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today.
Welcome to the audio edition of BHBA's Mediation Training. In this episode, your hosts, Lisa
Morgan and Robert M. Cohen, will guide you through mediation theories and styles. Let's
dive in.
I'm Robert Cohen, and I'm here to introduce my co-presenter, Lisa Baker Morgan. Lisa is
an outstanding mediator, attorney, and teacher. She has extensive big law experience. She
has worked with mass tort cases, commercial litigation, and has tried many important
cases. She has outstanding mediation training and teaching skills. And when she was in college
and at law school, she always obtained the very highest academic honors. She's lectured
about mediation and ADR all over Europe and is pleased to now present to you about the
theories of mediation. I now introduce to you Lisa Baker Morgan, a true Renaissance woman
who has dual residences in Paris, France, and West Los Angeles. Lisa.
Robert, that is so nice of you. Thank you for the lovely, lovely introduction. Good
morning or good afternoon, as the case may be. Welcome to our presentation. And thank
you to the Beverly Hills Bar Association for having us here today. So as Robert mentioned,
we're going to be discussing mediation theory and practice today. I'm going to start us
off with mediation theory and discuss negotiation strategies used in mediation, as well as mediator
styles. And Robert's going to continue on with styles and the process and practical
tips and how it's done to flesh all of this out for you today. So let's start with out
with the general mediation theory. Conflict is natural and inevitable. And how do we navigate
conflict? Well, we typically do it in three ways. We do it through an assertion of power.
We do it through an assertion of rights or discovery of interest. Now a power based approach
is for example, war. Revenge acts of aggression. Think of the Russia-Ukraine conflict. The
detriments and costs to using this approach are obvious. A rights based approach is used
in adversarial proceedings such as litigation or arbitration. Now besides the cost, time
and money of an adversarial proceeding, such a proceeding is damaging to relationships
and the results will result in at least one unhappy party, which also leads to a lack of
resolution of the dispute. Now the third approach is the interest based approach. This was popularized
by Fisher and Urie and Harvard's program on negotiation. It encompasses any process which
focuses on the underlying needs and interests of the parties, including intangibles such
as respect, feelings, emotions and relationship factors. There were several theoretical and
jurisprudential basis of mediated forms of dispute resolution, from legal, anthropological,
sociological, psychological and political sources. There are also many paths to mediation,
including community based mediation, family mediation, victim offender, school based peer
mediation, organizational mediation and government and court excuse me, annexed mediation. Today
we're going to discuss mediation predominantly in litigated matters and we're going to talk about
the different strategies and styles used in mediation to navigate the mediation process,
the content and the parties. Mediation is when the parties negotiations and communication
are facilitated by a third party, neutral. The process and the resolution belongs to the parties,
it's not in the hands of the third party. Before we get to the negotiation strategies,
which there are two, I want to mention what is involved in every negotiation. It's important
to recognize that every negotiation is a mixed motive exchange between competition on one hand
and cooperation on the other. The tension between the desire to compete and the desire to cooperate
is illustrated in a simple hypothetical commonly called the prisoner's dilemma.
Now I've changed the facts a little bit, but this is how it generally goes. So you have a situation
that say two men are arrested for petty theft. The petty theft carries a two-year jail term.
However, the police suspect that they are both involved in a great crime of robbing a bank,
but they don't have enough information to bring the robbery charges. The accomplices are put in
two separate rooms. I know you're all thinking lawn order right now and that's how you should be
thinking. So they're separated in rooms, they're not permitted to talk, and the police present them
each with an option. They say, listen, right now prisoner A, you're facing a two-year jail sentence.
However, we both know that you're involved in robbing this bank and that carries a prison sentence
of 20 years. But if you confess and tell us what happened and tell us about accomplice B, we'll
talk to the prosecutor about dropping the charges against you and we'll go after your friend.
Now the police make the same proposal to prisoner B. So as you'll see on slide one,
the prisoner's dilemma is laid out as follows. If prisoner A stays silent,
he'll get two years unless his accomplice talks. The vice versa is also true. Prisoner A talks,
he'll walk free unless his accomplice talks. So does prisoner A compete with his accomplice by
talking and hope the accomplice does not talk? What does prisoner B do? If both stay silent,
as seen in the diagram, they can only be convicted of the petty theft and get two years. However,
if they try to compete and one tries to go free, the other will get possibly 20 years unless
they both talk. If they take a competitive stance talking, one prisoner may go free,
but if they both talk, they may get life. As you can see that's demonstrated here, what is in
both of their interests is to take a cooperative stance, meaning if they both sit tight and they
say nothing, then they only get two years. So how do we create cooperation without being exploited?
