Challenging Assumptions in Mediation

I share examples from two very different mediations, each challenging some assumptions about what can be achieved – and how.

Number one: a dispute about interpretation and application of a limitation clause in a commercial contract. No factual dispute at all. In a large construction claim arising out of building a public facility in an overseas jurisdiction, the parties had agreed that the claim was so high (multi-tens of millions) that whatever the decision on the matter of interpretation, it was unnecessary to explore the figures. Similarly, primary liability was not in issue. Subject to a couple of further interpretation variables, if the clause provided for A, then x was due; if B, then y would be payable.

Classically, this fell into that small category of cases for which mediation has often been deemed inappropriate – or unnecessary. It was a simple point of law for a judge or arbitrator to decide. But here we were at 11.15am, after the lawyers had met with me to prepare an agenda of the issues requiring to be addressed, each party (lawyer and client) laying out its arguments in front of the other’s legal advisers and client. They were analysing legal propositions and the risk attaching, with me posing some questions about the meaning being ascribed to certain words in a contractual cap and inquiring about the advice tendered by leading counsel.

It still took several hours to explore the risks and opportunity costs, test the realism of some key arguments, and deploy “Mr Justice Not Very Bright “ in each room. For one reason or another, this notional judge tends to ask awkward questions, as if he does not understand the points being made. He proves to be a useful tool on occasion, sometimes dropping hints about how he might view things in a court. He performs the same role privately for all parties, but in different ways of course. And he always qualifies his comments with the observation that he does not have complete knowledge and that parties and their lawyers are completely free to disregard his remarks.

Incidentally, while my penchant for inviting the clients and counsel to join me for a quick pastry or “breakfast” at an early stage does not always meet with ready approval, here it worked a treat. In this session, the principals soon discovered a common bond from the past in their industry, and this gave them much to discuss throughout the day, as well as generating the goodwill to enable them to meet and complete the deal when the lawyers needed that extra commercial input later in the day. It was in their corporate interests to reach an agreement and they did, on the back of the risk analyses which the day had encouraged and empowered them to conduct.

Number two: an oil and gas employment dispute involving a very senior strategic adviser and his erstwhile employer. It seemed to be a classic for a bit of relationship-building, as hurt and humiliation were high on the list of the consequences of an unforeseen redundancy. It also seemed to be as much about ego as about money.

The two protagonists could still speak fairly amicably to each other in a kind of mentor/mentee relationship. Inviting them to meet together early in the day would have been an obvious strategy for this mediator, with an opportunity for each to set out how they saw things, get things off the chest, give explanations for what had happened, enhance understanding, acknowledge the other, and so on.

However, contrary to many of these types of cases, there was no meeting at all between the parties until they came together to sign the settlement agreement at 5.30pm. All negotiations were conducted through or with the two very able lawyers. And when the parties did meet, the clients were soon chatting away, almost as if they might start their working relationship again. They won’t but the geniality confounded many assumptions I might have made. Keeping them separate until an acceptable arrangement had been achieved had worked well.

One small, notable, deviation from the norm may have been the key in this one. I had arranged to meet each party and his lawyer at my hotel the evening before, just to “get to know” them. At the crossover point between meetings, they bumped into each other for the first time in months. They had a pleasant exchange of words. Maybe, in that informal environment and at that moment, that meeting was all that was needed to take the edge off the anxieties about what was to come next day and temper the stored up hostility of the past.

We’ll never know, but what we do know as mediators is that we are always learning and that there is no fixed way to do this.

Olympian Mediation?

The Olympics have come and gone with all of the emotion and inspiration they bring. In our recent, fully-subscribed, residential Summer School on mediation skills for leaders, we reflected on the learning from Rio. We watched a video replay of the men’s taekwondo -80kg final in which Team GB’s Lutalo Muhammad lost to his Ivory Coast opponent in the last second of the bout, giving the latter his country’s first ever Olympic gold medal.

Unmitigated tragedy for one, unremitting joy for another. Tears of pain and tears of exhilaration. And it all swung on the events of one second. A momentary loss of concentration, perhaps assuming that victory was assured. On the other hand, a moment of persistence, never say die, it’s not over until….

Which athlete will benefit most from this experience? That may not be as obvious as it first appears. Loss and suffering are an essential part of the human journey. Gold medals are rare. Success may be measured just as much by how we deal with failure as with a “winning” achievement.

That Olympic story gave our course participants the prompt to discuss how much in life happens in the margins, in a moment. And to recognise that how we react under pressure in that moment may define us and the future of others, whether as mediators or more generally. Indeed, we realised how such a future may be determined simply by a remark made or a question asked, a raised eyebrow or a furrowed forehead. We realised how precision of language, a short pause, self-discipline in reacting to unforeseen events, can all shape a conversation, a new business alliance, our approach to impending conflict or indeed whether we go to war. In that last example, for one or two in exalted positions, that reaction might even determine whether we press a certain button or not.

