Mediation: What Makes the Difference?

Two different mediations. Each with a completely different subject matter. Different cities. Different months. Different lawyers. One involving a construction contract, the other financial services.

Each reached a stage in negotiations where one party offered an amount, x, and the other party sought an amount, y.  Remarkably, the amounts x and y were the same figure in each mediation and thus the difference between x and y was also the same.  That difference, in the overall scheme of things, was relatively small, significantly less than 10% of the principal sums. Neither claiming party had a specific need to achieve y. There was an emotional component present for both. The paying party was on each occasion funded by an insurer. 

At the end of each mediation, the parties’ principals, the clients, met together in an atmosphere of mutual respect and thanked each other for the attempts made to resolve a difficult and long-running matter. The negotiations were, largely, conducted in a spirit of openness and apparent good faith. 

And yet….in one mediation, the parties reached an agreement and, in the other, they did not. What was the reason for these different outcomes?

As ever, there is no one answer. One might ask what had happened, if anything, during the day in each case to trigger or prime a certain response? I couldn’t detect reactive devaluation. Each party seemed to accept that the other was doing its best. Optimism bias, perhaps, but over such a relatively small difference? Could that really cause a deal to be lost, or a bridge not to be built, when the ongoing court costs would soon exceed the difference? 

Possibly the endowment effect: one has so much invested in one’s own view of value, that objectivity is hard to achieve.  But what about risk aversion? In each case, there was real risk on the facts and good reason to settle. And the bird in the hand theory (“carpe diem”) seemed really important, perhaps especially in the case which did not resolve, so that discounting possible future value to achieve present certainty appeared to be a rational thing to do. And yes, costs had been incurred so that the sunk cost fallacy may have had an impact but everyone was also realistic about future cost escalation. This was the time to reach agreement if possible.

There was one factor which may have been material. In one case, the lawyer was quite proactive in carrying out a pragmatic risk assessment and in helping the client to be realistic too. Expectations were managed and any tendency to exaggerate or inflate was resisted. Concessions were offered in order to expedite the negotiations. In the other matter, the lawyer seemed more reactive and willing to leave decisions with the client. There may well have been a different dynamic in that room, a different client-lawyer relationship and expectation – and of course I was not privy to discussions which occurred while I was not present. 

Further, my own relationship with the claiming parties was marginally different. My attempts to test reality and check understanding of risk were received in slightly different ways, one welcoming, another less so. When combined with the different approach of the lawyers, that may have created a sense of pressure by the mediator in one matter, which may in turn have created resistance. It is difficult to do other than speculate.

And my sense was that insurer attitudes were quite different. In one case the insurer was personally present. In the other, the insurer was on the end of a telephone. Might that have made a difference? 

Incidentally, in the case which did not settle, I subsequently suggested (carefully) that the parties might split the difference but (obviously) only if both wished to do so. To my surprise, that I should even make such a suggestion was met with disapproval by both. Perhaps directing their ire at the mediator would galvanise them. Funnily enough, on my desk that evening, I discovered the book “Never Split the Difference” by Chris Voss. Point made.

The Singapore Convention : Decisions, Decisions

Bill Wood discusses the choice between opt-in and opt-out systems under the Singapore Convention

There is no mistaking the general excitement that has surrounded the recent signing of the Singapore Convention[1]. It is seen as recognition that mediation has now achieved such maturity and acceptance internationally that it deserves the status that arbitration has enjoyed since the New York Convention of 1959.

The place of signing is significant too. Singapore has again enthusiastically grasped the opportunity to brand itself as a new and dynamic international dispute resolution centre.

The Convention has been supported by the signatures of 46  countries including China and the United States. The UK along with the rest of the EU has remained aloof thus far. Indeed the Times recently speculated as to whether our abstention will diminish London’s standing as a forum for international disputes and damage trade generally [2].

Of course it is important to remember that no country has yet ratified.  When the moment of ratification comes countries will have an important choice to make. Article 8 of the Convention allows ratifying countries either to bring the Convention into law as an opt-in regime (where the parties expressly elect to submit to  the enforcement rules when settling) or as an opt-out (where the default setting is that the enforcement rules do apply). Paragraph 1(b) runs as follows:

            “1.  A party to the Convention may declare that

                        … (b) it shall apply this Convention only to the extent that the parties to the settlement agreement have agreed to the application of the Convention.”

