The Mediator's Use of Risk in Mediation


Walter Wm. Hofheinz

 

Understanding role of mediator
Position development and negotiation process planning
Tactics during mediation


Understanding role of mediator


There is little consensus regarding the appropriate role of the mediator, other than that the mediator should be "neutral" in the most often used terminology of the mediator community, or "impartial" in the terminology of the Civil Practice and Remedies Code. Typically the impartiality or neutrality of the mediator is defined in terms of not favoring one party over the other, of treating the parties symmetrically, and allowing the parties to reach their own resolution without imposition of the mediator's judgment as to an appropriate outcome.


It is essential to keep foremost in mind that impartiality is not the equivalent of "fairness." In fact, by virtue of neutrality, the mediator is actually proscribed from seeking a "fair" resolution if the disputants are proceeding to resolution on some other basis! "A mediator may not impose his own judgment on the issues for that of the parties." §154.023 (b). Thus even where there are substantial (or possibly overwhelming) power or knowledge differences between the disputants (or their lawyers), it is not within the mediator's role to in any way mitigate the disparity. While there is a difference of opinion regarding the ethical obligation of the mediator when faced with gross disparities of knowledge or power, ranging from a belief that discontinuance of the mediation is never appropriate so long as the parties are making progress toward resolution to discontinuance of the mediation, where the disparity is not overwhelming there is a consensus that no intervention is appropriate.

The mediator is an advocate for resolution while remaining neutral, thus §154.053 (a) of the Texas Civil Practice and Remedies Code provides in pertinent part that "A person appointed to facilitate an alternative dispute resolution procedure under this subchapter shall encourage and assist the parties in reaching a settlement of their dispute but may not compel or coerce the parties to enter into a settlement agreement." (emphasis added) Rules and assurances which the mediator may choose to provide are designed to enhance the probability of resolution, although they may also incidentally enhance a misperception, particularly on the part of disputants, that the mediator is interested in fairness. Examples of such rules and assurances include prohibitions on threats of physical violence, agreements to civil communication without interruption, agreement that only the mediator may determine when an impasse has occurred, and assurance that each disputant will have the full opportunity to be heard. Even such rules are enforced solely in the discretion of the mediator; the mediator may choose to modify or discard them if useful in working toward the goal of resolution.

In working toward the goal of resolution, the mediator's currency is risk-risk as perceived by the disputants. Thus the role of the mediator will include actions and communications intended to enhance the disputants' perception of risk associated with not reaching a resolution as a result of the mediation; in a similar vein, the mediator will divert attention from risks associated with reaching a resolution during mediation. As noted above, it is not within the purview of the mediator to mitigate disparities of power or knowledge. In fact, there are strong incentives in creating a perception of risk to focus on the weaknesses of the disputant or his or her case, often exacerbating a power or knowledge differential which may be present.

The mediator facilitates communication. In cooperating or resisting the facilitation of communication by the mediator, the advocate must continuously bear in mind that the mediator is seeking to achieve resolution, and is directing the communication between the parties toward that end. A mediator will typically be granted substantial discretion over the timing of disclosure of confidential information revealed by the adverse disputant in caucus, such as material facts and settlement positions, as well as disclosable information. In addition, the mediator will be selective about the sequence and content of information conveyed, in order to guide discussion along lines intended to be productive of resolution.


Each of these aspects of the role of the mediator-neutrality but not fairness, orientation toward immediate resolution, enhanced perception of risk on the part of the disputants (and their counsel), and substantial control over the flow and contents of communications between the disputants-is important in enhancing the perception of the risk/benefit analysis affecting settlement opportunities.


Position development and negotiation process planning


While a complete discussion of planning a negotiation (which is what a mediation is, of course), is well beyond the scope and capacity of this outline, it will be helpful to discuss some of the steps of greatest importance.

The focus of the mediator's enhancement of perceived risk should be the client's true interests, in order of their apparent important. Unless the advocate representing the disputant is very skilled, it is likely to be necessary to "read between the lines" to determine the true interests of the disputants. Each party's true interests may or may not be his or her stated interest. If the attorneys have framed the dispute as a strictly legal problem, and the parties' true interest is in maintaining a working business or family relationship, the true interests of the parties will have a significant effect on the strategy adopted.

Connected with, but not identical to the identification of the true interests of the disputants, is identification of extrinsic constraints on the agreement which may be reached. For example, a disputant may have a strong interest in maintaining a business or family relationship, but not have the economic resources available to meet the stated economic interests of the other party.

Two determinations which often can be valuable in allowing disputants to particularize and make more definite the risks and rewards of a given strategy are the "Best Alternative to a Negotiated Agreement" (BATNA), and the "Worst Alternative to a Negotiated Agreement" (WATNA). The BATNA and WATNA, in conjunction with external constraints, also establish the parameters for an acceptable settlement. Analysis of the BATNA and WATNA of the opposing disputants in conjunction with an evaluation of their external constraints may suggest a probable range of agreement. A realistic discussion of the best and worst possible outcomes if no agreement is reached will assist in a realistic risk assessment by the disputants, and an informed decision regarding settlement alternatives.
Unexpected risks are likely to create a greater perception of uncertainty that those which are known. Thus initial discussions should focus on the disputant's analysis of the case and the risks associated with settlement or proceeding through litigation. Role reversal can be an effective tool for allowing the disputants and their counsel to think through, present, and internalize known risks. In addition, however, it can allow the mediator to determine if additional unexpected risks may be present.


Tactics during mediation


Carefully plan the structure and sequence of disclosures and negotiating positions in order to effectively to set up momentum and to communicate information to other side in the sequence desired. Intentionally choose what to disclose, what to withhold, and when to change.

Nudge the disputants toward an item by item agreement, rather than trying to negotiate a package agreement. The momentum created by repeated agreement regarding matters which are really uncontested or not of consequence can be of great benefit as the mediation proceeds into negotiation of the difficult issues presented, since such agreements can give the mediator something to work with in bartering a perceived exchange of value, or even a simple perception of give and take.

Where there are substantial power disparities between the parties, use techniques designed to diminish or enhance the effect on the negotiations of those power disparities or adverse relational patterns. Some actions which can effectively disrupt an enhancement of a client's weakness include interrupting the discourse, assertively reinforcing the client's rights, and requesting a recess to reorient the client, thus the mediator should discreetly attempt to maintain control of process pacing and focus.

It is often useful to have a draft settlement agreement prepared prior to mediation, possibly with blanks for amounts or other negotiable positions, for use during and at the conclusion of the mediation. Such a draft may also serve as a checklist for issues to be resolved.


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