Achieving Settlements at a Mediation – Helping Others to Overcome Barriers, December 2014

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This paper has been prepared for the ADR Net 2014 annual conference. We are both mediators and solicitors. As well as being practicing mediators we also have wide experience in advising and representing parties at mediation, which (hopefully) enables us to take a rounded view of the process. We share our thoughts on some of most common areas where deadlock has occurred in mediations we have attended, and from knowledge pooled from speaking to other mediators.

Of course, our experience as mediators may be slightly different from yours. Our collective experiences will depend on the types of case we mediate, and the types of party that we deal with. Sometimes we may deal with parties such as insurers for example, who will view things on a straight financial risk approach, as opposed to a party that has a more personal attachment to their dispute, which may involve their relationships with family members, colleagues or business contacts.

As mediators, our key objective is to help the parties achieve their settlement in their dispute. While the fact that the parties have appointed a mediator hopefully indicates that they would like to settle their dispute, there are sometimes issues, or barriers, that can occur during mediation that can hinder progress and sometimes derail the whole process.

When we as mediators come up against barriers our goal is to try and push through and enable the parties to make further progress towards a settlement. This is not always possible though – sometimes the issue will be too significant.

Our ability to deal with barriers can be the biggest challenge that we face as mediators. This can particularly be a challenge for those mediators who do not do a significant number of mediations, and therefore may be a little ring rusty when faced with a blockage. Reaching such a point in a case you are mediating can easily create frustration, and even mild panic can set in if you wonder where to go next in your discussions.

What Do you Do When you Come up Against a Blockage?

We commend the well-known book by William Ury, Getting Past No on the topic of how to negotiate with difficult people. While the book is written from the perspective of being a participant in direct negotiations rather than acting as a mediator, it nevertheless provides some useful insights and provokes thoughts that can be useful to us as mediators.

Many blockages occur in private session. The first piece of advice we would give is to keep calm under fire. You may feel a sense of panic or pressure.

The first need is to control your emotions. Ury talks about the concept of ‘going to the balcony’ when faced with a blockage. In other words, step back and try to see the situation objectively. Distance yourself from your natural impulses and emotions. This could mean that you take a time out and pause, or you could re-wind the tape and get greater clarity from the party as to what they consider to be the blockage.

The issues for us to try to get to as mediator are: What lies behind the ‘no’? What makes the party refuse to co-operate? What are their underlying motivations?

We need to explore these issues with the party and try and find a way to help them move forward. This can require considerable skill. You could consider the following:

  • Emotions or pride: acknowledge and allow space for these issues to be expressed in private session (and possibly in open session);
  • Desire for ‘revenge’: reality test the practicality or ultimate worth of revenge;
  • Issues of principle: try to focus parties on practical considerations;
  • Failure of communication: act as a conduit for clear and safe communication, consider ways in which the parties could communicate directly during the process if needed;
  • Lack of information: consider with the parties as to what information is significant to the process and consider how this information could be exchanged;
  • Failure to identify real issues: list and clarify issues with a party as to what they need to discuss to reach a resolution;
  • Poor negotiation skills: help parties with how to package an offer and how it could be presented;
  • Ask each party to think about and reality test their BATNA and WATNA with you;
  • Lack of authority to settle at the table: help parties set up lines of communication to the necessary authority;
  • Fundamental disagreement or lack of understanding about a party’s legal position between representatives: consider a lawyers only meeting with yourself.

So, what particular issues or areas can often create a barrier, and what steps can we take to either try to prevent them occurring at all, or to try to overcome them if they do occur?

Representatives – Allies or Obstructions?

A common issue raised by mediators is that representatives attending mediation with a party can sometimes prove a barrier, often unintentionally. While a representative can be an important ally in helping you do your job effectively as mediator, a representative can also provide a barrier to progress. We stress that, happily, this is not always the case.

This can happen in a number of ways, such as:

  • At the opening session the representative will often make a statement on their client’s behalf. The representative invariably sees their role at that stage as being an advocate for their client’s case to justify why their client would have an outright win in litigation. This usually entails a strong statement of a party’s case and a rejection of that of the opponent’s. That can irritate the opponent and embolden the party on whose behalf the presentation is made.
  • The representative may want to get involved in detailed legal debate about the dispute itself, possibly by referring to points of law and authorities.
  • In private session a party’s representative acts as their ‘human shield’, which can hamper your ability to converse with a party directly to try to get into topics such as their interests and needs.
  • A representative may be being particularly difficult and obstructive in private session. If that is the case, having a discussion with them away from their client may be helpful. You can come up with some pretext for taking the lawyer out of the room. When you speak to them you can perhaps suggest, tactfully, that the goal of reaching settlement may not be met if the discussion cannot move on, and that if their client really wants to explore settlement then the representative needs to help that process.