At the same time, top athletes must learn to perform without hesitation: if Usain Bolt had paused in the 100 metres final, he would not hold three Gold medals from each of the last three Olympics. In another setting, the ability to react in the heat of the moment with poise and skill may mark out the master surgeon from his peers. And what about the police officer faced with an apparently armed person seemingly intent on killing? No time to delay…. Sometimes the choices we make, in spite of months or years of training, will lead to outcomes which will be judged using a binary, “hindsight is a great thing” assessment, as “wrong”.

In our mediation Summer School, these considerations led us to acknowledge the need both to practice effective skills until they become second nature and, paradoxically perhaps, to be much more consciously aware of what, why and how we are doing or communicating at any particular moment – which might just be a pivotal one in a mediation or meeting. Touchpoints, we might call them – or, as a senior team leader in UK Sport just back from Rio described them to me, “traceable moments”.

In some recent mediations, I have been aware of several of these traceable moments. There was the meeting of an estranged mother and son in a mediation about a family business. They hadn’t spoken for many months and the judgment call for me was whether to leave them alone to chat or sit with them in case animosity spilled over. I took the former route, almost instinctively, and they reconciled in the privacy of being on their own, which made resolving business issues much easier. Of course, what had gone before, quite consciously, in setting up the meeting (discussing what, who, how, when, where and why) had been important to that rewarding outcome.

In another situation, I chose to break a golden rule not to use judgmental language. I described the conversation between two business people as akin to “wallowing in a morass of self-indulgence”. (They had already indicated that they, frank speakers themselves, would welcome frank speaking from me). For one, my approach worked really well. For the other, some immediate repair work was required. Sometimes, we as mediators need to take a risk. Even then, though, managing the risk is important: to minimise the prospect of an adverse outcome and maximise the positive impact of an intervention. We can ask ourselves, in that moment of pause: “Why are we making this point at this time to these people in this way using these words?”

In a recent article in Time Magazine’s online resource, readers were treated to nine questions they should ask their doctors. The last was “What question have I not asked that I should have asked?” For some of us, seeking only reassurance, that might of course be the very last question we wish to ask our doctor! But, as a mediator, it is one of the most powerful. “What else do you think I need to know which will help me to help you all?”, I asked of the chairman of a public governance body, just as I was about to close off our meeting. What came in response was gold dust – and enabled me to begin to reshape the whole process. It was a question in the margins but it was crucial to our progress.

I conclude with an example that may not seem to be about margins at all but which might be described as substantial risk-taking, or foolishness! Not that long ago, in a multi-million pound matter in which the parties had the luxury of designing the process, we decided to have an initial day of mediation (or facilitation, just to soften the tone) followed two weeks later by two further days. The first day was all about confidence-building in delivering a long term project, renewal of trust, sharing frustrations, identifying big issues (and problems), recommitting to the overall strategy, (re)building relationships and exploring communication.

In order to try to make the best of this, I arranged the day as a hybrid: a mix of the first day of the Summer School I refer to above (presented as a kind of “Master Class in Contract Management”) and the opening stages of a traditional mediation. It seemed to work a treat. There was an element of surprise – and real engagement – in our discussions about developments in neuro-science and cognitive errors (including the fight and flight responses and system 1 and 2 thinking), conceiving a proper structure or framework for negotiations, and the ideas behind interest-based/gain optimising theories for creating value (I try to avoid using “win-win”).

We even discussed that taekwondo final and the learning from it. Using their own situation and differences, the parties explored and practiced questioning skills and (real) listening (in pairs), along with strategies for really effective preparation (in groups). We recognised that this sort of system 2 work is energy-consuming and tiring. It took – and takes – conscious effort. Just the sort of effort that Olympic athletes commit to for years.

The result of the day was lots of little marginal gains, specks of gold dust, which would enable the parties to collaborate in a way they had not had the capability to do thus far. After an exercise involving a flip chart and sending the project leaders from each party out of the room to draft a joint statement of purpose, the whole group agreed that a reframed project objective would be to “work together to build a truly world-class…..”. In setting that objective and beginning the journey with new skills, they had become Olympians themselves.

In Mediation, Timing is Everything – Put the Money Last?

Three recent mediations in three jurisdictions raised some interesting issues.

Each mediation was different. One involved a claim for professional negligence against a firm of solicitors for (allegedly) incorrectly including an occupied building in the sale of a large piece of land. The sellers were unhappy that many years had elapsed since the transaction, a number of them passing while attempts were made in court and elsewhere to rectify the error.

