By John Trimble, Lewis Wagner LLP
All of us who attend or conduct mediation on a regular basis soon come to realize that pessimism is one aspect of mediation that occurs in every mediation session. We learn that if we let pessimism cause us to quit, we would never settle anything. However, pessimism on the part of the parties and their counsel (coupled with impatience) can prevent a very settleable case from being settled. Conversely, strategic use of pessimism by a mediator or a party can be effective in achieving settlement.
Parties on both sides frequently come to mediation with a pessimistic view of the potential for success. Even optimistic or neutral parties can become pessimistic after the first demand and offer or as the negotiation proceeds toward apparent impasse. Thus, an understanding of the causes of and solutions for pessimism can give a mediator or advocate an advantage.
The purpose of this brief article is to offer a few suggested techniques for addressing pessimism and getting past it. It will also address the strategic use of pessimism
Expectations: The First Hurdle
My experience as a mediator has enabled me over time to observe that parties on both sides and their attorneys come to mediation with an array of expectations. Plaintiffs, in particular, tend to come with high expectations unless they have been well counseled by their attorney. Often, the parties’ expectations are uninformed and unrealistic. Unfortunately, only high and unusual verdicts are reported in the media, and the average party has no frame of reference for the value of their case. Furthermore, unless they are schooled in law or claim handling, there is nothing in their experience that would enable them to know the factors that bear upon the value of their case. Expectations are even more challenging when a large component of damages are for loss of love and affection such as a wrongful death case.
The earliest signs of pessimism begin to develop when parties realize that their expectations are not going to be met. I have learned that most parties have fallback expectations and further fallback expectations, and so on. It is when the negotiation appears to be headed below the lowest expectation that true pessimism occurs. (This is true for the plaintiff or defense and it is true for the lawyers.)
Identifying and Exploiting the Parties’ Hidden Agendas
While parties come to mediation with expectations, their expectations are usually a matter of what they want from a settlement. Their “hidden agenda”, on the other hand, is what they need from a settlement or what they fear from not settling.
I have personally been able to ignore pessimism because I have learned that parties and their lawyers almost always have hidden agendas that will prompt them to settle even when their expectations may not be satisfied. Once I learned this and embraced this concept, I became a better negotiator for my clients and a much better mediator.
To identify a party’s hidden agenda, one must step back and study the age, education, experience, occupation, sex, race, ethnicity, nationality, socio-economic, or other characteristic that may motivate them to settle or not settle a case. The same analysis is also necessary for corporations, governmental entities, and other institutional parties. With a little bit of study (and a modest amount of reasonable stereotyping) one can predict the wants, needs, fears, and risk factors for most litigants. Once you understand the parties’ hidden agendas, most cases can be settled.
There are many examples of hidden agendas that mediators learn after a case has settled:
- The Plaintiff who needed enough money net of attorney fees and liens to buy a new bass boat;
- The married couple who longed to have enough money to pay off the credit card balance they had been carrying for 10 years;
- The newlyweds who had a house they wanted and needed a down payment;
- The middle aged couple with a child starting college in a year;
- The aging couple needing income for retirement;
- The business that needed to settle litigation so that it could obtain financing to break ground on a new headquarters;
- The business that needed to settle in order to avoid publicity;
- The woman who wanted to settle so her husband would relax and not have a heart attack caused by the stress of the lawsuit;
- The employee who wanted an apology;
- A lawyer who needed to make payroll;
- A defendant who couldn’t afford the litigation;
- The family patriarch who wanted to be respected.
Many times, settlement that appears hopeless can still occur if the mediator can get the parties talking about their own hidden agendas or can get the parties working on their opponent’s hidden agenda. I have found that there is no harm in me, as the mediator, asking a party what they fear about not settling or what they need out of a settlement. I will often ask the mediator to ask the same question when I am representing a party.
Studying and Dissecting the Causes of Pessimism
There are two stages of pessimism that I look for in mediation. I will always look for signs of pessimism on the part of the parties and their counsel. However, I also have to be mindful of when I begin feeling pessimistic. It is at the point of my own pessimism that I have to step away from the mediation, figuratively climb to the balcony of the building, and “look down” upon the mediation process as if I was an observer rather than a participant. I find that separating myself mentally from the process allows me to “visualize” the causes of pessimism so that I am better focused in addressing it with the parties or with my client.
At the most pessimistic stage of the mediation, I frequently ask the parties to put their emotion aside and to engage in a critical analysis of where we are. Usually, we can isolate factors that are causing the parties to see the case so differently. Once I do that, I then try to shift the discussion to the risk that each party may be right or wrong in their respective views and the risk that they may do worse at trial. We then chip away at each conflicting issue, pessimism melts and people begin to more objectively assess their positions.
This is also the stage where I frequently will ask one party or the other to make a break through move that will put the other party at risk. If I cannot obtain a break through move, then I will suggest that the parties make conditional “bracketed” moves to narrow the gap enough so that a range of settlement can be visualized.
One of the reasons for pessimism is that neither party can “visualize” where the negotiation may end. The lack of a vision of the end point prevents both parties from making the kind of move that may be needed to inject optimism.
Bracketed conditional moves, whether they are suggested by a party or the mediator, are probably the most effective tool for dissolving pessimism. The second most effective technique is to engage in “what if” conversations. The mediator can go to one party and ask, “What if I can persuade the defendant to come to X. Could I get you to move to Y?” If the pessimism is so deep that the parties will not engage in a bracketed move or a “what if” conversation, then I will sometimes ask each party to give me their “take it or leave it” number with the understanding that I will not reveal it to the other party. Before taking this approach, I will ask each party to agree that if their “take it or leave it numbers” are within a certain dollar or percentage range, they will agree to reveal their numbers and consider negotiating from there.
Strategic Use of Pessimism (Anchoring)
When we are faced with a pessimistic situation, we cannot ignore the possibility that one or both parties may be using pessimism as a strategic tool. Good negotiators will sometimes use a technique called “anchoring” to hold their ground in a particular range in the hope of bringing the other party closer to that range. They will patiently test the waters until some pessimism arises, and once they are convinced that the range is not going to work, they may move forward. Really good negotiators are aware of the need to dissolve their opponent’s expectations, and exceptional negotiators craft their negotiating strategies to play to their opponent’s hidden agendas. They understand that injecting pessimism may ignite their opponent’s fears, and at a minimum they may lower their opponent’s expectations.
As a mediator, I will sometimes use pessimism strategically to test a party’s resolve. I may indicate I am growing pessimistic and that I am about to end the mediation. Many times, the appearance of quitting the process will spur parties into concessions to keep the process alive. The same can be true for a party. If a party appears to be quitting, it can often spur the other party to make moves in the hope of keeping a negotiation alive.
In summary, although we tend to view pessimism as a challenge in mediation, it can also be a potent strategic tool for a good negotiator or a good mediator.
Because pessimism is such a likely occurrence in mediation, getting the subject on the table, exploring the basis for the pessimism, and dissecting it can make it melt away and cease to be a barrier to settlement. When parties are cautioned at the beginning to expect pessimism, they become significantly more patient and creative later.
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