So, what can you do to try and encourage a positive contribution from representatives?

  • In an attempt to try and head off potential problems before they occur, as a matter of routine, make contact with the representative who will be attending the mediation before the day. You need to try to build up a working rapport with them, and the call should go beyond simply covering logistical arrangements for the day. On some occasions parties will also instruct a barrister to attend, perhaps with a junior solicitor or paralegal who may not have had day to day control of the case. In those circumstances try and speak to the barrister too before the mediation if you can.
  • In our experience, representatives are often prepared to be more forthcoming with you about the case, their client’s motivations and other useful pieces of information in such a call than they are on ‘game day’ when they are with their client. This conversation may give you some insight into issues that you may have to face on the day (giving you chance to think about these in advance). You could also try to find out from this discussion if the focus of the representative is likely to be helping their client win a settlement rather than winning the argument or the case.
  • It pays to appreciate that the representative may feel that they are ‘on trial’ in the mediation process almost as much as their client, particularly in the early sessions. They will have advised their client on the dispute and prospects of success, as well as probably recommending mediation. They may well feel nervous that they are entering a lion’s den when their advice is being challenged in front of their client, either in the open session or by the mediator in private session.
  • It can be useful to ask them what they are planning to say in the open session. We appreciate that some mediators may from time to time dispense with an open session at the start of the day, while others think a lengthy session can help the parties exchange information leading to faster progress. The approach that you adopt will depend on the case and your own approach.

Assuming that there is an open session though, it can often be advisable that the parties’ themselves say something at the opening session. This can be as straightforward as getting the party to commit to the process, and that they are attending to try and achieve settlement, or they may want to say more. Again, you may need to use your judgment as to what contribution you think is useful to the mediation process, and what may be counter-productive. There are many occasions when more damage can be done at the opening session than good, and time is then spent in private session trying to make repairs.

  • The issue of course is that the party takes their lead from their adviser. A strident performance from the representative can even sometimes embolden a party to take a more robust view of their prospects of success than really should be the case. Of course, if a party genuinely believes that to be the case, and considers that litigation is truly a better alternative to reaching a settlement, then that is of course their decision. Our job as mediator is to reality test to try and ensure that they are making an informed decision.

The ‘Elephant in the Room’            

As the mediation session progresses you may suspect there is a stumbling block or an obstacle that no one will refer to. This could be for example:

  • A fear the agreement in dispute breaches a regulation such as competition law;
  • In a claim for breach of directors’ duties, an underlying threat of a fraud allegation against the directors;
  • Pride, particularly where one party believes they have made a mistake in the past;
  • Money laundering;
  • Tax evasion;
  • Family relationship – possibly involving another family member not present at the mediation;
  • An addiction such as gambling or alcoholism;
  • Mental health issues of one of the parties.

What do you do? The answer will depend on the nature of the ‘Elephant’ and a number of factors.

If it is a point of law such as a possible breach of competition law you might talk to the adviser alone in the first instance. This will save professional embarrassment, especially if the adviser’s firm was responsible for preparing the contract.

A party may have a significant amount of pride at stake. For example, they may have made a mistake but not wish openly to admit it. In this case see if the party will discuss the issue in private session. It may be they are willing to settle but on terms that are not explained or justified, thereby obfuscating the “mistake” and retaining pride.

If you suspect the mediation may be used for money laundering, as a Mediator you will be under a duty to terminate the mediation and inform the relevant authorities. You should not tell the parties your reason for doing so as you may otherwise be guilty of  ‘tipping off’.

If one party is obliquely threatening a fraud allegation you may decide to be upfront and raise it with the party who is alleging it. You will need to discuss whether they wish the possible allegation to be disclosed to the other party, and how the other party would receive it if it were.

If a family relationship is suspected as an obstacle to settlement, consider asking one of the parties in private session an open question that is not too direct to see if your suspicion is correct. For example, it may be in a family business dispute that other family members who work in the business who are not shareholders would be affected by a settlement. If so, it may be a relief for the party to discuss the impact of the settlement on that absent person even if the discussion goes no further than that private session. They will at least feel heard and understood.

Discuss with the party whether they consider the ‘Elephant’ to be pivotal or peripheral to the mediation. If it is pivotal, discuss how it may be addressed in the mediation and also by you with the other party. If it is peripheral (i.e. not part of the dispute and incapable of being resolved in the session) seek to obtain the parties’ agreement to put it to one side as far as possible for the session and to focus on the dispute. Emphasise that if this dispute is resolved it may be the key to unlocking the other difficulties presented by the ‘Elephant’.

If an addiction of the other party is disclosed or alleged you will need to decide whether it should become part of the mediation discussions. If the addiction is said to be relevant to what the other party will agree to in a settlement, or as background to why the dispute has arisen, it may be worth exploring it. However be careful that the disclosure is not being made largely to seek to undermine your opinion of the other party.

