Thoughts on construction law from Christopher G. Hill, Virginia construction lawyer, LEED AP, mediator, and member of the Virginia Legal Elite in Construction Law

How to Deal with Impasse Caused By the Lack of Authority to Commit

Victoria PynchonFor this week’s Guest Post Friday here at Construction Law Musings, we welcome once again a good friend and better mediator, Victoria Pynchon. Vickie (@vickiepynchon) is an arbitrator with the American Arbitration Association and a mediator of commercial disputes with ADR Services, Inc. in Los Angeles. Her newest book, Success as a Mediator for Dummies covers not only the business of mediation but also best practices for all mediators, whether they choose an evaluative, facilitative or transformational style.

One of the uses of authority by the parties is their claim not to have it.

Ideally, the mediator should have asked the attorneys whether all of the people necessary to close a deal are physically present at the mediation, or, in a worst case scenario, available by telephone.

Even when you believe you’ve managed to gather all the stakeholders and decision-makers together, at some point in the mediation one party or another will throw up their hands and exclaim “I can’t do that; it’s beyond my authority.”

To head this type of stalling tactic off at the pass, you should make inquiries prior to the mediation that provide you with assurances that lack of authority will not scuttle the potential for resolution.

To do that, call the parties at least a week before the mediation is scheduled to proceed and ask one or more of the following questions:

  • Who will be representing the disputant at the mediation?
  • Does she have the authority to close the deal?
  • Are there any limitations on her authority to close the deal?
  • If there are limitations on her authority, why is she appearing on behalf of the company rather than someone with sufficient authority to close a deal?
  • What needs to be done to make sure that person is present?
  • Is there an approval process that must be satisfied to give an unequivocal “yes” to a deal?
  • If so, what boxes need to be checked off to obtain approval?
  • Will the company representative be able to strongly recommend that the company enter into the deal, i.e., virtually assure that the boxes that need to be checked for the deal’s approval will be checked.

Former Secretary of State Colin Powell said that the most important information any international diplomat can have is an understanding of the other party’s “decision cycle.”

Understanding Soviet Premier Nikita Khrushchev’s decision cycle was critical to ending the Cuban Missile Crisis – the closest the world has ever come to a nuclear confrontation.

In the midst of a stalemate with military readiness raised to DEFCON 2, Khrushchev wrote an impassioned letter to the U.S. diplomatic corps, proposing to remove Soviet missiles and personnel if the U.S. would agree not to invade Cuba. The letter was a startling deviation from prior negotiations. When a subsequent letter arrived demanding the removal of U.S. missiles in Turkey in exchange for Soviet missiles in Cuba, it came as little surprise to American negotiators.

A diplomat involved in the negotiations who understood the context in which Khrushchev was operating – under heavy pressure from Soviet military commanders – suggested that the first letter likely expressed the Soviet Premier’s true desires and the second a response required by military pressure. The suggestion was also made that Khrushchev likely wrote the first in an inebriated state.

With this information about the stakeholders to whom the Soviet Premier was obliging coupled with an astute observation about Khrushchev’s true state of mind, Attorney General Robert Kennedy suggested simply ignoring the second letter and telling Soviet Ambassador Anatoly Dobrynin that the U.S. was in agreement with the first.

A secret deal was then brokered for the U.S. to withdraw missiles from Turkey at a later date in order to maintain its principled position not to back down in the face of military threat.

Whether the brokered truce would have been reached absent diplomatic understanding of Khrushchev’s “decision cycle” is anyone’s guess. Regardless, the story demonstrates the power of understanding the decision “checklist” of your adversary before you engage in mediation. That checklist should not be limited to the question whether the “guy with the money” is present at the table, but also who that guy needs to satisfy and with what information before the people to whom he answers will be sufficiently satisfied to close the deal.

For the new and experienced mediator, Success as a Mediator for Dummies is filled with advice and case examples that can help you as a mediating attorney or attorney mediator in getting the best deal possible at the right time with the right people and the right information about the process by which they make decisions.

PS- I’ve reviewed Success as a Mediator for Dummies in an earlier post here at Musings.

Vickie and I encourage you to join the conversation by commenting below or subscribe to keep up with this and other Guest Post Friday posts.

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