There was understandably lengthy discussion of this clause during the drafting of the Convention and it is going to be an absolutely critical choice. Many of us have wondered whether at the moment of concluding a settlement parties will find opting-in an easy matter to agree. One assumes that in the average money dispute the paying party may not be enthusiastic about agreeing to grant his opponent supercharged enforcement powers.

It is easy to forget that because of Article 6 of the EU Mediation Directive EU countries have had similar enforcement  processes available for cross-border mediation settlements for some years now. Where a settlement “results from mediation” the parties, if they all agree, can apply to the court for a Mediation Settlement  Enforcement Order or MSEO[3]. When granted by the court this gives the settlement the enforcement statues of a judgment. Like the Singapore Convention it copes with situation  where proceedings have not yet been started and the parties do not have the option of enshrining their settlement in a consent award or judgment . (Unlike the Singapore Convention an application to the court is needed.)

This provision passed into law in 2011  but, to the best of my knowledge at least, it has disappeared utterly without trace. I have not heard it raised as an issue or  discussed by lawyers or  colleagues at any point in the eight years of its life to date and as far as I am aware no application for an MSEO has ever been made[4]. So much for an opt-in system.

Is the lesson of the MSEO  experience  that  Singapore Convention countries should choose an opt-out  system?

Or is another possible lesson that enforcement is not actually a major consideration and that concerns about enforcement are not in fact a significant brake on the advance of international mediation at all.

Parties mediating disputes post-litigation in England and Wales routinely agree “Tomlin orders”, consent orders embodying the settlement.  Pre-litigation parties cannot do so. Parties should not feel they have to start proceedings to get an enforceable deal. All perfectly rational.

But  in the long list of reasons that over the years I have heard given for parties being reluctant to move to mediation (“I don’t wish to appear weak”, “I don’t know what mediation is”, “Can I trust the mediator/the opposition to respect confidentiality” , “I don’t wish to appear weak”) I have to say I cannot remember hearing  enforcement worries mentioned.

The vast majority of commercial disputes whether domestic or international end in settlement. There is nothing about a mediated settlement as distinct from a negotiated settlement that makes it intrinsically more vulnerable to being disregarded. Where the parties in the negotiations which I facilitate have concerns about the other side’s willingness or ability to perform  that can be policed in the agreement. For example if a party has spent the mediation complaining of poverty and arguing that the case should settle because “there will be nothing left at the end of a trial” then the solution may be to make performance a condition subsequent to the agreement. If the defendant doesn’t pay the claimant’s claim revives.

The Singapore Convention is a welcome celebration of the arrival of mediation as a mature participant on the world stage and a  welcome celebration of Singapore itself. But as one observer wittily  put it: “I’m a huge fan of the Singapore convention, it’s all the stuff about enforcement I am not sure about ”.

How much practical effect the Convention is going to have will clearly  depend on choices yet to be made by the countries who ratify and the choices subsequently made by the parties themselves.


[1] The UN Convention on International Settlement Agreements resulting from Mediation.

[2] “Could the UK’s absence from the Singapore convention harm its post-Brexit prospects?” Times, 5th September 2019.

[3] CPR 78.24.

[4] If you have a drawer full of MSEOs in your litigation department please let me know; I will be delighted to publish a correction.

Brexit and Other Puzzles

Mediators and mediation featured twice in the London papers last weekend.

The first and least obvious reference was a crossword clue: 2 down in Saturday‘s daily Telegraph crossword clue read:

“Press and TV nonsense upset referee.“ (8 letters)

Meanwhile and less trivially the Financial Times carried the suggestion that in tackling Brexit “the UK and the EU should immediately engage a mediator – former President Barack Obama could be a candidate.”

The immediate consequence of that suggestion has been a fascinating online debate amongst mediators. Some think that any such involvement would be a disastrous over-reach for the work we do, and the skill set we possess. Others support the suggestion and think that active listening and re-framing would help the parties resolve their profound structural and cognitive problems.  

My Brick Court colleague John Sturrock asks tellingly why the developed world is only too ready to recommend mediation to others to deal with conflicts around the world but regards its own problems as too sophisticated to benefit from it.

