Edmund J. Sikorski, Jr., J.D.
Attorney, Civil Mediator, and FINRA Arbitrator
Essential Attributes of an Effective Mediator
By Ed Sikorski
December, 2015
Over the time spectrum of mediating monetaryclaims, impasse causing problems can be categorized as Front End, Middle, and Late. Thefocus of this article is to discuss some of the symptoms and prescriptions to deal with signs of impending impasse in each category.
Front End Impasse
1. The "Who Goes First?" Problem
There is no right or wrong way to get the bargaining process started, the traditional approach is to have the claimant make the first offer. The real question is: “Why go first?”
Studies have demonstrated that "the party that made the first offer shifted less from the initial offer than the party that responded to it. This is known as the “first offer
advantage”. The explanation for it has to do with the
concept of “anchoring”. The first offer sets the anchor
and establishes the negotiating neighborhood. No other
number has the psychological power of the first offer. No
other psychological principle has the same punch as the
anchoring effect. (End Note 1).
The impasse avoidance prescription of the mediator is to
intelligently discuss the advantages and disadvantages of
the foregoing so that the disputants can make an informed
calculated decision over how to proceed or get locked up
on the issue of “who goes first”.
2.
Either or both parties make an unprincipled
“out of the ball park” offer that exceeds or ig
-
nores their own “best day in court” case valu
-
ations and the receiving party declares a) that
the mediation is a waste of time; b) that the op
-
posite party is not negotiating in good faith; c)
that the receiving party refuses to respond un
-
less the offering party gives them a new num
-
ber – thus attempting to have the other side
bid against themselves.
The impasse avoidance prescription of the mediator is to
point out that it may be much more productive for each
party to start the negotiation by making a “principled”
offer, e.g. the defendant in a personal injury action may
make an offer that is based on a line-by-line analysis of
the plaintiff’s schedule of damages with a stated amount
allowed for each category of damage claimed by the
plaintiff.
In addition, no mediator should ever ask any of the parties
to bid against themselves. Parties simply do not negotiate
in this manner. The unwary mediator who ventures into
this trap will instantly lose credibility and impasse will
surely follow.
MID-POINT Impasse
1.
“It’s not the money, it’s the principle”
If the declarant literally means that statement, the case
will not settle without unconditional surrender by the oth
-
er side. However, given the reality that through 2013 here
in the 19
th
Circuit (Florida), only 1.9% of all cases were
disposed of by trial, it is highly unlikely that the declarant
really believes the statement made. (End note 2).
The impasse avoidance prescription is for the mediator to
encourage review and reassessment of damage calcula
-
tion. Those words usually mean that the other side has not
offered an amount of money to settle that does justice to
the loss suffered and the other side is taking it personally
(emotionally). This statement also means that the other
side’s range of settlement is so far out of the ball park that
it feels personal.
2.
“We want them to know we’re serious”
“We don’t want to move too fast too soon”
“They aren’t getting it”
The above are all variations on a central theme that signal
mid mediation impasse. The underlying assumption of
the declarant is that by making small moves, it will result
in the other party making larger moves. This tactic is
recognized as a hardball tactic (End note 3) that is likely
to breed a small move by the other side and the speaker’s
frustration will increase as impasse begins to appear
eminent.
The underlying problem is that the negotiating principle
of reciprocity is being ignored. (End note 4). If the
speaker is indeed getting close to his/her bottom line then
this might be the correct strategy – but if this is a result of
frustration with the length of the process and arises mid
mediation, the speaker is employing a counter-productive
strategy.
