Mediators and Breaking through Impasse

For this week’s Guest Post Friday here at Construction Law Musings, we welcome back Vickie Pynchon for a (record?) 5th time. Vickie (@mediatesuccess) mediates with ADR Services, Inc. in Los Angeles, arbitrates for the American Arbitration Association and is the co-founder of She Negotiates Consulting and Training (http://shenegotiates.com).  Victoria has authored two books – The Grownups’ ABCs of Conflict Resolution and Success as a Mediator for Dummies (I personally recommend both). She is the “Dear Abby” of negotiation at The Daily Muse and write a thrice-weekly column at Forbes entitled “She Negotiates” (http://blogs.forbes.com/shenegotiates).

When Christopher graciously offered me his blog for a day to write about my new book – Success as a Mediator for Dummies – my first thought was that only mediators, not attorneys, were my market. Looking over the book now that it is published, I realize it contains a plethora of settlement and negotiation strategies and tactics that I badly needed to know and deploy throughout a twenty-five year commercial litigation career.

I also realized that I’d let Ury and Fisher’s seminal negotiation book, Getting to Yes, sit on my bookshelf unread for twenty years because I never wanted to settle. I wanted to win. The desire to win is what got me up every morning. I knew ninety percent of my cases would settle, but I believed they’d settle only if I made it abundantly clear to my opponents that they wouldn’t want to try their case against me. I believed settlement was all and only about power.

Now I know that settlement is only partially about power. It’s also about influence, relationship, and negotiation strategy and tactics.

When lawyers come to mediation with a recent courtroom success in their back pockets, they often ask me why they should settle when they’re winning, I invariably say “because tomorrow you’ll be losing.”

They know the truth in that.

But to settle, attorneys need to feel that they’re winning. Their clients, too, need to believe they’ve prevailed, not for the “game” aspect of the process, but because they sought a lawyer out in the first case because they were suffering from an injustice.

And if I can’t help lawyers help their clients experience some rough justice, I’m not doing my job.

If you find something useful in the small excerpt of my book below, I highly recommend it to Christopher’s lawyer readers. If you can make yourself a great negotiator – which is not hard once you learn the techniques – you can more consistently and dependably deliver justice to your clients.

So, below, is an excerpt from Chapter 13, Breaking Through Impasse. I hope you find it useful.

Lawyers who are highly skilled at discovering information through depositions, or examinations before trial, know the value of open-ended who, what, where, when and why questions. When it comes to understanding their own clients motivations or those of their opponents, they do not often ask any questions about what’s motivating the parties to the dispute.

In my new book, Success as a Mediator for Dummies, I give a two examples of the way in which the simple question why? broke impasse and resolved the disputes.

Stuck at Five Figures

The first case was a medical malpractice case brought by the widower of a woman who died at a dialysis center. He was adamant that he could not settle the suit for less than six figures. The insurance carrier was adamant that it would not go above $50,000. At this point, many mediators suggest a mediator’s proposal or ask the parties for a hypothetical bracket, i.e., if the Plaintiff comes below $100,000 would you be willing to put more than $50,000 on the table?

In my practice, I try to exhaust every option for helping the parties come to a solution they believe to be “fair” before I put my thumb on the scale of their potential resolution.

In the cases that follow, I simply asked Why?

Q. “Why do you want at least six figures in settlement of your malpractice suit against the dialysis center where your wife died?”

A. “Because I told my attorney when I hired him that I’d read in the paper about a veterinarian who paid $25,000 for the death of a dog. That’s what the dialysis center offered me not to file suit. A dog! If the insurance carrier pays anything less than $100,000, they’ll be treating my wife no better than a dog.”

Q. “Why will $100,000 make you feel like justice has been done, though? Why do you envision yourself being satisfied with that figure?”

A. “Well, I’d like to make myself a photo studio. I used to be a professional photographer, but that was 40 years ago. Now that I’m retired and a widow, I need something productive to do. After paying attorneys’ fees and expenses, I’d receive only $57,000, and I’m told that I’ll have to pay taxes on that, so it’ll all boil down to the price of that dog — $25,000 in my pocket. That’s the absolute minimum amount I’d need to set up my photo studio. It may also allow me to contribute to my granddaughter’s university fees. If I can’t help her out with tuition, I’m afraid she’s going to drop out.”

After I learned what this man wanted to do with his settlement, we made numerous calculations to determine whether he could achieve his desires for less. But we needn’t have bothered.

Something about his concern for his granddaughter and his plans to make a better life for himself softened the insurance carrier to pay him $100,000 for his loss. She stopped feeling as though he was just trying to get money out of her pocket. His story moved her.

She realized he had similar desires to her own. “I worry about my own daughter,” she told me. “I had an ample college fund, but then the recession hit, my husband left me, and I had to invade her savings account to pay the mortgage or I would have lost the house.

Finding and Resolving the Justice Issues

Most attorneys assume they know why their client wants to sue —money. And for an attorney who works in the world of rights and remedies, that assumption is fine.

For mediators, however, that same assumption is toxic. People don’t really go to lawyers or mediators to get money. It’s not an economic system. It’s the justice system.

People seek justice when they believe they’ve been wronged. Perhaps they want money, but they usually want more than that — to express outrage, get revenge, teach wrongdoers a lesson, or make sure that nobody else suffers this same injustice. Asking Why? helps you determine what the parties really want.

When the time comes to settle a case, clients want to know that

*          They’re not being taken advantage of.

*          They’re not getting less than the defendant is willing to pay or paying more than the plaintiff would accept.

*          They’re making the decision. (Nobody’s holding a gun to their head.)

In the first example, emotion played a large role in the settlement.  Diagnostic questions work equally well in “pure money” cases, however, as they do in cases that are obviously emotional – family law, injury cases, employment disputes and the like.

That’s what a dispute about the reimbursement of an overpayment by an insurance carrier to a physician looked like – it was just about money.

The two sides were stuck at a number I considered odd: $107,500 exactly.

The defendant physician thought the insurance carrier (owned by doctors) was trying to chisel him. He saw no reason why he had to repay them the $250,000 they’d negligently credited to his account. He was willing to pay some of it back, but more than $50,000 seemed wrong to him.

After hours of bargaining, I pulled the insurance carrier and its attorney aside and asked, “Why $107,500 exactly?”

In this case, the question Why? revealed one of the greatest contributors to impasse — the hidden constraint tying one of the party’s hands. “We settled another case exactly like this one,” said the insurance carrier.

“We overpaid a lot of doctors, including some who are on our board of directors. In our settlement agreement with one of them, we promised that we wouldn’t settle with anyone else for less than 43 percent of the total we overpaid. In this case, that’s $107,500. We genuinely can’t go under that number or we’d be in breach of contract.”

“May I tell that to the plaintiff?” I asked. “I believe it will help break impasse.”

Sure enough, as soon as the physician found out that a principle of basic fairness (everyone in the same situation should be treated the same) was underlying the offer, the justice issue underlying the money issue evaporated, and the case settled . . . for exactly $107,500.

Many of my fellow “Boomer” lawyers lament that everyone demands a mediator these days. “Why can’t we just settle it between ourselves like we used to in the ‘old days’” they ask. The answer to the question is, you can settle it like you did in the old days. Learn what your mediator knows, couple it with your deep understanding of the conflict, pick up the phone, and suggest a settlement meeting. After, of course, you pick up and read a copy of my new book!

As always Vickie and I welcome your comments below. Please subscribe to keep up with this and other Guest Post Fridays at Construction Law Musings.