No one begins a dispute thinking they might be wrong. This sense of moral and legal certainty is usually coupled with high expectations. As a result, parties can arrive at mediation inherently entrenched in their beliefs about the strength of their case, aiming for outcomes that are unrealistic and often unachievable. This mindset can present a significant obstacle to productive negotiation.
Reality testing can be used by a mediator to deal with this obstacle by subtly adapting expectations to reality. However, there are challenges to using this tool effectively, particularly when the beliefs and expectations of parties are deeply entrenched.
In this blog I explore the challenges of reality testing and discuss how this tool can be used effectively to encourage parties to adapt their expectations and meet on more reasonable ground.
It is a given that parties will arrive at mediation with expectations. What's important is being able to identify and understand the source of an expectation in order to respond to it productively.
Amy Lieberman, experienced mediator and Executive Director of Insight Mediation Group, has created two non-exhaustive lists of possible sources of influence, from the perspective of both the plaintiff and defendant in litigation.
For the Plaintiff
- legal counsel’s analysis
- information on the Internet
- statutory damage limits
- pressure from significant others
- amount in a demand letter
- pre-mediation offers
For the Defendant
- legal counsel’s analysis
- past experience resolving or litigating similar claims
- actuarial information about jury verdicts and settlements of similar claims
- costs of defence
- past experience with plaintiff’s counsel
- pre-mediation offers
With the amount of information available online, particularly through research and social media, parties are better informed than ever before. In my mediator role, I am mindful of this new reality and equipped to debunk a party’s attachment to someone else’s story that might be contextually different or completely unrelated to their circumstances.
From my experience, expectations formed through legal counsel’s analysis can present the most sensitive challenge to reality testing. A party justifiably places their trust in the experience and expertise of counsel in valuing the strength of their case, forecasting their chances of success, outlining the costs of litigation and reviewing the implications of losing. Any conversation between counsel and client about their likelihood of success can create unrealistic expectations, even if unintended. And, while not all counsel are equal when it comes to doing a risk analysis, leading a party and their counsel through a reality testing exercise that leaves counsel looking foolish and their client questioning their judgement is of no value to anyone. The key to any effective reality testing is proceeding tactfully and measuredly to enhance - rather than detract - from the negotiation process.
THE RIGHT DOSAGE
Fairness and neutrality are integral to the mediator’s role. Before the mediation begins, parties must trust that the mediator possesses these qualities. If done inappropriately, a reality test can cause a party to perceive the mediator as lacking both. Dave Rudy, a mediator with over 25 years of experience, writes that a perceived lack of neutrality can equate to an actual lack of neutrality if not diffused. In his article, Mediator Techniques Abused: Avoid These at All Costs, Rudy notes how the mediator can be perceived by one party as an advocate for their opponent during reality testing. This is especially so when the reality testing occurs in caucus (as is often the case), as parties may feel singled out by the mediator. It is important for the mediator to explain that the “devil’s advocacy” component of the reality test happens in the other room as well. When done fairly, a reality test shows each side the challenges in the theory of their case and opens parties up to the idea of reframing their expectations.
RECOGNIZE THE RISKS
Not every party is receptive to reality testing. In some circumstances, I would agree with Peter Phillips, Director of the ADR program at New York Law School, when he describes the position of the mediator providing a reality test as an “unwelcome and vulnerable posture.” Phillips points out the following risks of reality testing:
Being Perceived as Rhetorical
A mediator can come across as rhetorical if they do not explore the answers given during reality testing. A rhetorical question will fail to elicit information about the party’s expectations. This can be avoided by listening to the answers provided so that they can be explored further in a way that is tactful but also effective for gathering information and challenging each party's theory of the case.
Causing a Party to Feel Coerced
A mediator must maintain trust with all parties; overzealousness can compromise neutrality. Phillips points out that even a “tone of voice or an arch of a brow” can suggest that there are right and wrong answers. Remember: Reality testing is an exercise in listening, clarifying and reframing to allow each party to self-identify the risks and weaknesses in their case.
KNOW YOUR ROLE
A reality test is not an opportunity for the mediator to simply offer their own evaluation of the case (unless that is what the parties want and ask for expressly). As Phillips reminds us, parties already have legal counsel for that job. The goal is to provoke a change in the parties’ assessments and assumptions by offering fresh perspectives and information. The mediator must avoid interfering with the lawyer’s role during a reality test. Before beginning, I will often discuss with counsel the types of reality testing questions I will be asking to ensure they are comfortable with my approach and intentions.
Deflating high expectations at the mediation table is critical to creating a negotiation landscape that is conducive to settlement. When reality testing is done right, the mediator can temper expectations and reveal to parties the flaws or weaknesses in their positions and light the road to resolution.