other. Even if one side does open up, the other side will not listen to or believe the information and will not reciprocate with information sharing if there is no trust.

You need trust in order to get concessions from each side. In a principled negotiation, the goal is not to simply squeeze or force as many concessions out of the other side as possible. The goal is to meet as many interests of both sides as possible. This is done by either finding alternative ways to meet both sides' essential needs by creating new options or by conceding when you have good reason to do so and by giving the other side reasons to make concessions as well. However, in order to make these concessions or to look for alternative solutions most parties need to (A) see a reason to do so and (B) feel comfortable (i.e. TRUST) that the other side will reciprocate with similar movement.

You also need trust to address the intangible interests at the table. If, for example, an apology is offered but not believed, it can do more harm than good. On the other hand, if a party trusts that an apology is sincere, the apology can address a plethora of interests that money could not.

Finally, you need trust in order to close the deal. Many negotiations conclude with basic terms agreed to, leaving the details to be hammered out later, possibly because the people needed to craft the final terms are not at the table or simply because it is a more efficient use of everyone's time. In some cases it may be that all contingencies simply cannot be pre-determined and all parties understand that some issues will arise in the future that the parties have to trust will be resolved in accordance with the spirit of the agreement. When this is the situation, those entering into the agreement at the negotiation table have to trust that those issues will be worked out satisfactorily down the road.

Building trust

The Prisoner's Dilemma

There is an exercise used by many mediators to teach the impact of trust in negotiations called the Prisoner's Dilemma. Individuals are paired up or two teams of 2 or 3 people are paired up. Each person or team of players is given one Y card and one X card. Then each team or person is asked to play (i.e. put face down in the middle of the table) either an X or a Y card. When directed to do so, the players turn their cards over to show what they played. There are usually 7 or 8 rounds of play. There are three options that can result:

Option 1: Both parties play Y (YY)

Option 2: Both parties play X (XX) or

Option 3: One party plays X and one plays Y (XY)

If the teams play Option 1, each side gets +1 point and both have a win-win.

If the teams play Option 2, each side gets -1 point and there is a lose-lose.

However if the teams play Option 3, the player playing an X gets +3 points and the player playing a Y loses -3 points. Therefore, although, looking at Option 2 in a vacuum it would appear you would not want to play an X, option 3 reveals that if you can somehow get the other side to play a Y, you can win big by playing an X. However, your opponent who plays a Y not only loses big, they also lose trust in you.

So a few different patterns usually emerge. Players sometime try to "cooperate" and both play Y's right from the start. When both players appreciate the value of a win-win, the pattern of YY play may last throughout all rounds, resulting in a net win-win. However, sometimes, one player seeks to be cooperative by playing a Y, but the other side plays an X. Trust can be lost immediately with the person who played a Y immediately resorting to an X in the next round or trust can be lost over a few rounds. Either way, if the Y player loses trust and the X player does not change to Y's (i.e. become more collaborative), both usually end up playing X's and both lose. However, if 2 teams start with an XY play, the player playing an X should see that his X plays have led the Y player to change to playing X's and realize that both sides are in a lose-lose situation. Hopefully, this will encourage the player playing an X to change to play a Y and, if the original Y playing team begins to trust the other team, they could end up playing YY's and both have a win-win. Unfortunately however, their scores will probably not be as high as the teams playing YY (i.e. trusting) from the start.

So what are the lessons from this game? It pays to try trusting from the start, i.e. play the Y cards. If you see the other side is not reciprocating with trusting moves after a round or 2, you can always move to X (and have a small lose-lose: -1 and -1), thereby protecting yourself from large losses (i.e. -3 points). However, you might want to play a few rounds of Y's (i.e. show yourself to be a collaborator) before converting to playing X's because if you can build up trust with the other side (i.e. get them to play Y's) you can have a win-win instead of a lose-lose.

In negotiation this means it is usually best to start out collaboratively. Send signals by your actions that you are seeking a win-win. If the other side does not reciprocate immediately with cooperation, try again (although not with an essential issue) to signal cooperation versus antagonism. Hopefully, your opponent will eventually see that you can be trusted and act collaboratively in return. However, if not, let the other side know by your actions: "If you don't start cooperating, I will not continue to be cooperative and we will both suffer a lose-lose." Then do what you need to do to protect yourself unless and until your opponent sees the futility of both of you losing and signals by their actions that you can trust them to behave cooperatively going forward.