Cooperation without exploitation. It's commonly called a tip for tad or a tip for tap, blow for
blow. This is creating opportunities for cooperation even when the parties are in a competitive setting.
The idea is reciprocity. There are five principles to it. The first one, the initial move by a party
should signal cooperation is sought. To avoid being exploited, the instance of cooperation can be a
small one. You can send a cooperative message without jeopardizing major issues. The second
principle is to respond in kind. That means if one party provides a competitive move, then the other
one should respond competitively. If one responds with cooperation, then the responding move should
also be cooperative. Number three, forgiveness. What this means is that even if the parties have been
competitive thus far, if one moves and makes a cooperative stance, let's say they offer $20,000
instead of the $5,000 they were doing before, then the other side should be forgiving and also make a
cooperative move. Principle number four, transparency. Being clear and consistent, the moves in negotiator
becomes predictable. The opponent can risk then being cooperative. The last principle is be flexible
in your moves. Do not use only one approach if you want your opponent to become more cooperative.
Now, there's two strategies used in negotiations. The first is called distributive bargaining. It's
also referred to as competitive bargaining. The second is integrative bargaining, which is referred
to as cooperative or problem-solving bargaining. Some negotiations and negotiations can be completed
by using entirely one strategy. I find most often that it is a combination of two invariant
degrees, depending upon the mediation. Distributive bargaining. We'll see our blonde couple there.
Distributive bargaining is a zero-sum exchange. That means a game for one party is a loss for
the other. Our woman here, if she gains 80%, that means that the man loses 80%. His gain of 20%
is the loss of her to 20%. You are distributing a fixed sum value. You see this negotiation
often in salary negotiations, car and house purchases, insurance proceeds. Now, there's
a flow to distributive bargaining. For example, the negotiations will evolve through a series of
concessions or compromises. There will be a gravitational pull towards the middle when there's
two reasonable offers have been made. If the opening concessions, the initial demand and
the initial offer counteroffer are too small, a midpoint may never be reached. A party's bargaining
range is between their opening offer and the reservation point. The reservation point is the
point of negotiation that is the difference between reaching a settlement and walking away from the
bargaining table. It's also important to note in distributive bargaining, timing is critical. I
cannot emphasize this enough. The right offer at the wrong time is the wrong offer. So,
here we have a very simplistic, easy, nothing fancy here, distributive negotiation. Somebody's
trying to buy a car that is listed as a sticker price of $50,000. The purchaser wants to only pay
$42,000 and that's what they offer. Now, you'll see at the bottom that they meet, they meet,
they meet, reach an agreement of $46,000, which let's say, let's say the party's earlier get just
impatient with the process, which I can tell you happens all the time in mediation. And what in
them says the media, you know what, I just, this is pointless, I'm tired of doing this. Let's just,
you know what, let's just get to like 46. I think that's where it's going to go.
That would be maybe the right number at the wrong time. As a mediator, you'd be advising the party,
don't do it, you may be leaving money on the table. And also there's a psychological benefit
to having the parties go through the process. If one party feels like the other party is jumping
to say the $46,000 number, they're going to be suspicious of that. And they're going to think
that maybe they didn't get a good deal. And let's talk about the opening move.
Okay, opening offers. Now, opening offers from the very extreme on the outsides,
you want to get to the middle, to the ZOPA, which is zone of possible agreement.
Now, say you're really out here, there's insult at the very extreme, and then there's insult,
and then there's extreme. And those are the far out reaches. And the insult zone is an offer so
unreasonable that it kills negotiation, or it fails to set a bargaining parameter. The extreme
zone is just a little bit less than that. It's slightly credible, but it's not great. The problem
with having parties start that far out is one, they may never reach a midpoint. Two, the other side
may be so insulted that they deem that to be completely bad faith. And they don't think that
the other side is serious about negotiation. I have found that in early dispute resolutions,
parties have a tendency because there's been no discovery done usually. And the valuation of the
case hasn't fully developed, the risk analysis, I would say hasn't fully developed. And so the parties
are very married to their cognitive bias. And they're out here, you have a plaintiff say,
who's convinced they have a million dollar case, and you have the defendant who thinks this is
just a $5,000 unruly since value. If you start there, that's going to be a problem.
