Dealing With A Competitive Approach In Mediation

Most people approach mediation with the best of intentions. They are
hopeful that the negotiation will achieve their ultimate goal — to settle
the case — and assume that the other side is at the bargaining table for
the same purpose. Because of these aspirations, it is not unusual for
parties to put all their cards face up on the table and work toward a
cooperative solution.

The idea of cooperation is a basic principle in mediation and the focus
of its universal appeal. Studies have been conducted demonstrating that
cooperation as an affirmative strategy will more likely than not achieve
the objectives of mutual gains for all parties. However, litigators
in a mediation sometimes encounter adversaries who don’t quite see things
their way, and approach the process in a much more competitive and
sometimes hostile manner.

Under these conditions, an advocate in a mediation must be aware of
strategic options that can be used in order to avoid becoming exploited in
the negotiation. Fortunately, those options have been studied extensively
by educators through such game theories as the well known “Prisoner’s
Dilemma.”

Following extensive computer testing of the Prisoner’s Dilemma,
Professor Robert Axelrod came to the conclusion that the best strategy for
achieving goals through cooperation is a simple process he calls “tit for
tat.” This strategy proposes that during a negotiation, a party must match
the opponent’s move either competitively or cooperatively. If your
opponent chooses to hit you over the head, you must hit back. If your
opponent offers an olive branch, you must offer one back, and so on.
Axelrod developed five basic rules to follow in achieving cooperative
solutions:

(1) begin cooperatively;
(2) retaliate if the other
side is competitive;
(3) forgive if the other side becomes
cooperative;
(4) be clear and consistent in the approach;

(5) be flexible.

As a professional mediator, I have found the cooperative approach to be
the primary reason cases settle successfully. I have also found that many
litigators come to the table assuming they are still at war, and are
willing to do anything to win, sometimes creating an imbalance in power
with the cooperative advocate. It is with this in mind that I would like
to offer some ideas on approaches which have worked in cases I have
mediated where one side refuses to cooperate.

Like fishing, the best thing to do if you are an attorney representing
a client in a competitive mediation, is to throw out your rod and start
reeling them in. Now, what do I mean by “start reeling them in”? The idea
is to get one side to commit to the principle that they might have more
liability and/or damage exposure than they originally thought. Once that
occurs, be prepared with additional information demonstrating that you are
capable of continued retaliation. At the same time, have the mediator
extend a signal that you are prepared to forgive, i.e., work
cooperatively, provided they acknowledge that exposure exists.

This must be done slowly and strategically, without giving away too
much information until you have verified with the mediator that your
adversary is beginning to be a believer in your position. This will
require a delicate balance by the mediator and, of course, your full and
complete trust in the mediator’s representations.

The core of this competitive approach is to allow your adversary to
take the bait and run with it with confidence. Once they have chewed on
the bait for a period of time, then you yank the line in toward the boat.
At that point, you have provided your adversary with an excuse to either
pay out more or take less than they brought to the table.

Suppose you represent an employee who claims wrongful termination and
damages under the whistleblower statutes. The employee evidently came upon
some very serious information concerning the company’s policy to allow a
product on the market that clearly caused bodily injury to it’s victims.
The employee encouraged a recall of the product and was met with
resistance. Coincidentally, within a few months of asking for the recall,
the employee was terminated for lack of production.

During the mediation, you begin cooperatively by offering to openly
discuss the issues. In response you receive a lecture in front of your
client by your opponent’s counsel about what a bad case you have. You ask
the mediator to check with the company’s lawyer to see whether there has
been any government investigation of the product in question. Immediately
that sparks some interest from the other side, wondering what you are
fishing for. They initially resist but it gets them talking about
potential mine fields which they don’t want unearthed. The mediator tells
you he hasn’t learned anything new so you send him back in to force the
issue. You also float the name of a government investigator who
interviewed your client and ask the lawyer for the company if they would
like to discuss the situation further. In essence, you are using the
power of the mediator to make statements about the strength of your case
without throwing it in the other side’s face.

After several rounds of private meetings, you finally tell the mediator
to ask the company if they feel there might be some exposure in this case.
You ask the question because you know there really has been a government
investigation and you suspect the company doesn’t want it to get out in
the public. You are prepared to negotiate a confidentiality agreement in
exchange for a reasonable settlement. When you get a positive signal from
the mediator, you start asking for money, while at the same time being
“flexible” with your response so that they know the retaliation has worn
off.

To put a framework around this approach, consider the following formula
when analyzing your approach to responding to a competitive opponent:

1. Opening Statements: Be Firm But Kind

This is your one and only chance to speak directly to the other
side without fear of reproach. Some lawyers choose to waive this
opportunity, mainly because they are not confident with their
communication skills or haven’t prepared their case. Never waive your
opening statement. This is a time for you as an advocate to frame what the
issues are, how you view them, and what you expect from the other side.
Open emphatically to the other side and show off your preparedness with
exhibits. Instead of discussing money, have a summary of the damages
available on one page that you leave with the other side and the mediator
upon conclusion of your opening statement.