These issues clearly have a distance yet to run and will be tackled in future posts. But stepping back, what is striking is that we see an increasing national familiarity with the whole idea of mediation. The fact is that people and organisations who hit conflict increasingly see mediation as one of the options. It is becoming culturally normal. Increasingly they know (albeit roughly) what it is. Some of them even know the difference between arbitration and mediation.

I do not think that 15 (maybe even 10) years ago “mediator” would have featured as an answer to a crossword clue, still less as an answer to a major national issue.

If I could deconstruct the clue for you it goes like this:

“Press and TV“ = MEDIA

“nonsense upset“ is “ROT“ turned upside down =TOR The whole means some form of umpire.

Media + tor = MEDIATOR

The idea that there might be alternatives to litigation or abuse or violence is seeping rather than flooding into the national consciousness. But one article, one crossword clue at a time it is getting there.

Some Tips for Mediating….

A number of recent mediations have reaffirmed some essentials which I share here in the hope that they might be helpful to others:

It’s not all about the money. Mr A had a very substantial claim against a bank, of which he was a long-standing customer, running into hundreds of thousands of pounds Sterling, most of his life savings. When I asked him, early on, what he needed from the mediation day, he replied “I’d like them to apologise”. The bank’s advice was that it had done everything it could and that it had no legal liability. A familiar situation. However, the bank’s representatives found a way, authentically, to convey their deep regret that Mr A had experienced losses. They said they would do everything they could to ensure it would not happen again.

Mr A was very pleased with what was said. The matter settled for a modest sum overall. The Bank and Mr A conducted the final stage of the negotiations themselves, with support from advisers. Both parties left the mediation process satisfied with the outcome.

When wheels have come off, re-engage the key players. Day two of mediation was designed to build on day one several weeks earlier. However, the parties (employer and contractors in a large construction project) had not made the expected progress. In private initial meetings, one party expressed frustration and a feeling of lack of respect being shown by the other party – and a desire to conclude the process and proceed with litigation.

The engagement between the mediation days had been at a level below the key players. When the principals came together in a private meeting with me, they were able to hear from each other about their mutual frustration with what had happened. They agreed that they needed to oversee the process.

Much progress was then made in joint meetings in which the subordinates addressed the main issues under the watchful eye of the principals. The less senior people (including professional advisers) behaved in a different way with each other as they explored why they had not made progress, where the difficulties lay, and what needed to be done to make faster progress. The most senior people watched, asked questions, summarised, and provided guidance and leadership. The parties probably achieved more in half a day than for several months.

Get under the surface. In a long-running claim worth many tens of millions, the decision-makers appeared to have reached the end of the road. In an effort to find a way forward, we spent four hours going through my ‘Questions for a Difficult Meeting’ questionnaire. The parties prepared privately first and then, meeting together, they alternated in giving their responses.

The nature of the questions is such that they needed to dig deeper to look for answers. This opened up new levels of understanding about pressures, outside constituencies, alternative courses of action, changed realities and validation required for amounts sought. It led to a further discussion about possible settlement figures.

Ask questions. Similarly, in a difficult mediation involving two very senior directors in a company, impasse had been reached. Or so it seemed. But the more questions I asked, about their own ambitions, what others would say about them, how they might have contributed, what they might change or do themselves to make a difference, what questions they needed to ask, what pressures each was under, what they might be missing, and so on, the more they could see for themselves what needed to happen.

I am a great believer in party autonomy. Questions, used well, compel people to take responsibility.

Use a worked example. Many of us struggle with figures. Few of us really get to the bottom of what the numbers are telling us – or might tell us if we understood them. In a mediation involving a business partnership in which property was being divided up in a separation, the lawyers had spent several hours trying to explain what it all meant.

Eventually we got the flip chart sheets up and the parties themselves began to map it all out. It wasn’t easy as there were so many variables around land valuations, compulsory purchase possibilities and development proposals. And the taxation aspects were uncertain. However, for over an hour, we worked it through.

One of the parties was moved to say: “The figures are so much easier to understand than the lawyers’ words”!! Enough said. A satisfactory deal was done.

Encourage forward-looking momentum. When the going gets tough, maintain a process and be clear what that is – and try to ensure that the parties continue to commit to it. It has been said (by Deepak Malhotra in his excellent ‘Negotiating the Impossible’): “Stay at the table even after failed negotiations – if you are not at the table, you are on the menu”.