So you try to start in the credible or reasonable zone. Now, credible zone, it could be an unreasonable
start, but it's not going to kill your negotiations. Okay, they're still working room. The reasonable
zone, reasonable zone, you usually start in if there's been prior settlement negotiations,
there's been a 998, or the parties have a relationship, and they know each other. You
usually don't start if it's just a commercial transaction, or the parties don't know each other,
usually typically do not start in the reasonable zone to avoid any perceived exploitation that may
happen. And in the middle is a zone of agreement, the ZOPA. And this is in between the parties
reservation figures. And this is an offer that's acceptable to both parties. Now, who makes,
what we're talking about offers, opening demand or offer, who makes it? Usually the plaintiff will
make the initial demand, it could be the defendant. One benefit in going first is the benefit of
anchoring. The first party to make an offer or demand will benefit from this psychological effect
that manages the other side's expectations regarding negotiations. Now, what happens if
you're mediating and you've got parties who are in the extreme or insult zone, and this happens
with frequency? Well, in private caucus, you can ask them hypothetical questions or do a little bit
of reality checking, such as how do you think that would be received? Will you allow me to think about
this with you? Do you want a little time to think about that number? I also find it's helpful to
explore the reasoning behind numbers. So if the plaintiff puts forth a huge demand, I'd say,
okay, let's flesh this out. How did you arrive at this? If the parties are very, very far apart,
you can mention to one party or both of them in private caucus, you can say, you and the other
side are far apart in the evaluation of this case. What are they missing or what do you think they're
not considering that you feel is fundamental or is a mis-evaluation of this case? Let's talk about
that. Also, the last point as far as offers and demands is, I find it very helpful and critical,
honestly, is when your conveying offers or demands to do so with an explanation, frame the offer,
provide a narrative. I usually ask the parties, is there anything you'd like me to convey with this?
Or may I share the rationale you just shared with me when conveying the demand? That is helpful.
And even if the other side does not agree with the demand of the offer that's put forward,
it gives them the rationale behind it so it's softened to blow and it progresses the negotiations.
Okay, let's go to side six. We're going to move on now to integrative bargaining.
Ah, viola. And now we have the pictures of the oranges. We've moved from cutting up a pie to
oranges, skilling out of a bowl. So what's going on here? Integrative bargaining goes beyond the
zero sum exchange. The value is not fixed. It goes below the surface. And I'm going to talk
about going below the surface in just a moment. We examined what's the party interest? What causes
a person to decide? Are there intangibles? What is the intangible? Why is it that's important to the
party? The benefits of integrative bargaining are numerous. It's particularly beneficial
when there's relationships that may be family relationship, friendships, or a commercial
relationship that the parties have or would like to continue to have. Integrative bargaining avoids
time and posturing and gamesmanship because it focuses on creative solutions. It creates better
agreements also because the interests are satisfied and reduces the danger that the agreement will
be repudiated or the party will, one of the parties will need to enforce it, say, and do the
Singapore Convention or through domestic roots of enforcing the contract. Now, integrated bargaining
goes past the position of I want. It examines the why without asking the why. It goes below the water
line. The parties learn about the reasons and the needs for the underlying positions and they can
identify, create, mutual satisfies of those needs. Using our oranges as an example, let's say we have
the same blonde couple that we saw in the prior slide and they're arguing over these.
They say, okay, I want three and a half. I want three and a half, but that's not
really what they want. One really wants more and the other one wants, the other one wants all of them.
So, integrated bargaining examines what interests you about the oranges. How do you intend to use
the oranges? Let's say the woman, the blonde woman we saw earlier, let's say that she wants to use the
zest of the orange, you know, where you shave off the peel of the orange because she likes to bake.
And the blonde man we saw earlier doesn't care about the zest because he just wants to use the juice
of the orange to make popsicles for his kids. So, in integrated bargaining, we can come up with a
resolution that satisfies both interests. You can come up with an agreement that says the woman is
going to zest all the oranges of the win a certain time frame. She's going to then give the oranges
to the man to juice them and thereby you've satisfied both interests. Okay, so if you've ever
heard the expression tip of the iceberg, look at this. What we're looking at here is an iceberg,
beautiful photo by Steve Girliand. And the tip of the iceberg, it's just notice a little part of the
top above the waterline. But if you look below the waterline, there's even more iceberg. Okay,
there's a lot more of it. And this is a terrific metaphor for integrated bargaining. So it go
above the waterline, the tip of the iceberg, you're looking at you see the demands, you see the
solutions, you see the right, you see the claims. This would be like, you breach the contract,
no I didn't, I have this defense. Okay, but going below the waterline, that's where you look at
the motivation for the claims. Why is this priority is certainness? What are they concerned with?
What pressures do they have? Do they have values that are that we need to address? What are the
needs? Okay, so I like to say that there's three icebergs in every case. These three should always
be explored. The first one is legal. And what's below the waterline? Well, it's a party interested
in a fair process. Do they want their day court? Are they looking to hold someone accountable?
