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What does it take to close a deal?

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Mediation is all about making a deal. Usually some time in the late morning or early afternoon offers and counter offers start to flow and the Mediator may find themselves caught in rooms where “last and final offer” and “nothing more to give” are phrases that are bandied about zealously. A good Mediator will exercise caution in disclosing such views to the other party until it would seem that is genuinely the case. To do so earlier risks creating an artificial impasse.

So what do you need for parties in conflict to reach an agreement?

According to Frank L. Acuff (How to Negotiate Anything with Anyone Anywhere in the World, one of my favourite texts on international negotiation), you need to:

  • Satisfy the logical needs of both parties;
  • Satisfy the emotional needs of both parties; and
  • Convince the other party you are at your bottom line.

If a deal is not forthcoming, at least one of these components will be missing. A good Mediator will identify what is lacking in each room and help it to be found. How will they do that?

Logical needs

Logical needs is usually the area advisers find easiest to deal with, being trained to think logically. A clear analysis of what a worst day, best day and most likely day in court is likely to yield and the probability of each is a good starting point. An adviser should remind their client that even if the probability of the worst outcome is only say 20%, that means if a one day trial were to be run over 5 days with different judges, one of those 5 hearings would result in the worst outcome. Could their client live with that? If the answer is “no”, it is probably not a risk worth taking. So negotiations should continue or the deal on offer be accepted if a better one cannot be obtained.

In this world of increasing “competimates” (where competitors are also trading partners) and decreasing choice of companies with whom to do business (as mergers abound) it may be logical to restore a relationship and continue trading as frankly there is scant choice of other alternatives.

Emotional Needs

This one is a “biggie”. While the deal on offer may make good business sense, emotionally one party may no longer trust the other or they may harbour so much resentment they feel unable to make a deal. Family business disputes are often the worst for this.

Mediators have been known to say to a party: “you are not going to make a deal unless somehow you get rid of your anger”. Easier said than done. On the mediation day this can be helped by an apology, frank discussion between the parties, an “agreement to disagree” on certain issues, “venting” in a private caucus with the Mediator and good summarising and reflecting back by the Mediator, or even something as simple as taking a walk.

Convince the other party you are at your bottom line.

People will always wonder how far they can push the other party and whether there is something more they can gain by continuing to negotiate. At a mediation the aim is to find a deal that is “satisfactory to all”. You will almost never get your best outcome at a mediation. That must be saved as a possible but unlikely lucky dip result of a court hearing, with all the high emotional and financial stakes that accompany it.

The Mediator will gain a better understanding of each party’s interests and needs if time is spent exploring these matters early on in the mediation. It may be the parties will authorise the Mediator to disclose such needs and interests to the other. Moving to bargaining too quickly prevents a sound understanding being developed of “what might work” for each party.

The best way to convince someone you are at your bottom line is to look at them straight in the eye and say so. This is why sometimes, when parties are reaching a deal that encompasses continuing to trade, I will suggest a joint meeting between the two key decision makers with myself so that exactly this can happen. Regretfully this means the advisers who may well have sweated blood in progressing their client’s litigation for many months are not present at the closing moment. But isn’t that a small price to pay for peace and a satisfied client?

At the end of the day if a deal is “good enough” for both parties at a mediation that is a successful outcome. Like so many things in life, striving for perfection or the maximum possible comes at a price of possibly not reaching the finishing line, and not being able to move on to the next challenge. As has been wisely said: “The past cannot be changed. The future is yet in your power”.


Online Mediation – The New Frontier for Dispute Resolution.

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FAQs

  • How does online mediation differ from face to face?

It’s quicker to set up, cheaper (no venue or travel costs) and takes less time (no travel).

  • Do solicitors, barristers and parties all need to be together?

Absolutely not. Advisers and their client(s) can all be assigned to one “breakout room” where they can talk freely in confidence. Only the mediator can visit them there.

  •  Do you still have a joint session?

Yes, if everyone is willing. In this case the parties are invited to join a main meeting room with the Mediator.

  • Is preparation the same as for a face to face session?

Yes. In addition, the parties and advisers will be sent a Zoom invitation for the day. It is also good to have the usual pre mediation chat on Zoom with the advisers, parties and the Mediator to check everything is set up using the technology.

  • “Technology set up?” What’s involved?

Ideally you will use a computer or laptop, but a phone will do. Ideally you will have earphones with a microphone but usually the microphone on the computer/ laptop/ phone will work fine.

  • Should we still prepare Position Statements?

Yes, in all mediations the more each party knows beforehand about where the other party is coming from, the better. It’s also a useful summary for the Mediator.

  • Is online mediation unsuitable for any cases?

Some say it’s unsuitable for highly emotional cases but in our experience the reverse can be true. There can be a deep sense of connection and confidentiality by video.

  • Does it all have to be done in one day? What about when parties are in different time zones?

You can have several sessions of say 2 hours each over several days. No problem internationally, you just choose the slots when working hours overlap.

  • How is the settlement agreement drafted and signed?

This can be either by e-mail or using for example the communal drafting facility on Zoom where the mouse can be passed to each solicitor in turn to make amendments. Signature can be electronic by e-mail or using a secure platform such as DocuSign.

  1. So why wasn’t online mediation such a thing before Covid-19?

Good question. Many mediators have been asking themselves this. Perhaps because it is well known by mediators that chocolate encourages people to settle and this is one of the few things you actually need to meet face to face to share!