2. Use Your Client To Tell The Story If The Client Will Sell

Invariably the first comment out of the mouth of a competitive
opponent will be to size up the credibility of your client. If the client
is believable, that theme will run through the entire negotiation, and can
be used by the mediator as a closing point to achieve your goals. What
makes a client believable? Usually it’s a natural ability to communicate
pain. If the client seems to be exaggerating in order to fit a square peg
in a round hole, don’t permit him to speak. If the client comes across in
a natural, easily understood manner, have him tell his story. If you
choose to have the client speak, make sure he is well prepared in advance
of the mediation for questions from both the mediator and counsel for the
broker. The more open you allow your client to be to this opportunity to
tell his story, the more believable he becomes to the other side. At the
same time, discuss with the mediator in advance of the opening session how
far he will allow the parties to go with these discussions, and that you
request that the mediator monitor the amount of time your client speaks.
The fact that you allow him to speak shouldn’t give the impression that
this is a carte blanche opportunity to be used as a discovery device, but
rather a way to signal that you are prepared to begin cooperatively.

3. Collaborate With The Mediator In The Initial Caucus

Generally the mediator will use this time to talk to you about
the strengths and weaknesses of your case. While you probably know them by
now, oftentimes the mediator can give you a snapshot of your opponent’s
position in an impartial way that actually allows you to become more
objective and therefore more effective as an advocate. Rather than sit
back and simply answer questions from the mediator, work together with the
mediator by asking what he thinks is the best approach to achieve your
goals. Ask the mediator what has worked in other cases where parties were
looking to get lots of money from the other side. Get specific examples of
techniques the mediator has used. Decide together what might be the most
effective technique in your case, realizing that you need to be flexible
in the approach. You can’t always put a nice neat bow around every case
and seal it shut. You need to allow the mediator some ability to size up
the other side and determine whether the competitive strategy you
discussed would work or whether you should revisit that decision.


5. Consider the Advantages and Disadvantages of Having the
Mediator Evaluate The Case

Sometimes the mediator might want to give you advice about the
liability of your case, how much you should pay or demand, and so on. This
may be useful to you depending on where you are at in the negotiation.
Before this happens, consider the upside and downside of moving into an
evaluation or advisory opinion.

There are different styles you will find with mediators. One
style is facilitative: asking open ended questions, encouraging you to do
the talking, drawing out strengths and weaknesses from you, and focusing
on underlying interests that might be driving the dispute. The other style
is evaluative: giving an advisory opinion about the potential outcome of
the case, urging you to follow his advice, twisting arms and pushing and
pulling you into submission. One legal commentator referred to this
approach as, “thrashing, bashing and hashing it out.” Both
styles work. However, the evaluative approach in a competitive negotiation
has the added risk of the mediator predicting an outcome that contradicts
and discredits what you have told your client about the case. It could,
and often does, cause one side or the other to become anchored in the
mediator’s evaluation and unwilling to negotiate.

Consequently, it is critical to your success that you find out in
advance of the session what style or approach the mediator tends to
follow. If the mediator leans toward an evaluative approach, the issue
becomes timing – when is the most effective time for the mediator to
become evaluative. In my experience, an effective strategy is to
encourage the mediator to use this strategy toward the end of the
negotiation, particularly when you need to get the other side to move off
their position.

6. Recognize The Intermediate Step Between Identifying The Issues In
the Case And The Final Settlement

So you’ve made it through the opening session and you are in the
first caucus. Your instinct is to cut to the chase and not waste any time.
Wrong. Timing is everything in a competitive mediation and your adversary
knows it. They will not give you their best dollar early on in the
mediation. They feel that the mediator needs to fully understand them so
that the mediator will work to achieve the best outcome possible. You
probably feel the same. Resist the temptation to force the mediator to
show you the money too early in the process. Being flexible and willing to
cooperate requires that you allow for some open-minded “communication” of
positions and interests. You never know, your client might just feel that
he had his day in court.

At the same time, this is the step in the process where you have
a chance to send informational messages into the other room through the
mediator. Think about the consequences of what you want the mediator to
relay to the other side, recognizing that you don’t want to lose their
attention with unreasonable and outrageous demands.

7. Look For Clues In What The Mediator Tells You

Sherlock Holmes you’re not. Columbo maybe. Realize that the
mediator is sworn to secrecy. He will not divulge information from the
other side without their permission. On the other hand, the mediator uses
other communication means in order to encourage you to think about and
consider information he just learned from the other side. Listen for the
clues and examine their meaning, while respecting the confidentiality of
the process.