Do they want a public forum? Now, no, I'll just use this an example. The top three can all be
resolved in mediation. The last one probably would require this to be resolved in litigation
because you're not going to have a public forum in mediation. It's a confidential private settlement
for the benefit of the parties. If somebody, for example, an NGO is trying to hold it to
Exxon and they want to hold Exxon as an example for other companies, oil companies,
then they are probably going to want their day in court and they're going to want to make an
example out of Exxon in court mediation would probably not be satisfactory. If the party just
really wants their day in court and sometimes that means just explaining and venting in private
caucus what's going on with them, that can be satisfied in mediation. Now, let's look at the
other two icebergs. We have personal. What are personal concerns? Well, you have a relationship.
Is there a relationship concern? Do we have a belief system that's been attacked or triggered?
A moral code? Does the party want an apology? Is there a reputation interest here? What about
financial security? Safety? Retirement? Now, let's look at the commercial. Do we have a commercial
relationship? Does the parties want future business? What is the reputational interest?
What about financial security? Are there issues of trade secrets or confidentiality? All of these
are addressed in integrated bargaining. Let's go to slide none. Mediation is flexible not only in
its procedure, but it's also flexible in its resolution. Integrative bargaining is really
a terrific example for that creativity and what the parties can do. For example, instead of just
cutting a check and arguing at the most of maybe a structured settlement, what are some creative
solutions that can become up with? Well, there's retraining, education, a press release, public
display of peace between the parties, re-employment of the party, maybe making introductions of the
party to somebody else. Time, more or less. Source of payment, a structured payment.
Services. Can services be rendered, for example, construction instead of a payment of money?
How about the renegotiation of a contract? Let's say the parties still want to work together,
but the present contract is not working. They can renegotiate this contract or put it on hold,
re-parlate it into a future contract. Like this next one is future supply agreement.
What if the parties just want to sorry? They're not likely to get that in litigation,
but in the confidentiality of mediation, they can. Confidentiality, a letter of reference.
How about a charitable contribution? All of these are creative things that can be used
and followed up in mediation. Now let's go on to the next slide. Slide 10, please.
Okay. I mentioned before Fisher and Yuri, and this is their book, Getting to Yes, Negotiating
Agreement Without Getting In. This is probably the most widely published and purchased book
on mediation. I think it was published over 40 years ago, and Yuri has actually published several
other things. I'm reading his most recent book called A Possibility, which is excellent.
But in this book, if you haven't read Get It, they discuss four factors as to how to be an
integrated problem solver. The first one is separating people from the problem,
to focusing on interests, not positions. Thirdly, develop and evaluate options with potential for
mutual gain. And fourth, using objective criteria. Okay, let's go to the next slide and let's talk
about separating people from the problem. In conflict, people are often reactionary.
They feel threatened and they operate from their own frames of reference. They miscommunicate
in stressful situations. And so we need to be cognizant of this in negotiations. And what this
means is be hard on the substance, attack the problem, but be easy on the people. Parties are
humans with emotions, egos, sensitivities, backgrounds, values. And this happens, this is
applicable in all mediation, regardless of whether it's a corporation or whether it's
two family members arguing. There may also be concerned about how to explain the result to others.
They themselves, or they may feel offended, hurt, disrespected. It is important when you're trying
to create a conflict resolution mindset to see things through the filter of the other party.
And if you want to influence a person, you need to understand their point of view and to feel the
emotional force in which they believe it. Negotiation by treating people as human beings and work on
the merits of the problem. Now what are three people problems? Well, their perception, emotion,
and communication. First one is understand the problem from the opponent's perspective. Now
realize that conflict does not lie in objective reality, but it lies in people's heads, regardless
of how you might characterize it. I had, interestingly, just the other day, I had a party say,
well, where are they coming from this? Is there thought, is it rational thought or is it emotional?
And so I asked the person, they said, you know, that's a curious question. Why are you asking
that? Does it matter? And they said, well, and I said, well, if it's rational, who was to judge
whether it's rational or not. And then we talked about how a concern, even if you think it's irrational
or ill founded, it needs to be addressed. Because if the other side, if that's where they're
operating from, that will not go away, just simply by labeling it as something inconvenient or
irrational to you. Another important thing is don't assign attention or motives to the other side.
