In my last post, I promised to explore how the current commercial mediation model might be “tweaked” to unlock the full potential of mediation. There seemed to be a divide between “interest-based” or “facilitative” mediation (which is the focus of most mediation training programs) and the commercial mediation model.
Is there a way to preserve the foundational principles of interest-based negotiation and mediation while venturing into the world of commercial mediation?
Experienced litigators and some mediators have remarked that commercial mediation is really a purely distributive exercise which is only about the money. Is that ever really true? I would be very surprised if careful preparation couldn’t unearth at least one important non-financial interest. Clients (including corporate clients) often have a number of important underlying interests which might include a desire to have a “voice”, preserving their reputation, a need for apology, confidentiality, privacy, timeliness, repairing ongoing relationships etc. In addition, counsel participating in mediation may also have interests (ensuring their clients are satisfied, achieving resolution to reduce client risk, etc.). Participants representing corporate parties can have personal as well as corporate interests at play.
As John Wade pointed out in a seminar last week, parties in commercial mediation have interests but they may not be willing to share them with other parties or to have the mediator “leak” that information. For example, a business owner’s preference to visit his ailing mother during the week scheduled for the impending trial of the dispute may be an incentive for a richer than expected settlement range. Mediators need to know and explore these interests as they may lead to creative settlement options.
So if interests are important, how can they be harnessed effectively in a commercial mediation?
I was glad to see the April 10th Slaw posting from my colleague Michael Erdle: “Blended Mediation: A Practical Approach to Commercial Dispute Resolution” which touches on this important topic. He refers to Troy Peisley’s article promoting a “blended mediation” model which starts with a facilitation phase and, if no settlement results, switches to an “evaluative” approach. In advocating for a facilitation phase, this model assumes that parties have interests that should be explored. However, I do wonder whether the gravitational forces that caused the parties to select a mediator capable of directive techniques might overwhelm that attempt and hasten the evaluation phase. Michael’s later comment suggests that a less linear approach to interests is preferable: “The best mediators are able to shift back and forth between facilitative and evaluative styles, as the situation requires”.
Dwight Golann, Professor of Law at Suffolk University Law School, has tackled this issue in his article “Beyond Brainstorming: The Special Barriers to Interest-Based Mediation, and Techniques to Overcome Them”. He begins with a story about a mediator who, shortly after completing a community-based mediation program, conducted his first mediation (a employment discrimination claim) and realized he “wasn’t in Kansas anymore.” Prof. Golann then identifies barriers to an interest-based approach in commercial mediation, including:
- Repairing (or preserving) relationships may not be realistic
- Mutual mistrust (exacerbated by the allegations in the lawsuit)
- Availability of other options (other suppliers, other employees etc.)
- Role constraints: Counsel may believe they have to be “warriors”
- Lack of the right people and information needed to consider out of the box solutions
- Lack of enough time
- The usual obstacles to negotiation, but intensified.
In the face of these significant challenges, he concludes:
Once a relationship has ended, however, litigants and lawyers typically focus on legal arguments and positional bargaining. Because of this, mediators taught only interest-based techniques will not be able to facilitate the process most commercial litigants want to use.
So what to do? Commercial clients demand that mediators have a wider range of techniques at their disposal but mediators should not abandon their interest-based training. Professor Golann suggests some techniques to facilitate interest-based bargaining including:
- Engage in pre-mediation preparation and ensure the right people will participate
- Don’t be surprised by a process initially dominated by legal arguments and money
- Pursue interests, but keep expectations modest
- Suggest that interests be considered in parallel to monetary issues
- Be open to, but don’t gamble on, a relationship repair
- Encourage private meetings between counterparts (party to party for example)
- Deal with mistrust directly by allowing the parties to voice their views in a joint session
- Encourage the ongoing exchange of information
- Reframe risk as familiar and manageable
My colleagues have suggested the following additional strategies:
- Use detailed pre-mediation preparation as this is where party interests will be revealed and explored
- Use joint sessions strategically (as recommended by Joe McMahon) to promote “real dialogue” between the parties. Avoid defaulting to “shuttle mediation” and keep the parties and their counsel talking.
A skilled mediator can assist parties to a commercial mediation to identify and use their financial and non-financial “interests” to enhance understanding and increase the chances of resolution. In this way, the full potential of commercial mediation can be realized.