More on Bad Faith in Mediation

Gini Nelson at Engaging Concepts recently alerted me to John Lande’s recent and excellent article, Principles for Policymaking About Collaborative Law and Other ADR Processes.  There is much in this article to recommend it, including observations and recommendations about regulating ADR policy and practice.   What caught my attention were Lande’s comments about “bad faith” mediation, a topic we’ve been following in the Couts.

Good faith in mediation, notes Lande, “is like mom and apple pie—it’s hard to be against them.  .  . Many people

think that they know bad faith when they see it. They “know” that bad faith in mediation is when one side—the other side—refuses to make a new offer or what they view as a “reasonable” offer.  This conduct clearly grieves some litigants, lawyers, and judges who would like the courts to sanction the alleged offenders.

In virtually all the final reported opinions on this issue, however, the courts have decided that this conduct is not sanctionable bad faith.  The courts have decided that it would be inappropriate to sanction this behavior, which is impossible to adjudicate without evidence about communications in mediation and the participants’ state of mind.

Even proponents of good faith rules recognize that judicial second-guessing of participants’ states of mind would be an inappropriate judicial encroachment into the mediation process.  As a result, the judicial interpretation of “good faith” has come to mean attendance at mediation (possibly with a representative having “sufficient” negotiation authority) and submission of any required premediation materials.

The result is that the good faith rules do not prohibit what people think of as bad faith.

“Bad Faith” Negotiation Strategies and Tactics

In our recent survey (with 78 responses) participants were asked to identify which of several acts  constituted bad faith negotiation practices or strategies:

Those that garnered the most votes were parties lying about facts important to resolution (65.83%) — which would likely constitute grounds for rescinding any deal reached by the parties due to fraud — and a refusal to compromise “without good reason” (59.76%).  Withholding information important to obtaining a “fair” deal garnered less than half but nevertheless a substantial number — 40.51% — of the “votes.”  Again, this type of behavior could well constitute fraudulent concealment and is subject to its own set of sanctions — rescission and damages. **

Refusing to compromise with good reason (4.5%) however, and not compromising “enough” (3.4%)received so few votes that we must conclude our survey respondents accept these activities as perfectly appropriate when parties are attempting to negotiate  settlement, whether in a mediation or outside of it.

The Importance of Reason Giving

My friend the settlement Judge Alex Williams likes to tell his disputants that he needs “a number and a reason” when shuttling offers between the parties.

As we’ve discussed before, any reason whatsoever, “reasonable” or not has a salutary effect upon people’s willingness to accomodate their fellows See “Why — an Anatomy of Explanations“).    More on the dynamics of reason-giving in negotiating the settlement of your disputes tomorrow.


*  For individual responses to the question, “what constitutes bad faith negotiations?” click here.


Victoria Pynchon

Attorney-mediator Victoria Pynchon is a panelist with ADR Services, Inc. Ms. Pynchon was awarded her LL.M Degree in Dispute Resolution from the Straus Institute in May of 2006, after 25 years of complex commercial litigation practice, with sub-specialties in intellectual property, securities fraud, antitrust, insurance coverage, consumer class actions and all… MORE >

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