Avoid inferring opponent's intentions from your fears. And a very common or very easy example
of this is if you've taken a taxi, right, and say the taxi driver is taking you a route that's
different than the one that you're seeing on Google, okay, and you automatically assume, oh, he's
taking me for a ride. He's going to charge me more money. Well, that doesn't, you're putting
your perception, your fear onto that taxi cab driver, right, just maybe his route, okay, you can't
imply negative intentions on other people based upon your prior experiences. Also, don't assign
blame. It entangles people with the problem. It does not advance negotiations. Even if justified,
it will not develop a solution oriented mindset, okay, recognize, identify, and discuss emotions
explicitly. Now, Robert's going to talk more about private carcassine and shuttle diplomacy and joint
things. But it is key when communicating and in negotiations to recognize emotions that are
involved and discuss them with the mediator. I would suggest in private carcassine yours and theirs.
If sometimes I find it helps to give one side the opportunity to maybe write down how they're
feeling so they can identify anything that slows down the process. That way they're
moving into more of a rational frame of mind than staying stuck in emotional phase. Let's move on to
the next slide, slide 12. Okay, focus on interest, not positions. Issues define the problem, what
needs to be addressed, for example, the performance of the contract. Persistions are the party's
perspectives on the issues. For example, plaintiff says that the defendant breached the contract.
But the interest are the abstract needs that need to be satisfied. What are the reasons
driving the party's position? And importantly, don't forget to look for basic human needs,
such as security, economic well-being, safety, recognition, respect, control over one's life,
over one's home. Robert and I recently wrote a piece on homogenous association disputes.
And one of the triggering things that makes those disputes so
so so makes mediation so beneficial for them and makes them so triggering for parties
is that the homeowner often perceives the regulations and rules to be infringing on
their ability to control their home, control their environment. So that's an example of that.
Next, ascertain what is going on below the waterline, the what and how questions.
Remember to look for understanding, not justification. Listen to what is being said
and not being said. I cannot emphasize this so much. Use your intuition.
Pay attention to body language, a party's tone. Are they speaking faster? Are they being a little
more aggressive? Do they sound defensive? That is all telling you something. Now, some medias will
ask why. You know, you can't ask a party why. I would do it in private caucus. So tell me why.
I guess if you use the right tone, I would I stay away from asking the why question because it tends
to make people defensive and it limits creativity. Okay. Remember that everybody has several
interests. Okay. Next slide. Okay. We're on the third factor now out of the four.
Creating options with mutual gain. Now, this part is really where you use creative problem
solving techniques and there's tons of them. Brainstorming is just one. But what's important
about this part of the process is that it's an expansion and then it's contraction. Okay. So when
you're expanding, you invent all possible options without judgment, without filter. Just come up with
a bunch of different things. And the second step is then you develop them. Okay. Develop them,
develop them. Some are just going to be, yeah, this isn't good. This is going to be good. And then
you evaluate them. And you look for the ones, the options that you developed, which have the most
neutral gain there. And let's say then you decided on what you've narrowed it down to one,
and then you've negotiated it and then you realize, oh, there's other things we need to
reevaluate. And this is always the, this is always how it goes. So for example, I had one recently,
it was a partition action and the parties were, they agreed to sell the house. There's a lot of
things that went around with it. But as we went through reinventing options, we had to identify
nuances to make sure that they didn't get stuck and to make sure that they were able to
have a solid agreement and have a solid resolution. So that's how you do it. Invent all possible
options, develop them, evaluate them, get rid of the ones that don't work, and then
then continue to negotiate that one you decided on and then make sure it's workable. Go through all
the scenarios. You don't want to see the parties back at the mediation table. Okay, let's go to
the next slide, please. The use of objective criteria. The reason why this is important is
because one, the other side will, the parties will find it more palatable. Nobody wants to hear
your subjective intentions, but you say some, if you come with objective criteria, for example,
the market rate, or you agree on an expert and the expert recommends this, and that leads
credibility and the parties are going to find that the process then is fair. It says here on the
slide, agree on fair procedures. There's an example called one cuts, one chooses, and this
is just make sure that the process is fair, that both parties have a say in what happened.
One cuts, one chooses means, so you have a pie, one party cuts up the slices, and the other party
gets to select it. So that way they both have a hand in divvying up the pie. I referenced using a
third party expert in that partition action that I just mentioned. They agreed upon a neutral
third party real estate agent, and the market, the price that they're going to put the house on
at sale for was going to be the part, the market price that the realtor, excuse me,
going to be the price that the realtor recommended based upon the market at the time.
And then there was also a provision in there that if the, there were no offers at the house
with a sale within I think 60 days, if the expert, the realtor then recommended that the parties
reduce it, then the parties would follow their recommendation, but there was also a limit on
how much they can go down and reduce it. Okay, objective evidence and standards,
non objectionable. We've already kind of talked about that. Now let's go on to the next slide.
