Mediators Don’t Settle Cases, Parties Do.

By Giulio Zanolla

Last week I mediated a case that was ready for trial. The lawyers on both sides were convinced that the case could not have settled given the extremely wide gap between the respective settlement positions, but attempted mediation pursuant to an order of the Court. There was less than a week to prepare for and schedule the session. I worked relentlessly to familiarize myself with the issues of the case, as much as possible in the short time available. After a substantive joint session, the parties unpacked their respective stories in private caucus and provided additional confidential information for the mediator only. We delved into their assessments of the case, discussed interests, risks, liability and damages issues. Offers and demands were formulated as constructively and persuasively as possible and exchanged through the mediator for a few rounds. The gap was—at that point—still much too significant to indicate any likelihood of settlement. However, through the conversations developed in each caucus room, I came to believe—as it is often the case—that the “real” gap was not as wide as the parties were telling me, and each other.

Positional bargaining suffers from an inherent inefficiency. Often, the positions stated in the negotiations are more indicative of what the parties do NOT want to happen, rather than what they would be willing to accept. In other words, the parties tend to use negotiation moves to “protect” bargaining territory and to push the other side towards their own settlement goal. Such a strategy is rarely very effective and it can frustrate the process and cause an impasse.

Instead of trying to persuade each side to make bigger concessions than they were comfortable with, I encouraged the parties to keep their “official” negotiating positions and started focusing on hypothetical settlement numbers and possible alternative settlement structures to test the feasibility of different options. No commitments were made, but everybody was led to focus towards a possible satisfactory outcome, as opposed to the other side’s distant position. The following couple of hours continued with separate dialogues involving assessment, reality testing, decision analysis and hypothetical scenarios until it became apparent that the parties were looking at realities not too dissimilar from each other. There was no settlement and no good reason (for my judgment on the process, at least) to try to force the parties to “split the baby”. (It may lead to a breaking point, or–even worse—to settlement remorse.) My assessment was rather that it would be productive, at that point, to suggest a lawyers-and-mediator meeting, so that we could openly look at the hypothetical settlement options we have all been working on. I wanted the lawyers to perceive directly from each other the shift from a positional, reactive bargaining towards the collaborative, constructive negotiation approach I had witnessed in the later part of the mediation. The parties would then be perfectly positioned to reassess the available options with their counsel and make an informed decision on how to resolve their dispute. I believed it was important that the parties had a full opportunity to do so and suggested a follow up in 48 hours. The pause helped both parties use their best judgment. At the time of the follow-up, it took only a few rounds of calls with each side to get to a settlement in which everybody felt they had achieved something valuable.

I know that there can be legitimate criticism of this choice. “A mediator should be focused on closure and help the parties bridge the gap right then and there whenever possible”, “why take the risk that a settlement that could have been reached would fall apart because the parties had too much time to think and change their minds”, “a good mediator would have pushed the settlement through on the day of mediation.” I believe such perspectives may be tainted with mediator’s ego. Sure, it feels good to walk out of the room with another settlement tack to add to the track record. The case settled - mediation successful! Not necessarily, in my book. My mediation process is for the parties. It is not my job to “produce” a settlement. If a settlement option exists, it does not exist because of the mediator, but rather due to the elements of the case and the interests of the parties. My job as a mediator is to make sure that all parties have a concrete opportunity to fully evaluate all available options and feel free to make their own decision on what represents the best choice. Much like a sculptor, who does not create the marble of which a statue is made but rather allows for the perfect shape to surface by meticulously and skillfully chipping away the redundant material that enveloped the piece of art, a mediator does not create the substance of which a settlement is made. Rather, he or she helps the parties see the shapes of possible agreement options otherwise obscured by the dynamic of conflict, and allows the parties to choose safely if the possible mediated outcome is better for them than the alternatives available outside of mediation. In the end, it is the parties who settle disputes with the help of lawyers and mediators, not mediators with the help of parties and lawyers.