The job of the mediator is to (a) try to offer the best possible process for the circumstances; (b) keep in touch with and support parties even when there seems to be an impasse and (c) be prepared for a window of opportunity to open up, perhaps unexpectedly. Keep looking for it. In my experience, it often does. And we rediscover that most people, whoever they are, wish to resolve their disputes by agreement.

Provide food. Continuing with the idea of eating, it is encouraging to have endorsement of the value of bringing all the participants in a mediation together to share food. I do this whenever I can, with everyone meeting for breakfast after my initial private meetings. A buffet lunch can also be useful where people can choose to linger and chat if they wish.

I find it is useful to explain why I am doing this and I can now provide academic support that it works: see ‘Shared Plates, Shared Minds: Consuming From a Shared Plate Promotes Cooperation’ by Woolley and Fishbach, Association for Psychological Science 2019.

A similar point is made here about the important role of glucose levels in decision-making.

So that will be pizzas all round for the early evening final push for resolution! It is all food for thought…

Bill Wood QC contemplates the incidentals: food, doors and Pinocchio

Mediation rooms tend to be unremarkable places. They do not have the structure and style of a courtroom.  Yet in these often plain spaces, we are privileged to witness great dramas, personal, commercial even political.  Shakespeare’s reference to “a great reckoning in a little room[1] comes to mind. To be fair he was probably referring to the death of his friend Christopher Marlowe in a fight over a bar bill.  But even that was a mediation of a kind I suppose.

The little room, the environment and the incidentals do matter of course. In fact, they are often memorable.

Now don’t get me wrong. I am not a furniture fiddler. There are those who teach that to lay the foundations of a good mediation you should arrive at the mediation centre long before the parties and make subtle adjustments to the furniture to create the best possible environment. “Could you turn towards me slightly Mr Jenkins, I’m not quite getting your body language”. You know the sort of thing. 

But there are certain rooms in certain solicitors’ offices which I will only ever enter reluctantly, haunted as they are by flashbacks of bruising and protracted encounters from the past. To me they reek of impasse even now.

We see less these days of the old cliche of putting the away team in a windowless room while the home team luxuriate in a light-filled corner suite. And food discrimination is rarer now. (A word of advice to those contemplating serving their own clients a dripping roast while handing a packet of crisps to the opposition: make sure the home team’s room does not have interior windows and the ice sculpture is not readily observable from outside. Or there will be trouble.)

I swear one London firm used to calibrate the lunches it served by reference to the strength of the case they were advancing at the mediation. You knew they had a drawerful of statutory defences when the cheese and pickle sandwiches appeared. But when the roast bass and the braised fennel were served it was likely that their clients were on rockier ground.

Then the stationery drawers: I find a long wait between offers can be enlivened by doing a still life of an apple using the in-house highlighter pens (red, green, yellow – it all makes sense). Or you can take a tour of corridors to see the law firm’s art collection. Victor Pasmore and Howard Hodgkin are ubiquitous (who is complaining). Simmons and Simmons have some quite punchy Tracy Emins which I always enjoy. And I often seek consolation from one firm’s stunning Jim Dine etching of Pinocchio; particularly comforting when the parties’ discussions seem to lack a proper degree of candour.

Climate matters too. I mediated a case about the adequacy of the air-conditioning in an office building. Unfortunately, we mediated on site. The tenant had undoubtedly turned the heating up to maximum to prove his point. But the landlord and his team entered fully into the spirit of things by sweating through the day with their jackets firmly on at all times. “Temperature’s perfect, Bill. Can’t see the problem” says the red-faced chief executive.

Which brings me inevitably to doors.The modern office door is designed to expose visitors to the maximum amount of ridicule. Frequently they are so heavy that only a circus strongman can open them. And be careful. The ones that promise to open inwards open out. The ones that promise to open outwards open in.  And woe betide you if you failed to spot the slider. A really well-designed office features a cunning mixture all three.  Taking Party A’s offer to Party B involves a Rubik’s cube problem of such complexity you are liable to forget the figure. No doubt the local inhabitants derive hours of harmless fun as they watch our struggles. Perhaps it’s reassuring that at 5pm these gifted and observant peacemakers are pushing on a door they should be pulling just as enthusiastically as they did at the start of the day.

I would write more but I think the Claimant is ready for me with a new number.   Now how does this door work?