Okay, now Bob is going to discuss styles of mediation and more strategies and how to go
through the process from convening all the way through closing. He's also going to talk about
joint sessions, shuttle diplomacy and private caucus, your info, real treat. Having the broadest
terms, a mediator has a lot of different styles, but in the broadest terms, I think you can say
that a meter style mediator style can be viewed on a continuum. So on one side, you have a purely
facilitative mediator. On the other side, you could say a highly evaluative and mediator.
And most, if your, if your mediator has a business or litigation background, I'm going to say that
you're going to go from probably the middle of this spectrum more towards the value of weight of end.
If they have more of a social services or anthropological background, probably more of the
facilitative. And what does that mean? A facilitative style, it focuses on assisting the parties to
negotiate by resorting to communication and helping to create options for resolution. It avoids any
kind of coercion or suggestions, evaluative questions are framed in a facilitative way.
A purely facilitative style is used less in litigated matters. But this is more about hands-off
procedure. And in mediation, you always want the parties, the airtime to be more on the party side.
You don't want the mediator to have the airtime, right? It's their process. And a facilitative
process, even more time will be with the parties. Okay. Evaluative style, this is where the
mediator may urge, recommend, evaluate, and buys. It allows the parties to test reality of their
predicted outcomes with the mediator who will express opinions on settlement, may provide
evaluations on the level of settlement, conduct a reality testing, conflict in negotiation,
and negotiation coaching. Mediators may also discuss the consequences of not settling
and may also assist the parties and council in risk assessment. Again, usually mediators with
a litigation or business background will do more of this. And it's usually done in private caucus.
It's also something that's done towards the latter end of the mediation and not at the beginning.
Okay, let's go to the last slide in my series. Managing the mediation process. So as a mediator,
you want to conduct a mediation in a way that is fair, that opens the parties' perspective,
creates a system of mutual cooperation and response in kind, and the participants see an answer for
themselves. As I said, the airtime should be in the parties' favor. The mediator must manage the
mediation process, the parties, and the relationships, and the content. And to further discuss how all
of this is done, I'm going to now turn this over to my co-presenter, Robert Cohen. Okay, now it is
my great pleasure to introduce my co-presenter, Robert Cohen. Robert Cohen has been a lawyer
for over 40-plus years. He's been a member of two Beverly Hills Bar firms and handled a wide
variety of litigation matters, litigating numerous personal injury claims, HOA disputes, elder views,
claims leasing, habitability, landlord-tenant disputes, business partnership and contract
disputes, and commercial collection matters involving domestic and international companies.
During that time, he's tried more than 100 bench arbitration and jury trials and has been involved
in over 1,500 disputed matters. Robert first became involved as a mediator in the early 90s,
although you wouldn't know it to look at him, with the initial Los Angeles Superior Court program.
And since that time, he's mediated hundreds of matters as a mediator for Los Angeles Superior
Court for alternative dispute resolution services and has participated in over 750 mediations
involving litigation matters as a mediation advocate. It is my great pleasure now to introduce
you to my co-presenter, who I am proud to also call a friend, Mr. Cohen. Go ahead, Robert.
Okay. Well, thank you, Lisa. That's very kind and generous of you,
and I appreciate the introduction. Well, as you can see from the first slide,
from my point of view, mediation is about making a deal. Now, you may not remember Montee Hall from
the 60s and 70s and 80s like I do, but perhaps you know this other gentleman on the left,
who's a popular host now of the current program. I'm not really familiar with him,
but I know he's a popular guy. My presentation will be quite different from Lisa's. I will explain
primarily from my experiences how to do it, how you can grow into the role of mediator.
Next slide, please. We all know that mediation is the most popular ADR process.
In mediation, parties come together in a collaborative manner. The mediator is the
director of the show, the mediation process, with the goals of reaching settlement and
avoiding costly litigation and trial. Mediation is far more efficient and effective than litigation.
It's a much healthier dynamic. It fosters a positive mentality, and today it is generally
conducted virtually, and the all-in cost of mediation, mediator fees, attorneys fees, loss of
time, pails to the cost of going to trial. Every mediation has five separate steps.
The first step is convening what happens before the mediation commences, and we'll get into that in
a moment. The next step is the opening. This refers to what the mediator says to the parties.
In California, almost always in separate sessions and separate breakout rooms,
what the mediation ground rules are, the need for civility, and he sets a relaxed atmosphere.
He explains how the mediation unfolds. As I said, separate sessions, separate breakout rooms, are really the style in California.
Outside of California, oftentimes there are joint sessions, but for whatever reasons, California has developed a different attitude towards this, and separate sessions is the rule of California mediation.