The apology

There are often times when, until a sincere and appropriate apology is made and accepted, no trust is possible between parties that feel disrespected or hurt or taken advantage of by the other party. This situation may arise when, for example, a company manager harassed an employee and the company was slow to respond. Or it could arise in a divorce where one spouse was unfaithful to the other. It might arise between contracting parties where Company A failed to fulfill the obligation as Company B expected and trusted Company A to fulfill it. In these and many other situations, it may be that a good apology can go a long way in building trust.

So how do you give a "good apology?" First, the person giving it has to really be willing to give it because they truly feel some remorse about the situation. This feeling of remorse does not have to include any admission of liability. In fact, in medical malpractice cases, for example, there is a statute in Michigan that protects statements of empathy or regret for a loss or injury in a medical situation from being introduced at the trial of any related medical malpractice case as an admission of guilt.

Second, you need to be as sure as you can be that the person to whom the apology would be made will be receptive to the apology. This is important because if the potential recipient of the apology is not receptive to it, their rejection could undermine trust and push the parties even farther apart.

If you have a mediator in your negotiation the mediator might "take the temperature in the other room" and try to get a sense of how receptive the other side would be to an apology. Otherwise, the attorney for the would-be apologizer can look for verbal or non-verbal cues that the opponent would be open to an appropriate apology.

Third, you need to be sure the right person is making the apology. In many situations it may be good for the party to make the apology since that is the person who the recipient of the apology likely sees as the "culprit." However, if the party is not comfortable, not empathetic, not articulate or not available, perhaps a truly empathetic and articulate attorney should give the apology. It varies from situation to situation, but the point is to consider the overall efficacy of the speaker before deciding who should apologize.

Further, you need to be sure the wording of the apology is appropriate. In a divorce case with an unfaithful spouse, admission of the act of infidelity might be needed and not too harmful to the apologizer. In a med mal case the apology might focus more on regret for what the patient and/or his/her family had to go through, without admitting fault. While it is important what you say, it is just as important what not to say. For example, you rarely make an effective apology if you say "I am sorry if you (the other side) are upset." Of course, a family who lost a loved one in what was to have a simple appendectomy is upset. A statement like this will only anger the other side more. Similarly, you want to avoid statements like "I am sorry but if you hadn't been such a nag I wouldn't have had to seek a mistress." This kind of statement that turns the blame around on the recipient of the apology will only hurt any chance of building trust between the parties. Lawyers or mediators should ask to hear from the party offering to apologize what the apology will sound like before unleashing that party on the opposing side with what could be a disastrous apology.

Finally, the timing of the apology is critical. For example, if a defendant apologizes right after or before a lowball offer, trust building is unlikely to happen because the plaintiff will likely presume the apology was merely intended to induce the recipient of the apology to accept a less than reasonable offer of settlement.

In short, apologies can be a powerful tool in building trust if sincere, well received, and given by the appropriate person, with the appropriate language at the appropriate time. So don't be afraid of apologies. Simply take the time to make sure your apology is the right thing done the right way.

Trust busters

There are many acts that can undermine trust in a negotiation. Since time and space are limited, I will only focus on a few that I see frequently in negotiations.

Regressive moves without explanation

One of the worst things a party can do in a negotiation to undermine trust is to make a regressive offer. This means moving further away from the other side's demand or offer rather than closer to it. For example, a plaintiff who demanded $400,000 in their complaint but starts off at the negotiation table with a $500,000 demand has made a regressive move. Alternatively, a defendant who initially offered $50,000 but makes their next offer $30,000 has made a regressive move.

Obviously the recipient of the regressive move will usually respond with a cry of "bad faith negotiation." They will say, "I thought we came here to meet somewhere between our respective numbers and now you move further away! How can I trust you?" If the other side is negotiating in bad faith, this kind of regressive move will quickly bring the negotiation to an end.

But perhaps the regressive offer was not made in bad faith. Maybe the regression was precipitated by the discovery of information that made the initial offer or demand unreasonable. For example, in a case where the injury to the plaintiff in an automobile case was first believed to be minor, it is discovered that the injury is much more severe and permanent than originally believed, prompting the plaintiff to increase their demand. Similarly, in a breach of contract case, the losses attributable to the breach could be discovered to be less extensive than originally thought, thus inducing the defendant to reduce their offer.

When we look more closely at the situation, it is possible that, with the sharing of information (and an honest explanation of why this information was not discovered sooner), both sides could agree that a regressive move is appropriate. However, the key is to start out by sharing the new information and explaining how and when it was discovered, then following with a statement of how this new information has led to a change in the party's offer or demand. In short, do not make regressive offers if they are not warranted, but if they are, lead with the information they are based on in order to avoid the regressive move destroying any trust built or chance of building trust in your negotiation.