If it is a mental health issue it may be better not to address it at all, or only to address it with the adviser. In an extreme case if you are unsure whether the party has capacity to settle you should raise this with the adviser. The propensity of a mediator to delve into the emotional state of a party will depend upon the skills, training and character of the mediator. Solicitor mediators are generally less likely to do so than those coming from a psychology or counseling background.

What About the Party who is Convinced they are ‘Right’ and They are Bound to Win at Court?

The more times a person repeats their point of view the more they believe they are right. By the time they come to mediation a party will probably have recited and heard their case rehearsed many times. At the mediation:

  • Try to limit opportunities for the party to recite their case. If they speak in the opening session, encourage them to focus on the reason for their attending the mediation and what they want to get out of it. The same applies to their adviser. In private session do not allow them to ‘vent’ for too long.
  • Probabilities – remind the parties that for example a 40% chance of paying £1 million does not mean they may be ordered to pay £400,000; it means that in four trials out of ten they would be ordered to pay £1 million and to pay a significant part of the other party’s costs.
  • Engage in devil’s advocacy and reality testing. One party may have selective perception and may not have fully taken on board certain key aspects of the other party’s argument, or a practical point such as their ability to pay.
  • Speak to the party alone. This should be offered only when sufficient rapport has been built up between you, the party and their adviser. It is courteous to ask the adviser if they agree to this. While some advisers may be surprised at the suggestion, they will rarely refuse.
  • If two or more individuals represent one party you may sense that one has a greater propensity to settle than the other. If this is the case after some ‘devil’s advocacy’ you may consider leaving them together for a period so that the one wishing to settle will seek to convince the other to accede. A persuasive colleague can be highly influential in these circumstances.
  • Go through a party’s BATNA, WATNA and MILATNA but bear in mind people settle usually not through fear of going to court but because parties are aware of the risks and wish to put the dispute in the past so they can move on to the future. Timing of this discussion is key – do it when you have built up trust and rapport with the parties and issues have been explored thoroughly.
  • Distance a statement or offer from the other party. This may be achieved for example by saying “If A were to offer you XYZ how would you feel?” This will diffuse the psychological bias that can arise where a party does not trust the other party and therefore believes that everything they say is wrong or has a catch to it.
  • Help a party to detach themselves from what they consider by now to be their normal pattern of being in litigation and imagine how life would be without the dispute. A psychological factor that can be at play with an intransigent party can be an inability to change mindset or strategy. They may have been litigating for so long they cannot imagine life without the dispute. A settlement would involve a change, and they may not be ready for that, even if it will be for the better.
  • Remind a party that the mediation is a golden opportunity to move on from the dispute. Parties can easily lose track of time and focus during the mediation, particularly as energies deplete as the day progresses. As time during the mediation passes, they may need to be reminded that the window for taking the opportunity to reach a deal is closing and may not open again.

What Does it Take to Achieve a Settlement?

Frank L. Acuff in How to Negotiate Anything with Anyone Anywhere in the World states that to reach closure parties need to:

  • Satisfy the logical needs of the other party;
  • Satisfy the emotional needs of the other party; and
  • Convince the other party they are at their bottom line.

A mediator needs to work with both parties on all three levels. If a settlement is not forthcoming, identify at any given moment which of these three component parts are missing from each party and focus on how they can be created.

What if a Settlement is not Reached on the Day?

If a settlement is not reached on the day consider asking one or both parties to leave an offer on the table overnight. This has the benefit of continuing the momentum of discussions and frequently the matter may be resolved a few days later. (A recent survey showed that while just over 75% of cases settled on the day 11% settled shortly after.)

A note of caution – if you remain involved in the discussions as a mediator make sure that the ‘Mediation Session’ and the Agreement to Mediate cover this ongoing period of involvement so that confidentiality and other duties between you and the parties continue during this time. (See: AB & Anor v CD Ltd (2013) EWHC 1376).

Conclusion

This paper seeks to give ideas, suggestions and reminders as to how we as a Mediator may assist parties to achieve settlements, and how we may help them to overcome certain barriers. Essentially there is no “one size fits all” answer to these issues and what may be appropriate in one instance may not be so in another.

Gaining trust and rapport with a party will enable you to identify barriers. It will also inform you as to the best approach for the particular individuals or situation before you. As to what to do about the barriers, trust your intuition, and give yourself time to think during the mediation by going to the Mediator’s room for a few moments can assist. Remember Ury’s advice of ‘going to the balcony’. Certainly your own response to mediation will colour its progress and the parties’ mental states. If you consider the parties have reached a blockage, and begin to think about it in those terms, you may lead others to think in a similar way and consider the problem insuperable.

Sometimes a good dose of positivity, patience and good humour can go a long way towards helping others along the road to settlement.