The mediator makes clear that the party briefs have been read and that the law and facts are understood, and that there are two sides to the equation.
He has to be neutral. Then the mediator gets involved in negotiation. This is crunch time after he spent a lot of time already in separate session with the parties going over the back stories, the emotions, all of the angst and frustration.
And this is where the mediator moves the litigants to agree, hopefully, to a negotiated settlement. The mediator guides the settlement, and that's what you will be doing.
Active listening is the key to this process. The mediator must listen carefully and restate what the parties and attorneys have said, so they know you get it.
And when the king is wearing no clothes, as happens sometimes, the mediators must occasionally speak out. But on other occasions, the mediator should let things go.
This is a very subtle process. Many times settlement is not merely about money.
Of course, at the end of the day, if the case is settled, there is a need for a closing, and this is tying up the loose ends.
Hopefully, there will be a settlement, but sometimes there is not. There may be an absolute impasse, or there may be a mediator's proposal, which we will also discuss later on.
This is the tricky part for the mediator, and it must be handled carefully. If there is an impasse, this is an opportunity for the mediator to suggest that the parties continue negotiating after the mediation session.
If there is an agreement, then the mediator must carefully explain the terms of the settlement. If there is a mediator's proposal, then the mediator sets out the ground rules for the mediator's proposal, and then after the mediation has stopped, sends out an email outlining what the mediator proposes to both parties.
This can be very, very satisfying if you read the room right and understand where the parties are at.
Next slide, please. A lot of people, when they start learning about mediation, have tremendous enthusiasm, and they think it's really not that hard a process.
That was my thinking years ago. Well, I'll tell you, it's kind of like trying to learn how to play golf. It may look easy, but it's not.
It takes time and practice and thinking and mistakes until you start to get it right.
In the United States, there are 25 million golfers in any year, yet there are only 30,000 members that belong to the Professional Golfers Association, the PGA.
It takes a long time and thousands of hours of practice for any golfer to obtain a PGA card, and I would guesstimate that the ratio of qualified mediators to the number of attorneys is about the same.
Approximately 1,000 to every million lawyers. So if there are 3 to 4 million lawyers in the United States, chances are there are 3 to 4,000 extremely qualified mediators throughout the country.
And this does not happen by accident. Now, there are some prodigies. Sometimes people are just gifted.
You may have seen such a thing in your law school years where one student would just listen and then get the highest grade on every every exam.
But for most of us, us normal people, we have to practice and practice and hone our craft.
And of course, this applies to many other professions as well, whether it's aviation, teaching, all sorts of things. It takes time.
And in my mind, at the end of the day, mediation is really an art. But to really learn about mediating a case, you have to do it.
Experience it first hand, just like playing a practice round of golf, or many practice rounds of golf. You must get your hours in.
Your best opportunity to initially have a mediation experience and to really get a sense of what it's like to work with people that are in extremis and angst and fear is to take on pro bono cases.
Now, there may not be attorneys involved, and you may be in the small claims court and the stakes may be small.
But if you can get through that and start to control the tempo, you will be getting an idea of what it's all about.
I know several top mediators that actually started their mediation careers by hanging out at the small claims court here in Los Angeles.
And they to this day say it was a remarkably beneficial experience.
Next slide, please. Now, persuasion is at the root of any good negotiation.
Everybody is a salesman. You must persuade the attorneys. You must persuade the parties.
You must give pointers to the attorneys on how to persuade their clients. And you have to do this on both sides of the fence.
In the world of mediation and negotiation, Robert Chaldini is the master. He is the master of persuasion.
He sets out the theories on how you can win at mediation if there is such a thing as winning.
Now, there actually are no true winners of mediation. But if the case is settled, everyone wins.
Here is what Dr. Chaldini says are the key points of persuasion.
And he lectures on this on YouTube, in courses, in seminars, and he's written the leading books on the art of persuasion.
The first is reciprocity. You must make people feel compelled to be giving.
Because once a person gives, the person that receives feels obligated to that person. They feel like they owe something.
This is a very strong psychological impulse. The next important key to persuasion is likability.
People are motivated to say yes to those that they know and like.
Almost as if they owe them something. Most people like to please. And that's a good thing.
The third principle is social proof. By following the lead of others who are similar or similarly situated, one feels comfortable in making a decision.
If your next door neighbor suddenly bought a Tesla and you are wondering whether it's a good car to buy and you like your neighbor, you're probably going to be more comfortable in buying a Tesla.
The same thing happens in mediation. If you can make an analogy to something that the party can relate to.
The fourth principle is authority. People are comfortable in relying on others in power for guidance on how they should respond.
