Friday, November 23

Money Mediation #1

In this piece I try to cover a topic in two consecutive blog posts which I would not normally attempt but for an important discussion at the recent LEADR conference in Wellington and continued across the Pacific a couple of weeks later at the IAM Portland gathering of commercial mediators.

There was much talk at our gatherings of the grim reality of what we commercial mediators do - as opposed to what we teach in mediation school and what we read as part of our continuing skill development (rehearsing in poetry, but practising in prose ).

That discussion in part was prompted by a presentation by David Hoffman in Wellington where he explored the boundaries and terrain of ADR practice. His think piece on this topic will be in the fall edition of ABA's Dispute Resolution Magazine.

David talked of adversarial mediation where parties have no prior relationship and few joint interests other than the reducing transaction costs of getting to trial -- insurance cases being the obvious example.

In such cases, he observed, if the parties find themselves at impasse they often look to the mediator to be more like a judge or arbitrator and expect him or her to evaluate the likely outcome at trial. And in my experience the uninformed sometimes going as far as requesting a med/arb process, upon which I have posted before.

And for many of us the reality is that much of our work is transactional -- transactional in the sense that the currency of the mediation is money and there are no real shared interests between the parties to be found, beyond identifying the savings of costs and an artificial calculation of the risks should they proceed to trial.

And I suspect many of us struggle with us -- we struggle with the parties’ positional negotiation style in such cases and with the notion that we are unable to identify shared interests beyond the above.

This reality flies in the face of all that we have learned and most of what we read.

And we resist it.

It's like Mediators are from Mars, Parties are from Pluto. We mediators try to promote interest based bargaining in the positional real world of money negotiation.

And because we resist it, our consumers - especially lawyers - block attempts to reframe money disputes into something they are not and will never ever be - an elegant interest based/problem-solving exercise.

They are, and will remain, traditional negotiation dances where proposal begets counter proposal begets proposal - often endlessly.

Until a few years ago I wrestled with this conflict. I felt that somehow great mediators would have found those interests within my mediations and would have found the mutual gain that was on offer, no matter what kind of mediation it was.

I was wrong. Real wrong.

Oftentimes, those interests are not there in the knockabout world of commercial dispute resolution and it is only about savings and risk.

As Andy Little says in his wonderful book Making Money Talk our role in money mediations is more about
facilitating getting to best numbers - quickly.

And we should do that by;

, facilitating the flow of information

Second, facilitating case or risk analysis
Third, facilitating movement (and closing the gap)

That’s it – that’s Andy's take on our role in traditional money disputes.

Doesn't mean we are not intelligently facilitative - in my view the parties will punish you if you stray from that (purchasing habits of sophisticated mediation services consumers).

But it does mean we need to be comfortable with a positional dance involving bluff, deception, brinking and posturing. All these usually accompany your average negotiation phase of a money mediation.

Where it gets really interesting is in the third of these three phases - facilitating movement. This is where the mediator dazzles the parties with their own special brand of silver bullet.

Whatever you call it, this third phase sees mediators out there riding the boundary fence where mediation meets arbitration meets law.

[to be continued in Money Mediation #2 - in particular an examination of the third phase play of closing the gap]


Vickie Pynchon said...

hmmmmmmm, yes but it's all about rationalizing money, isn't it? and the MEANING of the money to the parties IS the interest being negotiated -- in a case with an insurance claims rep -- how this amount of money relates to the "metric" his/her employer uses in justifying the value range within which the adjuster believes he/she must work (and achieve or "win") on the one side and the amount that seems "fair" or "just" or simply acceptable to the injured party. This is the equivalent of an advertising executive selling aspirin or soap where there is truly no difference between the available pain remedies or cleaning solutions. In a way, it calls for the highest levels of creativity, not the lowest. No?

Resolve It Now said...

Frustration is the natural outcome of trying to guide people in a positional negotiation into an interest based negotiation. We know their interests may be important but those interests will only come out if we as mediators focus on the process. We create the environment where they can explore mutual interests. I believe positional and interest based negotiation are more an element of the negotiation content rather than the process. We as mediators control the process and give them the opportunity to move from a simple compromise but we cannot control them to do it. It is kind of like leading a horse to water. We can't make them drink.

Lee Burns