Another involved a large-scale IT project in the Middle East where invoices for a significant amount remained outstanding to a contractor and the “employer” had since assigned the contract to another company. Again the passage of time had magnified the frustration for the claiming party.

The third featured a unique engineering project which seemed to have failed spectacularly. One challenge was how to measure the loss and assess the appropriate means to rectify the problem on the ground, whatever errors may have led to the initial failure. The situation was exacerbated by multiple party involvement and the need for ratification by external constituencies.

Learning?

I found myself pondering the learning from these diverse and rich experiences.  The utter humanity in each was a point to explore. Even the most commercial dispute was heavily influenced by the relationships (or lack of them) at senior levels.  Part of the function of mediation in each matter was to build or restore a level of communication sufficient to enable a modicum of trust to be established on the day – and, in three of the four cases, to enable the principals to engage directly in the final stages of the negotiations.

One or two quotations emphasise the point: “We have never had a forum to say what was said today”; “All I needed was to have that dialogue, I have never been able to talk to [x] as I am to you now”; “The problem was not the sending of the message but not being offered the opportunity to comment on the content”; “In order to have the conversation, we needed all the people here”.

Addressing Money

The other big point was the timing of addressing money claims. Each mediation had financial aspects, whether for the purpose of rectification, as compensation or as debt apparently due. In one, parties and their representatives were content to be guided by me as mediator on the timing.  As a result, the financial talks were relatively straightforward in so far as that is ever so in cases like these. The point was that, with other issues on their minds (how they felt about the other party, the need to understand past events, exchange of new information, risk analyses, and so on), it was more effective for the parties to address these issues in advance of bargaining about money.

In the other matters, one party in each mediation wished to move early to making an offer.  The reasoning was that such an offer would establish whether the other side would be prepared to do a deal or if the gap was too great to bridge.  As one negotiator put it to me: “The sooner we make an offer, the sooner we’ll know whether it is worth staying on, or if we can be on the next plane home.”

That would of course be true but, in my view, the prospect of being on the plane home could be much greater with such an approach. People have many reasons for taking the stance they do, including a disinterest in whether the matter resolves now or later. It does test the mediator’s resolve too – and may be intended to do just that in some instances. It may also put pressure on others in the rooms with foreseeable – and often unforeseen – consequences.

What happened next? In one, I had a frank and direct discussion about what I saw as the risks and benefits of such a strategy. I didn’t need to beat about bushes as the negotiator and I had already formed a mutual respect in the short period since our first meeting. I knew he meant business and he knew I was not a pushover. I said I would be content that we had explored together the risks involved in the strategy proposed and reminded him that, as client, it was his prerogative to make informed choices. We also agreed that I would advise the other party about the process issues which I perceived arose.  That at least was a partial insurance policy. I said I would enjoy seeing if what I predicted would actually happen. I observed that it was all good learning. We explored it all with a lightness of touch.

In fact, the move rather backfired in an unanticipated way but, because the negotiator had prepared himself for a knockback by the other party, we were able to deal with it. And it did indeed require us to go back and explore underlying issues before we finally got to the numbers. When we did, it was a remarkably short process because the necessary prior due diligence had now been done. Indeed, the principals got together privately and completed the deal in a friendly spirit in the late afternoon, earlier than either had predicted first thing in the morning.

In the other mediation, I decided to hold the line. It took some explaining and regular short meetings with one player to reassure that, despite the passage of time on complex technical and quantification issues involving experts, the expenditure of a few extra hours would make the end game much easier, despite the apparently large gap between the parties around financial settlement. And so it turned out. By the time one client’s senior legal adviser was able to sit down privately with the lead client negotiator on the other side and look that person in the eye and say “I can go no further”, all the pieces were in place for the jigsaw to be completed. Intricate and time-consuming it may have seemed (if one day can be described as “time-consuming”, compared to the years of positional negotiation and litigation prior to mediation), but the parties had achieved the result they sought, not only financially but in a host of other ways.

Keep the money to the end,” I often say in negotiation and mediation training. It tends to work in most cases.