[1] As You Like It, Act 3, scene 3.

NHS Highland Review

One of our mediators, John Sturrock, was commissioned by the Cabinet Secretary for Health in Scotland to carry out a review of allegations of bullying in NHS Highland.

John’s extensive report has now been published. It explores aspects of the human condition, together with modern approaches to leadership, changes in society, political conundrums and the provision of health care. He also mentions mediation and commends its much greater use!

Read the full report here

Dispute Resolution Clauses In Commercial Contracts

I don’t mean to argue against the undeniable wisdom of inserting a dispute resolution clause in a commercial contract at the drafting stage.

What’s not to like… it makes absolute sense to agree a dispute resolution framework before a dispute arises.

But there is a BUT.

Most clauses, and there are hundreds of versions, are drafted on the premise that the dispute should get to mediation sooner rather than later. Definitely before any arbitration/court proceedings are started.

Some are multi layered; 1) first negotiate, 2) move on to mediate, 3) then arbitrate or litigate as a last resort – often with a carve out for injunctive relief.

Many have strict time frames, often measured in days, so a party to a dispute can force the selection of a mediator and convene the mediation within a relatively short time of the dispute occurring.

Because of this, these types of clauses risk pushing parties through the doors of the mediation room too soon… before the dispute is mature, before the raw edges have been knocked off and certainly before the parties have adequate information about their own or the opposite party’s position and interests.

They come to the table without adequately defining to themselves, and each other, what the dispute is all about – upon what it is they can agree and disagree, without adequate document exchange and to be honest without adequately spending time wallowing in the conflict and all that it brings with it.

The realities of the dispute, some that only come with age – the stress, the cost, the creeping doubt – are missing.

Like a ripe cheese, these things take time.

Paris: The Capital of Negotiation?

Paris has recently had a reputation for confrontation. But a hundred years ago  the allied powers (principally France, the US and Britain led by Clemenceau, Woodrow Wilson and Lloyd George respectively) were in Paris negotiating the Treaty of Versailles. Clemenceau had just survived an assassination attempt. He observed wryly that even after the greatest war in history a Frenchman had taken seven shots at him at close range and only hit him once: proof if it were needed that however dark the circumstances humour always has a role to play.

A hundred years on and the second weekend in February saw the international mediation community (including three of the Brick Court team) descend upon Paris for the festival of negotiation that is the ICC Mediation Competition. Law students from France, the US and Britain and upwards of thirty other countries from all across the globe descend to compete in a mediation moot. Professional mediators conduct the mediations and score the students’ performances.

Political references are still not far away: this year the running gag at the conference was the very notion that Brits should be teaching anybody about process design or negotiation.

The students are hugely enthusiastic and negotiate skilfully, always in English and often a long way from their native language.

They relish the co-operative style of working, clearly enjoying the change from the orthodox models offered in their professional training. Each team gets a confidential briefing setting out their party’s deeper interests and plans for the future. The problems usually offer some crock of gold in terms of future collaboration. One party turns out to have a warehouse full of size 8 left shoes. But wait: the other party has a warehouse full of size 8 right… well you can imagine. Always a win-win. It is great to have the chance of a happy ending and a refreshing change for the jaded ADR hacks who officiate.

And yet, and yet…. It can lead to a relentlessly collaborative approach that ignores the difficult issues and the hard exchanges. We all know that if you don’t acknowledge the anger/disappointment/affront /betrayal that has got you into the mediation you are going to be in trouble later; if you don’t let the monsters into the room they will wait outside and bite you later.

Back in the real world I often recall for parties the shortest opening statement that I have ever heard: three words, the first beginning with “F”, the second being “you”  and the third an anatomical term. As a statement of case it was not only more succinct than the sixteen pages of close contractual analysis offered on the other side, it also kick-started the negotiation far more effectively. Mediators would recognise immediately the opportunity that those words offered. We settled, admittedly at 10 pm. I don’t recommend the three-word approach as a formulation to get you into the finals in Paris. But, as the 2019 winners,  University of Auckland team,  clearly  grasped, some grit in the mix is essential. “This why I am angry. Why are you angry?”

As I sat in the departure lounge I contemplated the zero-sum mediation I was returning to conduct in London; claims on the  aviation insurance market arising from an air crash. Collaboration? Er…no. Future business? Um… with the airline in liquidation probably not.