The mediator’s prescription is to encourage the parties
to re-think their strategy of movement and develop
a systematic scripted plan of movement
that is not
dependent on the other side’s movement. Negotiation is
really a dance where both parties must make reciprocal
movements if the dance is to be successfully completed
or end. Reciprocal movements have two components: a)
time, and b) distance. Time so that the negotiators can
continually re-evaluate rather than react, and distance,
i.e., how far will they increase the offer or decrease the demand to keep the dance going. The longer the dance goes, the more likely an agreement will be reached as long as both parties keep the distance closing until the end of the dance when time and distance are reduced to zero and the dance is over. People tend to be more sensitive to the rate of concessions than they are to the magnitude of concessions. (End Note 5) This dance pattern is even predictable. (End Note 6) The foregoing does not imply the moves be equal (that is a clear signal that the meeting is in the middle of the negotiating gap) but that the moves are sufficient to keep the negotiating parties in the mood to continue the dance until one or both sides reach their best numbers and the distance gap is narrowed to something that can be bridged to agreement.3.“Nobody gets free discovery”“I’m not going to do their homework for them”The stark reality is that withholding of information in the mediation context is an exercise in futility for 3 basic reasons:First:The mediation model is totally dependent on full disclosure—all parties must have access to the same information. In fact, Rule 10.230(f) {Florida Rules for Certified & Court Appointed Mediators} requires it.Second: Well over 98% of cases settle before actual trial meaning that the withheld information either comes out at some time before trial or the withheld information was/is irrelevant or useless.Third: In the context of insured claims the reality is that carriers will not pay money to resolve the claim without documentation of damage, injuries, and treatment.The mediator’s prescription is to review the forgoing reasoning and encourage the free flow of information.Late-Point ImpasseSymptoms1. “Let’s just cut to the chase. This case isn’t going to settle”2 “Tell them we’re not going any higher/lower”3.I don’t have any more room to move”The commonality in the above indicators is the expression of a high degree of frustration with the negotiating process. These perceptions often drive one party or the other to quit making proposals and guarantee impasse without the parties reaching their best numbers.Prescription1. Help the parties slow down, create additional options, and/or chunk up their respective remaining available range (if they indeed have any remaining range) into multiple moves without getting beyond their acceptable range of settlement. The central idea is to narrow the gap to make it more attractive to close any remaining gap.2. Ask the parties if they would consider and/or suggest a bracket in which they could continue the negotiating process.3. If indeed the parties have reached their best numbers and a seemingly unbridgeable gap still exists, the mediator may then ask the parties to focus on their best alternatives to a negotiated settlement agreement (BATNA) by employing a decision tree analysis to bring new focus to evaluation probabilities and requesting each party to review their respective positions asking the following questions:4. “How likely do you believe you are to prevail (expressed as a percentage) if mediation fails and the case is resolved through adjudication?” 5. The mediator then adds the two responses together. If the sum of the responses exceeds 100%, this reveals that one or both parties are overconfident about their chances of success, because the chance of plaintiff’s success plus the chance of defendant’s success logically must equal 100%. End note 7.6. “Assuming that you actually lose the case in court, how would you explain the 23Essential Attributes of an Effective Mediator: Impasse Avoidance Abilities in Monetary Claimscontinued from page 22reasoning of the judge (or jury) that would most likely be provided to support this adverse judgment?”Asking a lawyer to identify weakness in his/her case is not likely to cause him to access ideas or information that was not previously considered. However, requesting the generation of a specific explanation for an undesirable ju-dicial determination can increase its perceived plausibil-ity and often reduce, if not eliminate, optimistic overcon-fidence. End Note 8.Edmund J. Sikorski, Jr., J.D. is a Florida Supreme Court Certified Circuit Civil and Appellate Mediator with Treasure Coast Mediation Services.2015 Grand Finale Program!This program is free and will begin at noon. Call the Law Library at 772-462-2370 to reserve your spot today! What Every Non-Bankruptcy Lawyer Needs To Know About Bankruptcy Law. December 11th Speaker: Malinda Hayes 2 hours of CLE credit per courseEndnotes for this article can be found on page 25 of the online edition of Friendly Passages
25
Essential Attributes of an Effective
Mediator: Impasse Avoidance Abilities
in Monetary Claims
continued from page 23
End Note 1.
See “First Offer” Barry Goldman,
Michigan Bar Journal June 2015 and
authorities cited therein. See also
Psychological Principles in Negotiating
Civil Settlement; Birke & Fox, Harvard
Negotiation Law Review Spring 1999,
Vol 4:1
End Note 2:
Florida State Summary reporting
System
End Note 3.
Top 10 list of hardball tactics Harvard
Program on Negotiation Daily Blog
August 24, 2015
End Note 4.
Psychological Principles in Negotiating
Civil Settlements
Birke and Fox
Harvard Negotiation Law Review Vol.
4:1 Spring 1999 pp 41
End Note 5.
Ibid, p.43
End Note 6.
End Note 7.
Psychological Impediments to
Mediation Success. Korobkin; Ohio
State Journal on Dispute Resolution Vol.
21:2 2006 p.290
End Note 8.
Ibid p. 297