More Reflections on Mediation

 

  • It really is helpful to bring the key players together; in one recent matter, the two senior decision-makers were among the best negotiators I have ever observed. We met regularly throughout the two mediation days to discuss strategy, the involvement of others, the squeeze points and how best to deploy time and resources. This whole collaborative approach paid dividends when the crunch came and they needed to bridge a very significant gap. And then, make use of silence….let them talk it through, touch the void, work out the realities, even if the answer seems obvious to the mediator.
  • Recently, rather than starting with a joint meeting or with one party setting out how they saw their claims, I invited both groups at the outset to prepare the bullet points for the press release they would issue when the mediation concluded. We then got together and brainstormed to reach a commonly agreed framework which I subsequently put into a couple of paragraphs for them to use. More importantly, the exercise identified what was important and showed that the monetary claims were only one aspect among three essential issues, of which a continuing collaborative relationship was also vital. As a result, we were able to prepare, jointly, an imaginative agenda.
  • In another example, as the parties signed the final resolution agreement at midnight, and prompted by a remark by an individual near me, I played a bit of The Winner Takes It All, by Abba, on my iPhone. Taken in isolation, that seems ridiculous. But it worked, when taken as part of a pattern in which we had kept spirits up through a difficult evening of drafting, during which parties’ had engaged in a musical quiz built around identifying a song, its origins and chart placing in 1975. This had helped people to relax at a very tense moment, and it fitted the occasion. I followed up Abba with Wings’ Goodnight Tonight… I then offered a sombre reflection on the contrast between the apparent triviality of the music and the excellent job each person present had done, naming them each individually, and commending them on the outstanding outcome they had achieved. This mixing of lightness of touch, releasing the hormone oxytocin, with the dignity and seriousness of the process (and the adrenalin and cortisol that stress inevitably produces) seems to be important. And finishing on a high note is really worthwhile.
  • Coaching individuals in a mediation about their and others’ behaviour will pay dividends if it helps them see themselves as others see them. Sometimes, that needs to be frank and can only be done if the mediator has built trust and rapport. Being humble and accepting that you may have made a mistake or given a wrong impression helps to aid authenticity, which is essential for us all, mediator and others  Encouraging and supporting the apparently difficult people is vital too. They are only trying their best as they see things. Asking bold, daft laddie questions can be empowering of others if they are struggling. And avoid telling war stories about yourself; that rarely works. But encourage others to share experiences that may be useful to the process.

Some valuable learning points from recent mediations

“What’s been going on in recent mediations”, asked a colleague. “Any highlights?”  (The trouble with doing anything on a regular basis is that you can omit to reflect on the learning from each occasion.)

So, for me, here are some takeaways from the past few weeks:

The value of bringing the principals/decision-makers together for an early conversation. There is usually great benefit in this. If they have met before, this renews that acquaintance in a difficult yet private forum. If they haven’t met, they have an opportunity to get to know each other as individuals, not names on emails or contracts. They set the scene for what is, after all, their day. And, crucially, it provides a set of reference points for later stage negotiations when only they can do what needs to be done. In contrast, on one occasion recently a lawyer was present on his own, without any client representative or other support physically present. What could have been really awkward became an example of effective and courageous lawyering in which the lawyer achieved a balance between presenting his clients’ position and frank exchanges with the other party – and private advice to his client on the telephone.

Involving experts. I’ve had some fascinating examples. On one occasion, we had two experts explain to each other why they differed, in front of one lawyer and one decision-maker for each party who could ask occasional questions, along with the mediator, who could ask some of those “daft laddie” questions that only a mediator can. Much was achieved with this exercise though the loss of control can discomfit the lawyers involved. On another occasion an expert who was an inventor of a high tech application explained to the full assembled crowd what his invention entailed. Some of those present understood. In yet another matter, one expert effectively assumed the role of an independent third party, offering guidance to both parties, by consent, on what they needed to do to help resolve difficult matters of valuation in a final account in a large construction contract.

Bridging the gap. In one matter, after several hours of mediation, only a few thousand pounds separated the parties. But the principals refused to make that final move. Extra value had to be found. That was achieved by a skilful lawyer who recognised that another stakeholder had an interest in the dispute ending. A telephone call secured the final contribution which enabled faces to be saved all round. On another occasion, I sat silent for what seemed like minutes while two key decision-makers looked at each other and tried to work out if the other really meant what they said when they intimated that they could go no further. The gap there was many hundreds of thousands. Gradually, each prompted and probed until they were satisfied that their counterpart was authentic. That gave them scope to reconsider lines of authority with stakeholders outside the room. Here, the money as such was not the defining point. Trust and realism were what mattered.

Preparation in advance. I always try to make sure that the lawyers are working collaboratively beforehand. That may take a number of meetings, emails or telephone calls, to help them jettison some baggage from past dealings or overcome positional starting points. Most however are courteous and professional. Given specific tasks and the goal of helping each other to help their respective clients, and recognising the value of collaborating to gather information, summarise differences, collate essential documents and relay encouraging messages to clients, they move the process forward significantly before the mediation day itself. Just airing differences and potential impediments on the telephone with the mediator present can reduce tension and recalibrate the relationship.