Six Ways to Ensure Your Construction Mediation Will Fail

For this week’s Guest Post Friday, Musings has a real treat. Victoria Pynchon mediates and arbitrates complex commercial litigation, including multi-party construction disputes, for ADR Services, Inc. in Los Angeles, California. She blogs about negotiation at the Settle It Now Negotiation Blog and about the mediation and arbitration of intellectual property disputes at the IP ADR Blog. You can also follow her on Twitter here.

1. Leave the Decision-Makers at Home

A mediation – particularly a multi-party construction mediation – is more drama than law; more character than rights; and more emotion than reason. Mediation, like trial, requires the lawyers to restore the texture, dimensionality, morality and personality back into the dispute that we lawyers flatten for the purpose of satisfying the law’s requirement that we litigate only the “relevant” facts necessary to satisfy legal “forms of action.”

On game day, it’s not the mediator, but the parties themselves who must decide who is bluffing and who is not; what allocation of responsibility among the parties feels fair; whose claims of poverty or freedom from liability have the ring of truth; and, which parties have deeper pockets or greater negotiation flexibility than their attorneys have claimed.

Just as you wouldn’t want your jury to “call in” their verdict, you don’t want the mediation decision-makers miles away from the mediation table when the cards are being played. Remember that people seek out lawyers only when they feel they have suffered an injustice. Righting that wrong requires more than money or dismissal. It requires the belief that you, the attorney, have gotten your client the very best deal possible in light of the facts finally revealed, the personalities involved and the hard realities faced.

2. Leave Early Because the Other Parties are Acting in Bad Faith

“Americans” (and I use the term loosely for anyone, citizen or not, who buys retail) become uncomfortable after two or three bargaining “moves,” i.e., offer, counter-offer, counter-counter, “see you in Court!”

Until the mediator tells you she is convinced the parties will never reach agreement, the potential for a mutually beneficial settlement continues to exist. As I often say, “as long as your opponent is moving in your direction and you have the authority to move in theirs, the negotiation should continue. Unless you’ve hired a disreputable or simply unreliable mediator, don’t ignore her suggestion that a little patience with the process might result in a big reward for your client. If you are concerned that your movement will set a ceiling or floor without resulting in a deal by day’s end, your mediator should be suggesting bracketed or hypothetical offers and counters. What you should never do is pack up your litigation bag in frustration while the mediator still has tricks up her sleeve.

3. Refuse to Permit Your Client to Talk to Their Opponent.

To everything there is a season . . .

Rigidly adhering to any mediation format (separate caucuses or joint sessions only, for instance) reduces your ability to strategically use whispered confidences in the hallway; candid conversations between counsel without their clients; meetings between the mediator and a difficult party; discussions between the mediator and one or more of the attorneys without their clients; and, meetings between the disputants in complete privacy.

There are dozens of different permutations and combinations of attorney-client-mediator dyads, triads and the like. Each different relationship draws out of us someone slightly different. Depending upon our “audience,” we are more or less comfortable, deferential, authoritative, subject to persuasion or persuasive.

During the course of the mediation, your neutral studies these dynamics and should be making suggestions about which parties can most effectively be discussing which aspects of every proposed deal. Not only should you carefully attend to mediator suggestions about party and attorney dynamics, you should alert your mediator to dynamics of which you’re aware that might be helpful in deploying personality resources on game day.

4. Let the Mediator Bully the Parties

A mediator who is bullying you or your client to settle simply hasn’t gotten the knack of asking questions and creating opportunities. She’s still too used to wielding power. If it’s important enough to spend your day mediating, it’s important enough to tell the mediator that you do not want her bullying any of the parties.

I was co-mediating the final day of a construction dispute with twenty-five to thirty parties when my colleague lost his cool. By two in the morning, a single sub-contractor was holding all parties hostage to his refusal to settle even though he was alone in having achieved all but complete victory – the Plaintiff having agreed to exchange mutual releases to settle with him. Nevertheless, the sub adamantly refused to give up his right to bring a malicious prosecution action against the Plaintiff.

“He needs a woman’s touch,” my co-mediator suggested.

Male or female, someone needed to learn why this single defendant had become so intractable. A bit of questioning revealed that early in the litigation, the sub’s attorney had inadvisably assured his client that he could win a malicious prosecution suit. Counsel was not about to back down now, particularly after he’d been harangued by my colleague in front of his client. I was all but certain the sub had no intention of spending further money litigating the case. Why was he clinging to his right to sue? The three of us talked for 45-minutes while the rest of the parties waited. I don’t know what it was in that conversation that revealed the problem to me. I only know that at some point I realized that the sub could not justify the money he’d paid his counsel unless he emerged from the litigation victorious.

“You know,” I finally said, “you’re the only defendant who actually won here.”

“How do you figure that?” asked the sub, eyeing me with suspicion.

“Everyone else, no matter how unlikely their potential liability, had to pay the Plaintiffs to be released from the case. Your attorney is the only attorney who negotiated a settlement for nothing. He won! And the case promptly (and finally) settled.

Remember that settlement is not about power or authority. It’s about influence and you cannot influence another human being by bullying him. You can only influence him by asking questions, listening carefully to the answers, and responding to the need he is expressing. Not only will hectoring fail to produce the desired result, it will usually trap the bullied party into a position he has no actual desire to maintain. Restrain the pit-bulls and release the attentive questioners. Theirs is the Kingdom of Resolution.

6. Negotiate in the Nano- and strato- spheres.

Spending a significant amount of time negotiating numbers that are far out of the range of potential agreement is not only a waste of everyone’s valuable time, it strains the parties’ patience and often results in impasse even when their “zones of potential agreement” overlap.

The party with the courage to step up to the line of potential impasse is the party who will gain the bargaining advantage. Study after study has demonstrated that the negotiator who makes the first reasonable offer is the party who will “anchor” the negotiation in his favor, not only at the moment the offer is made, but throughout the negotiation.

These few mediation pointers may seem obvious in the way a carefully crafted line of cross-examination seems inevitable. But as anyone who’s ever tried a case, or mediated a complex construction dispute knows, a successful outcome requires rigorous planning, enormous patience, and years of practice.

Choose your mediator carefully and orchestrate your bargaining moves as carefully as you would stage your jury trial. With the right neutral and the right parties at the right time, not only will your case settle, but the settlement you achieve can feel like victory.

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UPDATE: Vickie has been kind enough to discuss this post in another of her insightful articles at her Settle It Now Negotiation Blog.