8. Plan The Exchange of Information

Be strategic about the pace of the process. The mediation is
generally broken down into two component parts: (1) the receipt of
information; and (2) providing information. You need both to work
concurrently in a competitive mediation to achieve your objectives. The
method by which you permit information to be disseminated will make the
difference between success and failure. One strategy I have seen work is
to question the mediator before he leaves the room about what he intends
to share with the other side. At the same time, you are sensitive to the
importance of assuring that what is shared is what you want shared, and
handled in a way that puts the correct spin on your side of the case. That
way you will be in a stronger position to anticipate the response and
prepare your next move.

9. Committing The Other Side To Your Principles

Assume for discussion that in the whistleblower case above you
feel that the conduct of the company was wilful and subject to punitive
damages. By simply asking for punitive damages in the mediation you are
likely to experience resistance from the other side. Instead of asking,
another effective approach is to ask the mediator to explore the conduct
with the other side with an eye toward obtaining their verbal
acknowledgment that they might have exposure to punitive damages if the
case goes to trial. I have seen numerous cases where the value of
settlement increases substantially upon achieving that modest commitment.

10. Control The Use Of Confidential Information

Back to the fishing illustration, the “tit for tat” approach got
them hooked at the end of our line, but the problem is, you are still far
apart from settlement. You are still aware of additional information about
the government investigation of the company which you might be willing to
share. Assuming the other side has begun to cooperate, it’s time for you
to forgive by providing the information along with a request for
additional money.

11. Learn How To “Dance”

Each negotiation is a series of steps or concessions. The early
portions of the mediation are over, your client did well in the opening
session, and you have finished framing the issues with the mediator. You
have started cooperatively, retaliated when your opponent competed by
insisting on a high settlement number well out of their reach, you forgave
once they acknowledged there was more exposure, and now you are ready to
negotiate the real deal.

Sometimes known as distributive bargaining, this is where the pie
is divided up. Remember, each time one side gives up something, the other
gets something. That means you need to give yourself plenty of room to
come down from your initial demand or you will give up too much. Each step
in the negotiation requires some form of concession, and is like a “move”
in dancing. The first step is usually the biggest— usually you or the
other side will offer the most money and it will happen fast. From that
point forward you can expect each additional move to take longer and
involve a lot less money.

Don’t short circuit the dance. Many people at this point get
anxious. They start looking at their watches and are hoping the case will
be over quickly because they are uncomfortable with the concept of
negotiation. They are tempted to tell the other side what their bottom
line is and be done with it. This is a mistake. By short circuiting the
dance, you will allow your adversary to try to take more from you in the
negotiation. For example, if you tell the other side that your bottom line
is $50,000, and they were inclined to pay it before you told them, they
will likely offer something like $40,000 with the expectation that the
mediator will come to the rescue and suggest you split the difference.
Short circuiting the dance just cost you $5,000 because you will, in all
probability, agree with a split the difference proposal. Don’t respond too
quickly to proposals.

12. Anticipate Internal Bargaining Disputes Within The Defense

During the negotiation, it is safe to anticipate that there will
be an internal bargaining dispute between the defense attorney and his
client, the client and the home office of the company, the broker and the
company, and so on. Have confidence that the mediator will check this out.
This is your chance to do a little divide and conquer through the use of
the mediator.

13. Consider The “Mediator’s Proposal” As A Tool To Close The Gap

Don’t ever be afraid of an impasse in the negotiations. A good
mediator will not let the parties simply walk away without trying to come
up with some alternatives. At this point, you might suggest that the
mediator make a proposal to settle the case. The proposal would be
presented confidentially to each side and only the mediator would know
whether it has been accepted by all parties. That way, you don’t get
punished for making a big move at the end. The other side will only know
you made the move if the case settles, which is your goal in the first
place. This will also result in the other side moving upward toward your
goal because the mediator’s proposal is usually a type of compromise that
leaves both sides equally unhappy.

Formulas like this are educational models to consider. In the
final analysis, you should feel free to utilize the style and approach
that has succeeded for you in the past, knowing that you now have some
additional tools and insight to draw from in the future. “Tit for Tat”
allows you the flexibility to compete in order to avoid being vulnerable,
yet cooperate in order to achieve a mutually beneficial and lasting
outcome.

© 1998 Jeffrey Krivis

                        author

Jeffrey Krivis

Improvisational Negotiation. This phrase summarizes Krivis’ philosophy for a successful and dynamic mediated negotiation. A successful mediation needs both keen legal insight gained from years of litigation experience and cannot be scripted. Exploring this idea with further study led Krivis to venture on the stage as a stand-up comedian. Ultimately,… MORE >

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