 


Anglo German approaches to Mediation – why so different?

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The UK is still in the EU alongside Germany, yet recently I was surprised when working with a German accredited Mediator how practices and techniques differ greatly between our two countries. Lack of awareness of these differences could easily give rise to loss of trust in the process or the other party.

 

First, in England it is usually expected that each party will begin in a separate room and have a “pre-mediation chat” with the mediator. In Germany, such practice may raise questions of bias and lack of neutrality on the part of the mediator. A German Mediator will almost always invite both parties to begin in the joint room together straight away.

 

And there, in Germany, they are likely to remain, for some time. This is in contrast to the English preference in civil mediations to move to private caucuses (meetings) at an early stage after a joint open session (if such session even happens at all).

 

During this joint open session under the German Model it is likely that parties may express emotion, probably more so than they would be encouraged to do so in England. “Venting” is given more merit in Germany than often is the case in England. Indeed a core part of the lengthy German Mediation Training is a module in Non-violent Communication as advocated by Marshall B. Rosenberg, PhD. (An excellent communication model used to negotiate peace treaties and with terrorists, yet to play a part in English Commercial Mediation training).

 

So from this we may glean that a German mediation is more likely to be direct and face to face than in England.

 

If as a party you doubt whether you will be able to express your emotions well at mediation, fear not. Some German Mediators engage the technique of “doubling”. This involves the mediator kneeling next to the party and seeking to express their emotions for them. The party will advise if they have got it right, wrong, or almost right.

 

What about the language of the mediation? This should be agreed at the outset, and stuck to. Some international disputes use a mediator that can speak two languages fluently. However for certainty it is best to keep all discussions in one language.

 

What role is the mediator likely to adopt? In England the purist approach is the mediator is a facilitator, who will enable communication between the parties and assist people in dispute to assess their case and the other party’s case. Many mediators will go further and either subtly (by questioning and body language) or overtly evaluate the strengths and merits of each party’s case. In Germany, the mediator will start being facilitative and might later ask the parties whether they wish an evaluative approach.

Mediation is certainly a more cost effective and quicker way to resolve disputes than going to court. The cost of a mediation in England will vary depending upon the experience of the mediator, the value of the dispute and other factors such as the complexity of the issues and the number of parties in dispute. Whatever that amount may be, a mediation in Germany is likely to be cheaper, since the mediator’s overheads and venue costs are usually lower. If the language of the contract being disputed and the working language of the parties is English, it is best to have a mediator who has an excellent command of English.

 

I was recently asked how ethical it is if one party is speaking in a foreign language and you understand it, but do not divulge this to be the case. I believe such disclosures should be made at an early stage to avoid any breach of trust arising. However not every culture would take such a transparent approach… So ascertain at an early stage the linguistic skills of those with whom you are mediating if you are planning to have discussions in a language other than the one designated for the mediation.

 

Finally “getting on with it”. The main remedy before a German Court for breach of contract is specific performance. Something that is rarely ordered by the English courts, who more readily award monetary damages. Therefore expect a German business to come to mediation with a mind set borne from that legal approach. They will most likely expect the failing party to remedy any defects and execute the contract. Money alone is unlikely to solve the dispute.

 

In international mediations even more care should be taken than in domestic ones not to jump to assumptions and to find out the approaches a mediator is likely to take well in advance.

 

Rebecca Attree M.A. (Cantab), International Civil and Commercial Mediator


Top Tips on Mediation – What is the Price of Peace?

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Everyone has a price at which they are willing to settle a dispute.

One of the key things for an adviser to consider with their client before and at a mediation is “What is my price for peace, and what is the other party’s price for peace?” Certainly this is what a good mediator will be exploring as the mediation progresses.

That “price” may be purely monetary, and can be calculated by looking at the cost of alternatives (that are usually litigation or arbitration), and the risks involved. It is necessary to factor in other costs to that alternative such as time and resource in pursuing legal action, risk of reputational loss due to publicity, not to mention the stress and sleepless nights for the individuals involved.

The “price” may however include less tangible but possibly more valuable issues such as an apology, an agreement to change working practices going forward, a joint public statement, or an amendment to an existing contract.

Sadly, “price” may also include for a vindictive party seeing the other party suffer in order to carry out the settlement terms (although of course a solicitor may not act for a client driven by malice).

It follows that one party’s price for peace may be quite different to what their legal advisers say their entitlement should be. And so it should be. Because in most commercial matters while the law prescribes remedies, business people are free to choose whether to avail themselves of them. They may prefer to put the matter to bed and have more time and money to explore new opportunities.

So advisers, please continue to advise. But do not be surprised if your client does not follow your advice on the day of mediation. Parties, listen to your advisers, but have confidence in your ability to make your own decision, as it is only you who know how the jigsaw puzzle of the dispute in the context of your commercial and personal goals fit. Be bold, be brave, be bright.

As a mediator, I always “expect the unexpected” and in my experience outcomes at mediation can be surprising.

Even the most seemingly intractable and insoluble disputes can find a balancing point, albeit often not where anyone at 9.00am on the mediation day thought it might be.

If you’re currently considering the best way swiftly and effectively to resolve a dispute, please contact me to discuss.

To view the latest short video on Rebecca Attree’s Top Tips on Mediation – Exploring your or your client’s Price for Peace presented by Mark Bedford of ADRg click here