A sleeping giant has awakened in the domain of negotiation and mediation ethics.
That giant is … sleep.
It’s an issue because many mediators use fatigue to induce settlements. “Wear them down! Wear them out! Then they’ll settle.” That’s conventional wisdom.
But is it right? In the fight against terrorism, sleep deprivation is an “enhanced interrogation technique.” Another name for it is torture.
Granted, mediators and lawyers don’t keep clients awake for 100-plus hours. Far less fatigue, though, can affect cognitive abilities. At some point, the impact can be so severe as to rob a client of the mental capacity needed to enter a settlement agreement. Any contract made by someone without mental capacity is generally voidable.
This was precisely this issue in Olam v. Congress Mortgage, 68 F.Supp.2d 1110 (N.D.Cal. 1999).
In Olam, the mediation began at 10 a.m. and concluded at 1 a.m. the next day with a signed memorandum of understanding. Congress Mortgage sought to enforce the memorandum. Ms. Olam objected on the grounds that her physical and emotional distress from fatigue and isolation rendered her incapable of consent. She claimed she was “about to pass out” when given settlement documents to sign.
The court concluded that Ms. Olam’s version of events at the mediation bore little resemblance to the real historical facts and enforced the settlement. On different facts, though, the settlement could well have been voided.
Then there’s the potential for legal malpractice claims. Consider Cassel v. Superior Court, 51 Cal.4th 113 (2011), where the plaintiff alleged, “(f)inally, at midnight, after 14 hours of mediation, when he was exhausted and unable to think clearly, the attorneys presented a written draft settlement agreement and evaded his questions about its complicated terms. Seeing no way to find new counsel before trial, and believing he had no other choice, he signed the agreement.”
Because of California’s oddball “absolute confidentiality” rules, Mr. Cassel’s claim against his lawyers was dismissed before he got a hearing on the merits. In other jurisdictions, his claims would have gone further and might have prevailed.
Though neither Ms. Olam nor Mr. Cassel prevailed, here’s the point: Remorseful settlers can use fatigue—opportunistically or not—to launch additional litigation. Win, lose, or draw, that additional litigation is expensive, time-consuming, and stressful.
To avoid situations like these, how can we make sure we are using fatigue as a tool for good, not for trouble?
First, remember the old saw many of us learned from our mothers: “Nothing good ever happens after midnight.” When mediations run past conventional bedtimes, be careful.
We all know the danger signs: “Microsleeps” (when a person falls asleep for several seconds then wakes back up); drooping eyelids; slowed reaction times; increased crabbiness; trouble speaking clearly, thinking, or remembering.
If you’re concerned mediation participants may be too fatigued to proceed, ask them. Ask their lawyers or other members of their teams who know them well. If you yourself are dozing off, surface the issue and ask others whether they want to continue.
While a cup of coffee may help, it’s no substitute for sleep.
Nobody wants to stop a mediation when the possibility of settlement is in the air. On the other hand, nobody wants to enter a settlement which can be voided because someone lacked mental capacity. As with so much else in mediation, it is a case-by-case determination.
Raise the issue. Discuss it. Make the best decision you can.
Then proceed—or adjourn—with confidence.
And don’t lose any sleep over it.
When we talk about fatigue and mediation most people are thinking of marathon mediation sessions that go late or even overnight. People often say to me, “Cases settle when people are tired and worn down.” They are referring specifically to same-day agreements to settle with fatigue as a tool to achieving settlement.
In same-day agreements, fatigue is a tool that capitalizes on perceived investment of time and energy, particularly when people “came to settle today.” Later, on the same day, trouble with fatigue manifests when people are memorializing the deal in either a long- or short-form memorandum of understanding, they are too tired to think, and thus mistakes are made. Tip: Avoid drafting trouble by supplying a draft long form to opposing counsel either in advance of the mediation session or at the outset of the day, so that terms can be worked on throughout the day.
Fatigue as a tool also exists in follow up. People grow weary of the fight. It drags on. Some parties who say, “then we will just go to trial” don’t realize what that really means. After they geared up for the mediation session they are still on the litigation highway with all of its uncertainty and costs. Litigation fatigue becomes mediation/negotiation fatigue when coupled with contemplating what it would mean to settle the case only to not achieve settlement. The time and energy invested on “the day” of the mediation session moves into litigation fatigue (or fatigue with the prospect of litigation in the cases that are not yet in suit). Fatigue with litigation/negotiation can be trouble as people look at their sunk costs, time, and energy and think that the only way to recoup those is to try a case, their weariness causes them to lose sight of the possibility of loss. They are blinded by their fatigue and are convinced that they will win at trial and thereby justify not settling. Tip: Avoid having clients decide they must try the case by refocusing them on the benefits of having the conflict resolve by means over which they have some control—the mediator can do this with you, but counsel resisting the message can make it less effective.
At the end of the day (or days or years) most cases settle and fatigue plays a part in nearly every settlement decision.