Misinterpreting attention to detail or cautious style as mistrust

Especially when parties had had a relationship before their dispute arose or have some other reason they believe warrants their being trusted by the other side, a call for documentation of agreements on every detail in the settlement can often undermine trust. For example, in divorce situations, parents may both want a college education for their now minor children. Consequently, the husband-knowing the law does not require a parent to pay college tuition-asks for an stipulation to a term in the Divorce Judgment that each party will pay 50% of each child's college education. The wife is offended. She responds that she has always contributed fairly to the children's needs, but given the economic uncertainties in her line of business she cannot commit to any specific amount or percentage at this time. She concludes by saying to the husband "You will just have to trust that I will do all I can."

The husband then has two choices. He can interpret her refusal to commit as a sign that he cannot trust her-leading him to fight her harder on other issues such as child or spousal support. Or he can recognize that, while his nature is to have every "i" dotted and "t" crossed, his wife has never liked to be pinned down on details. Yet she has, as she stated, always contributed fairly to the children's needs. Thus, by seeing her response as a difference in style rather than as indicia of untrustworthiness, the husband maintains the trust that the parties have and avoids unnecessary acrimony in the negotiation.

Refusal to acknowledge other side's strengths

At negotiations everyone wants to focus on their strengths and the other side's weaknesses. The obvious purpose of this focus is for each party to support their lowest offer or highest demand. However, the reality is that after initial offers and demands, every negotiation involves movement or concessions. Both sides should expect that these concessions will occur. However, all parties should require good reasons for their movements or concessions.

One good reason for movement in a negotiation is acknowledgment of the other side's strengths. It may, initially, feel like capitulation or a sign of weakness to acknowledge the other side's strengths, but in reality it helps the negotiation. It is a given in a negotiation that each side has some strengths. If you did not believe the other side had strengths, you probably would not be at the negotiation table. Simply, it would make sense to try the case if you thought you had no reason to lose at trial. So given that each side has some strengths, why not be honest and acknowledge them? This way, rather than insulting the other side and making them distrust you when you doggedly deny the opponent has any chance of prevailing on any issue, you can acknowledge the possibility of strengths on both sides. Moreover, you can use the acknowledgment of a strength the other side may have as a basis for one or more of you planned concessions. This makes your concessions have a basis in an objective factor rather than appearing arbitrary. When your concessions are viewed as based on a good reason (e.g. an acknowledgement of the other party's strength) your opponent will not expect future concessions from you unless good cause has been shown for additional concessions. This makes the negotiation less of an arbitrary exchange of numbers and more of a principled pursuit of ways to meet each party's true needs given the realities of each side's legal, factual and subjective strengths and weaknesses.

Moreover, if you acknowledge your opponent's strengths, you encourage them (lest they look dishonest) to acknowledge your strengths in return. Having that acknowledgment then gives you a tool to demand a concession from your opponent.

In short, if you refuse to acknowledge the other side's strengths in a negotiation, not only are you destroying the other side's trust in you, you are depriving yourself of a tool that can give you more control over your negotiations. Be honest in acknowledging your opponent's strengths and require reciprocal acknowledgments of your side's strengths. Then use those acknowledgments to your advantage.

Conclusion

Although many attorneys view trust as a sign of weakness to be avoided, it is in fact a necessary and valuable goal to be sincerely displayed, promoted, and not undermined. Once you understand and acknowledge its importance, work on building it in your negotiations. You will see exponentially better outcomes as a result.

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Antoinette (Toni) Raheem is the principal attorney in Law & Mediation Offices of Antoinette R. Raheem. After 25 years as a litigator, she now works exclusively as a mediator and arbitrator applying ADR to business, employment, tort, civil rights, domestic and educational conflicts. She is past chair of the State Bar of Michigan ADR Section. Raheem was a founding member of PREMi (a collaborative of experienced ADR Professionals, http://premiadr.com/), as well as a founder of the ADR Committees of the Detroit Metropolitan Bar and Federal Bar Associations. She was appointed by federal judges in the Eastern District of Michigan to mediate cases related to the 2014 Detroit Bankruptcy. Raheem is a graduate of Princeton University and Columbia Law School, a former federal court law clerk and former partner in the Detroit law firm of Honigman, Miller, Schwartz, & Cohn.

Published: Thu, May 05, 2016