Sitting at the gate I was surrounded by tired children wearing Micky Mouse ears and their even more tired parents, clearly a tremendous trip. They had all been to Disneyland.

Perhaps we all had.

Geoff Sharp, John Sturrock and Bill Wood attended the Paris competition.

Never Give Up: Persevering in Mediation

 

“If you had not held us back that evening, the deal would not have been done.”

 “Thank you and I wish you well.”

In this post, I return to a familiar theme for mediators and for lawyers acting for clients in mediation: perseverance.

The first of the two quotations above comes from a participant in a mediation spread over four days and nearly one year. It was a complex matter involving many parties and some difficult issues. Towards the evening on day four, a proposal from the claimants was met with a lower counter by the defendants. The parties had laboured hard and the claimants felt that they had gone as far as they could go with the process. Or at least some of them did. Two principals left the building along with leading counsel.

That might have marked the end of the mediation. However, I had a sense that there was more to play for. I expressed my frustration with the situation, spoke with those who remained and suggested a further meeting, one to one, involving one of the claimants’ key advisers and his opposite number. “Let’s give it a go” was the sentiment. I knew that each were keen to find a resolution and that they respected each other. No lawyers were present.

In that meeting, things were said and options were explored that resulted, three weeks later, in a comprehensive deal settling all matters. Only because they went that extra mile. And, perhaps, in hindsight, it was helpful that the others had left early.  They provided the space for someone to step forward who could bring about a change in the pattern.

In the second quotation are the words of the chief executive of a large supplier of services to the public sector. He spoke these words at 9.45 in the morning, less than one hour after the start of the mediation. Breaking with convention, and with the agreement of all concerned, I had arranged to start the mediation with a meeting of the two principals on their own. All of the legal and technical stuff had been well covered by the lawyers in the paperwork: the principals had met previously and they knew each other.

The purpose of the meeting was to explore whether either party would be prepared to move from an earlier stalemate. In a friendly and frank conversation, one explained to the other that, with further inquiries carried out and substantial further costs incurred, he was in fact not even able to start at the previous point. His counterpart responded that, in that event, there was no point in continuing. He departed the meeting with the words set out above.

Four hours later, the parties’ lawyers were drafting a settlement agreement. What had happened? We didn’t accept things at face value. We stuck at it. By “we”, I mean myself and the two principals, supported by their teams. We continued to explore, to dig deeper, to try to understand what was really going on and what each needed. We reminded ourselves of the cost of the alternatives to a settlement. It was a classic piece of positional bargaining in one respect, each trying to find out how far the other would actually go – or give. But without the structure and safety of mediation and a mediator with whom to talk frankly and confidentially, it is unlikely that the principals would have had the ability to reach an outcome. The lawyers supported them well throughout.

One of Scotland’s lesser known music groups was a band known as Pilot. They had a lovely little song entitled “Never Give Up”. It remains one of my favourites – and an inspiration in my work.

Representing Small Players in Multi Party Mediations

A good piece from Don Swanson, a lawyer out of Omaha, Nebraska, on representing bit players in large multi party mediations – we’ve all been there – other parties focused on the ‘big’ issues and it’s hard to get anyone, including the mediator, to focus on your supporting actor who has lower tier, but still crucial-to-them, issues.

Some extracts follow, but Don’s full article repays reading;

Many small players get run over—and their positions obliterated—in multi-party negotiations.

Small-parties are faced with limited choices on how to proceed;

1. Take an unbending position and hold out to the end—this is an all-or-nothing approach

2. Take an unbending position for as long as possible and then accept the best deal that’s offered

3. State an opening position and engage in active negotiations to achieve the best-possible result

Sometimes, the selection among choices is actually imposed upon a small-party by the dominant ones.

Otherwise, the answer on how-to-proceed is a judgment call in light of all known facts. In large part, the judgment call turns on the traction a party can create for its position. And traction turns on the answer to this question:

How significant is my position for the dominant parties?

Here are some traction-related questions to ponder:

>If I hold out to the end, can they move on without me—or do they need my consent?

>If they can move on without me, how valuable would my consent be to them—and what might I achieve that’s commensurate with that value?

>As a practical or legal matter, what do the dominant parties want or need from me? And what would they be willing to provide to get my consent?