GPSOLO September 2009
Dealing with Impasse in Commercial Mediation
You are likely to experience a range of emotions in your work as a commercial mediator. At the outset you will feel a real sense of pride: People with a difficult problem, advised by experienced lawyers, have selected you to help them resolve it.
At some point, however—often during the late afternoon—you may find yourself silently wondering: How did I ever agree to become involved in this mess? This feeling arrives for me most often when the parties have stopped moving, not simply as a tactic or to consider a difficult decision, but at an apparent dead end. At that point I am of-ten out of ideas and low on energy.
This article describes techniques I have used to move deadlocked lawyers and clients toward agreement. If you are a mediator, they may be helpful; if you are an advocate in the process, keep these ideas in reserve and don’t hesi-tate to suggest them to a mediator who seems to have lost the way.
There are a range of tactics available when you reach an impasse: (1) restart the bargaining; (2) ask for help and wait; (3) change the process; (4) and manage the endgame. This excerpt focuses on just the first of these options: restarting the bargaining.
Push for linked moves. The most likely option is to continue pure-money bargaining. Parties are often more willing to make monetary concessions if they know what they will get in return, and mediators can provide this in-formation by proposing linked moves.
The simplest way to feel out parties about reciprocal concessions is to ask what if?: "What if I could get them to come down $200,000? If I could get that much movement, could you make a deal at that point?" or "Let’s say I could get them to drop that far—what do you think you could do in response?" The "what if" phrasing suggests that the other side is resisting the idea of conceding, reducing the listener’s tendency to devalue the potential concession. It also suggests that the adversary will have to make a concession first, satisfying a positional bargainer’s wish to have its adversary "sweat for a deal."
Another approach is to ask both sides to make concessions in simultaneous steps: "I’m going to ask you to drop 200, and at the same time I’ll ask the defendant to go up 150." This plays on the human wish for reciprocity: Each party knows that it will not have to move without getting something in return, and also what the reply will be. If parties agree to make a large mutual jump, it can reinvigorate the bargaining process.
A variant on simultaneous steps is range bargaining: The mediator proposes that future bargaining will occur within a stated range of numbers. For example, if parties are at $80,000 and $200,000, a mediator might say, "Can we agree that we will bargain from this point on between 120 and 150?" This is the practical equivalent of parties making simultaneous jumps, but it is sometimes psychologically easier for litigants to accept because they assume the other side will do most of the moving from that point on.
Ask about interests, but only for a limited time. One suggestion is to try something that mediators are taught to do as a matter of course—probe for the parties’ underlying needs or interests. Stimulating interest-based bargaining is difficult in commercial mediation, however. Unlike warring neighbors, businesses can usually find a new partner and, by the time mediation occurs, have often done so.
Mediators who pursue interest-based options are often re-buffed. ("If you knew them like we do, you’d understand that the idea of letting them back into our operation is out of the question!") Later, however, the same parties are sometimes more open to creative ideas, if only because their preferred option, a simple money deal, is not available.
If discussing interests leads to a settlement, you are in luck. Keep in mind, however, that changing the subject can be helpful even when it yields no tangible result. Simply thinking for a few minutes about something other than the other side’s obstinacy gives disputants a psychological breather, making them more flexible when they return to money bargaining. Someone who had earlier vowed to go no further may now be willing to do just that because a break allows him to change course with less feeling of contradicting himself.
Commercial mediation is typically scheduled for only a single day, which creates time constraints on inventive bargaining. If parties spend hours looking at other options but hit a dead end, they often have little time or energy left to work out an agreement over money. To avoid this I may set a time limit (which can always be extended) on consideration of creative options.
For example, a condominium association sued several contractors over a leaking roof, demanding that the roof be entirely replaced at a cost of $1.3 million. The case went to mediation. Six defendants argued vehemently that the roof could be repaired for no more than $300,000. Hearing this, I said to the defendants: "I suggest we think about whether you as a group can agree to repair and guarantee the roof. From what you tell me, that might be a much lower-cost option. I’m aware, though, that Nancy has to leave for the airport at 4:00 PM, and she holds the largest checkbook. So I suggest we explore the repair option for the next hour and a half. If it doesn’t work, we can go back to putting together a money offer." The defendants talked cooperatively for 90 minutes, but the initiative foundered over their unwillingness to guarantee the repair for ten years. We returned to talking about money, but the atmos-phere had changed—within an hour the group raised their offer from $200,000 to $700,000. A month later the case settled at $1.1 million.
Make a special plea. If linked moves or focusing on interests are not successful, you can sometimes obtain a concession by asking for it explicitly as a personal request. ("If you could make one more move, I’d appreciate it. I’d tell the defense that you were adamant and only agreed to this because I asked you.")
It is easier for a disputant to make a concession if it is portrayed as a special gesture to the mediator. Keep in mind, however, that this tactic will only work once or twice; repeated requests are likely to be met with "Why don’t you ask them to be reasonable for a change?"
Parties will often agree to make an extra effort if they know that it is the final move—the last you will ask them to make. ("I’m going to ask you to go to $1.1 million. That’s my last request. If this doesn’t work, it’s over, and I’ll tell the plaintiff that. I won’t come back to you again.") This is a risky strategy, because you cannot go back on your word—if you say that you will not come back for more, you can’t unless something truly unexpected happens. But a last-and-final plea will often produce an additional concession.
Conclusion. Apparent impasses in commercial mediation are nearly inevitable, but they need not be final. With these and other techniques—and persistence—you can bring even the most stubborn cases to closure.
- This article is an abridged and edited version of one that originally appeared on page 4 of Dispute Resolution magazine, Winter 2009 (15:2). The original article is an excerpt from Dwight Golann’s Mediating Legal Disputes: Effective Strategies for Neutrals and Advocates (ABA Section of Dispute Resolution, 2008).
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Dwight Golann is a professor of law at Suffolk University Law School in Boston, Massachusetts. He may be reached at firstname.lastname@example.org.