Monday, October 13, 2014

Bargaining with the Mediator

     After over a decade of mediation, I sometimes find that after the information has been exchanged and the negotiation is ready to begin with dollars, the parties are stubbornly resistant to discussing numbers that will land them within the likely "trading zone".  In these instances, I find it is sometimes effective for the mediator to propose her own "hypothetical brackets" to break the impasse before it finds it's way from lines in the sand to footprints in concrete.  By making the bracket "hypothetical", the mediator can take the credit or blame for such outlandish values or suggestions and can also narrow the gap and keep the parties moving. 
     For example, where a party has made an initial pre-mediation demand of $1 million to settle a real estate dispute and the other side could not possibly pay that, even if it agreed, but could, if necessary, satisfy a judgment in the "low 6 figures", the mediator may propose an initial bracket of $100,000 to $500,000 to settle (instead of attempting to negotiate between $1 million and a $10,000. offer all day).  The Plaintiff may not agree, but could then "negotiate with the mediator" to propose a bracket of $250,000 to $750,000, instead of sticking at $1 million or $990,000 in response.  The other side, hoping to end up between $100,000-$300,000 would be resistant to that, but might propose to the mediator that they would accept a bracket of $150,000 to $350,000.  This is a classic "negotiation with the mediator" in the execution of the "what if" game.  The likely starting place for entering into the trading zone would then become $200,000 to $550,000, which may jump start the negotiation considerably from the $990,000 to $10,000 starting place.
     By negotiating with the mediator instead of the opposing party, the disputants are able to test the values and get into the trading zone in a hypothetical way without making offers that become floors or ceilings for further negotiation if it becomes apparent that the parties cannot get into the same "trading zone" on the day of mediation.  Do any other mediators or lawyers find this effective as a strategy to save face and gain information?  Are there ethical considerations that I may be missing here?

Wednesday, September 24, 2014

Getting to the ZOPA in Negotiation

Yesterday I heard an employment case where a trial lawyer earnestly believed that he could get an inflamed jury to award his client at least $500,000.00 based upon the wrongful termination of a young, minimum wage worker who had less than $20,000.00 in lost earnings and some challenging facts to overcome.  His former employer came to the mediation prepared to pay his lost earnings (actual damages) if he had to, but not at all prepared to pay something akin to "punitive" damages based upon the spin the trial lawyer intended to put on the case.  Clearly, the two parties were not in the same "playing field" and the old-fashioned distributive bargaining (an initial demand of $650,000 and an initial offer of $2,000) were never going to work to get this case settled.
When the parties or their lawyers arrive at mediation with wildly divergent evaluations of the case, it's worth spending as long as it takes to discuss and agree upon the ZOPA:  Zone of Possible Agreement, however broad it may be.  Just as in baseball, the parties need to work with their lawyers to determine the boundaries for negotiation and what is truly "out of bounds".  In this case, that occurred through my own hypothetical negotiations--each time narrowing the ball field until it became clear to me that the case had a settlement value of something between $10,000 and $100,000, not $2,000 and $650,000.  Once both sides agreed to be in the same "ball park" realistic negotiation could ensue.
How do you communicate to your clients or your adversary counsel about the ZOPA before wasting precious time defining the boundaries of negotiation in mediation?

Thursday, September 18, 2014

The Angel of Optimism: What to do (beyond Prayer) after a Mediation Fails

Mediations happen at all different times in the life of the dispute.  This month, I've mediated two matters that had not yet been filed as lawsuits, one where no discovery had yet been conducted, and another on the eve of trial after a previous mediation failed.  All of the disputants came with the hope and expectation that their conflict would get settled that day.  Unfortunately, it doesn't always work out that way.  But after the formal mediation ends, the hard work begins when phone call and email and private meetings and review of documents takes place in a painfully slower process than the single day in which everyone agrees to set aside their other business and concentrate on just one matter.  Parties and sometimes their lawyers are tempted to give up and proceed to spend the time, money and risk shutting down all negotiation in the name of thorough litigation--as though they were never going to revisit the wisdom of a settlement.  In those cases, I urge the litigants to tap gently on the shoulder of their "Angel of Optimism"/Mediator and allow me to keep them on track and cool as they navigate the tumultuous waters and get to the other side.  In other cases, I will admit that I end up serving as that pesky little dog who just won't let go of your pant leg.  Somehow or other, the parties are ever grateful that somebody sees it as their job to keep working for a resolution--even while they engage lawyers to prepare for the potential that this is the 1 case they will take to trial this year or next.  Which do you prefer:  the angel of optimism or a pesky little dog ever nagging you to tune back in to the conflict your weren't able to resolve last week?  What other ways do you "stay with the conflict" when it fails to settle at the mediation session?

Thursday, September 11, 2014

Non-Monetary Concessions in Mediation: Can they be Effective?

