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The Mediators Speak: Must a Good Settlement Make Everyone Equally Unhappy?

Jeff Kichaven and Rachel K Ehrlich

Summary

  • Those who pay often think they paid too much.
  • Those who receive often think they got too little.
  • That’s not the same as being unhappy.
  • A settlement is more than an exchange of money for a release.
  • When clients evaluate a deal, they consider far more than dollars.
The Mediators Speak: Must a Good Settlement Make Everyone Equally Unhappy?
Sergei Ramiltsev via Getty Images

Rachel Ehrlich

Unhappiness is not required for a settlement to be “good.”

Rarely is everyone happy with a settlement. The first time someone said to me (as the settlement stipulation was being executed) that it was a “good settlement” and how pleased they were with it, I thought that if the other side overhead that statement they would be unhappy. Then the other side told me how happy they were and that they thought it was a good settlement. Later, I confided to a mentor that I had failed the parties in my guardianship of the process because everyone was happy. The mentor said, “Oh Rachel, everyone happy is the brass ring!”

The second everyone-happy-settlement, one of the parties had a key issue on appeal in another matter (the adverse party also was different) and expected to win but nevertheless agreed to a significant settlement in the mediated matter that essentially anticipated a loss on appeal. Four months later, the appeal came down as a win. Four months after that, one person from each side came together at an event and said to each other simultaneously, “That was a really good settlement, wasn’t it?” The party most likely to be unhappy was still happy!

Given the rarity of everyone-happy-settlements, the next best thing is everyone a little bit grumpy about the settlement, but they see the wisdom of that deal at that time and even later, after having time to reflect.

Equality of the happiness quotient does seem to indicate a good settlement. I do not know that I’ve ever had one party tell me they are unhappy with the settlement and another say they are happy with it. So if anecdotes prove rules, then equally unhappy or happy may be a key measure of whether a settlement is “good.”

Jeff Kichaven

With every ounce of my heart and soul, I say: No.

I didn’t work this hard, attend fancy schools, and spend 30 years honing my skills as a mediator just to define success as making people equally miserable. I refuse to accept that.

In fact, I don’t believe mediation is about making people unhappy at all.

Yes, of course, those who pay often think they paid too much. Those who receive often think they got too little. But that’s not the same as being unhappy.

Why not?

Because a settlement is more than an exchange of money for a release. And when clients evaluate a deal, they consider far more than dollars.

Some of the most valuable—and overlooked—benefits of settlement include:

  • Finality. Clients get their mental real estate back. The case stops looming in their thoughts.
  • Elimination of risk. Trials are unpredictable. Disasters happen. If you settle, it won’t happen to you.
  • Cessation of legal fees. Yes, my lawyer friends—it’s true. Clients see this as a win. Don’t worry, though: there will always be other cases.

A good mediator doesn’t just shuttle numbers. A good mediator surfaces these dimensions—puts them on the table—so clients can see them, discuss them, and appreciate the full value of resolution.

Each client weighs them differently. Each reaches clarity in their own way.

When those non-monetary benefits outweigh disappointment over the numbers, the settlement becomes a smart, strategic, even satisfying decision. In my book, that's a good definition of "happy."

That’s what a good settlement delivers. That’s what good mediation makes possible. And that’s the standard to which I hold myself—every day, in every case, for every client with whom I have the good fortune to work.

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