Believe it or not, lawsuits are not always brought merely for money.  Sometimes, a gesture of good faith, a sign of understanding, a non-monetary, symbolic concession can make all of the difference.  It sounds trite, yet many of my colleagues in the International Academy of Mediators have chimed in to a dialogue about the interesting array of non-monetary concessions they have witnessed in settling the highest level of legal disputes.
In my own practice, I had an interesting real estate dispute between neighbors over the rights to use of a parcel of land between them.  The Plaintiffs were seeking hundreds of thousands of dollars as damages, claiming that the value of their property had been substantially diminished.  As an interesting, creative offer, the lawyer for one of the parties offered to purchase the property from the Plaintiffs at a substantial increase from their purchase price.  Although they did not accept his offer, they did recognize that perhaps the property they thought had diminished in value, had in fact appreciated.   Rather than holding a clouded property, they now saw it as the gem they first endeavored to buy.  It was just that minor shift that opened the gates towards a reasonable settlement.
What are some of the creative ways that you've seen settlements occur that work effectively?

Thursday, September 4, 2014

Handling Continuing Continuances of Mediation

The lazy days of summer are behind us and most people return in September with a renewed purpose and determination to take care of business, stop procrastinating and get back to work.  In those cases where a scheduled mediation hearing  is continued more than once, the mediator is well-served to inquire and consider the basis for the continuance.  Is there a hint that the parties can work out their differences without the aid of a neutral third party?  Has one party lost hope that any meaningful settlement can be achieved? Is one party preparing to file bankruptcy, go out of business or abandon the claim? Is there posturing going on about how the fees should be split and who should be at the bargaining table if meaningful negotiations are to take place? Do the parties not wish to invest in the settlement by paying the mediator's fees in advance as is required by their engagement? Does one party not wish to pay their lawyer to pursue this avenue?  Has the Plaintiff or his lawyer lost interest in the case and reached the conclusion that it's not worth pursuing?
As in all facets of mediation, make no assumptions.  Still, I think it's fair to ask the party who requests the continuance why they are seeking it.  Sometimes, it can give valuable clues into the risks and benefits to settlement when they ultimately do show up for mediation.  How do you handle postponements and as lawyers, do you reveal the reasons to your mediator?

Wednesday, August 27, 2014

Balancing Fairness and Justice: When Just Right isn't Enough

As an arbitrator (or a Judge) we have limits--on our outward demonstration of compassion, our creativity in crafting appropriate and fair remedies and our moral indignancy where wrongs occur without remedies.  As poorly as we may feel about how someone was mis-treated, we are constrained to follow the letter of the law (even where it may be at odds with it's "spirit") and dole out remedies only where each element of a given cause of action has been proven by a preponderance of evidence together with actual, credible, available damages.  Yet, life is messy.  Memories fade.  Documentation is not always what we wish it were and hindsight is not always perfect.  At trial, the evidence may not be sufficient to meet those high standards.
This week I was challenged by a multi-day arbitration where I felt personally torn between the dictates of "justice" (technically, the respondent had no legal obligation to keep an unwanted, at-will employee when a new Supervisor came in who disliked him) and the cry for "fairness" which may have dictated he be given some notice, explanation, that the termination be based upon legitimate "cause" or at least that he be given some recognition for the many years of service that the employee had given prior to the termination.
My struggle ended with my own suggestion to the parties that before they finish putting on all of their evidence (and possibly becoming further emboldened in their positions) and before I was forced to apply the law and reach a verdict which would be adverse to one and victorious to the other, perhaps they would like to engage in settlement discussions.  Five hours later, and to my great relief and their great surprise, they had arrived at a very creative and fair settlement--which had less to do with "justice" than my verdict would have, but everything to do with "fairness".  I am confident that 2 days into trial, had I not suggested this approach, the parties would not have recommended settlement discussions to their respective clients.  Both had engaged very competent counsel to win.
Sometimes, a neutral third party is exactly what the parties need to arrive at the delicate balance between "fairness" and "justice" that we try to maintain.  Do other arbitrators dare to recommend settlement discussions during the evidentiary hearing?  (I did not serve as the mediator, by the way, because no one was expecting this would work--so they wanted me to continue the hearing if it failed.)
I offer this experience as hope for a more balanced future outcome on the tough ones!

Thursday, August 21, 2014

Mediating with mental Illness

I am increasingly aware that there is a broad spectrum of frustrated individuals amongst us.  Some turn to their doctors, others to lawyers, still others to clergy members, best friends or family members when problems seem too great to cope with on their own.  What I learned this week from a psychologist who observed a hearing I conducted,  is that many people with mild to moderate mental health disturbances seek out validation for their conduct (or vindication for  the misconduct of others) through repeated legal challenges.  Whether they are truly "vexatious litigants" or merely forever challenging authority in their work place or their communities, there are plenty of instances where my non-professional opinion leads me to conclude that something other than the facts and law are driving the particular dispute before me.  As we often say, even with those not mentally ill, "it's never just about the money".  In those cases, it would appear to me that the best "treatment" that a mediator (or Judge) can offer is to allow the individual to fully vent, demonstrate attentiveness and understanding and then proceed to work to find the best outcome possible based upon that genuine understanding.
Still, I am not a psychologist and frankly have no confidence that what I do as a mediator is adequate to "hear them out" and allow the necessary venting.  Sometimes, in fact, I am tempted to blow up at them and recommend they seek out mental help, not legal help.  Of course, I never have allowed myself to go that far, but I wonder what others do to manage parties who exhibit signs of mental illness in the course of the mediation?  Can it be ignored? Can it be helped or changed? What are the best strategies to manage these challenging disputants?