I cannot tell you how many times when I've asked the clients of the attorneys, that is the parties, what their opinion is, they say, well, I rely on my attorney to help me.
So whatever my attorney decides is right, that's what I will do. Now, they don't always do that, but that happens more often than not.
The fifth element of Dr. Chaldeany's rubric is consistency and commitment.
Once one makes a choice and takes a stand, that person will encounter personal and interpersonal pressure to behave accordingly.
No one likes to be considered someone who makes a promise or makes a commitment and then reverses position, or at least very few people do as far as I'm concerned.
The sixth element is scarcity. People value opportunities that are less easily attainable and rare.
Now, this may not apply as much as the other elements we've discussed so far, but the fact is when someone feels that they're getting a deal or a value or that they have a special opportunity to make a deal, they will be motivated to do so.
The final and seventh element is unity. We are greatly influenced by people we identify with and those that have shared similar experiences.
In other words, unity creates comfort and trust.
And that can happen in caucus when the mediator shares his or her experiences with the party and the attorney as well, so that they can see they're kind of on the same plane.
Next slide, please.
Well, let's go to a case example. Enough of my lecturing.
Here's where it gets interesting. The first case example is the story of trust building with a fast talking crypto coin entrepreneur.
This was a very interesting case. It happened a couple of years ago. It was one of my cases. It dealt with trust.
Now, I mediated a case between two close family members. One party was the uncle and the other party was the nephew.
The uncle was a network TV sports videographer, very talented at his job, but not a genius in any respect to business or the management of his money.
The nephew was a young, brash, bright, good natured hustler who quit college in 19 to enter the early world of Bitcoin.
Now, he made a lot of money and he made a mark early on and received national recognition.
While he was receiving this recognition in the early days, the uncle suggested to the nephew that he invest $5,000 of his money into Bitcoin.
And then if you did this happily, the end result, the uncle now owned a brown to 120 Bitcoins.
Well, initially, it only cost $5,000. Today, the way the Bitcoin is going, you know, 100 Bitcoins could be several million dollars.
But at that time, of course, it was $5,000. So during the eight years prior to the mediation, the uncle drew down his Bitcoin account
that was held by the nephew. He used the money to make peace with a former girlfriend that he had a bad falling out with
and to take care of debts and to pay for European vacations. He was a spendthrift.
The nephew was getting tired of what was a reverse relationship.
Uncle was always hounding nephew for money and nephew was always questioning uncle's needs and wants.
Because nephew felt the uncle was immature and not the brightest of all and that the Bitcoins were meant to be his retirement,
which was coming up in a few years. Ultimately, nephew got so angry, he refused to take uncle's calls or liquidate any more Bitcoins.
Now, this caused a great deal of stress in uncle's life. It was a modern day family squabble over money and maturity.
The uncle was poised to sue in San Francisco. The uncle had counsel.
Nephew was in pro-per, winging it with lots of outside free advice from other Bitcoin mavens and attorneys.
In order to avoid costly litigation and the possibility of an IRS audit, if the matter was litigated, they decided on pre-litigation mediation.
Five hours into the mediation, nephew, acting alone, without really a support team, was losing focus and he was losing energy.
And the matter was only scheduled for seven hours and I really was concerned that we were going to have an insurmountable impasse.
No real process had been made. We'd spent hours unwinding the family back story, all of the internacing issues, discussing legal issues, IRS issues,
proper valuation, number of coins still in existence since they had a very informal kind of a wallet type of accounting process.
We spent hours unwinding the family back story and discussing the legal issues, valuation of the Bitcoins, number of Bitcoins,
and nephew was not at all open to meeting the uncle halfway in terms of any sort of settlement.
He was losing focus and was disappointed with the mediation process.
An idea came to me that I had not ever utilized before.
In private caucus with an nephew, I just said out of the blue, do you trust me?
And his response was quite interesting. It was, I trust you as much as I can.
Well, he was right. I had no skin in the game, so my response was as follows.
You have a really bad family dispute that must be settled, especially in light of the family animus and the breakdown of the family unit and the closeness of your mother and your uncle.
And the fact that there are serious IRS issues with potential legal consequences far beyond that of a civil lawsuit.
So I'll tell you what nephew, if you promise to use your best efforts to settle this case today, I will not charge for any additional mediator time.
Beyond the seven hours for however long it takes.
Well, he was kind of shocked that I would give away my time without any limit whatsoever.
He accepted uncle accepted both sides re-energized and after four more hours, nine hours of mediation, we settled.
Why? Well, both sides were tired. That held both sides wanted the dispute done.
And the fact that I had skin in the game got them to have additional respect and confidence in what I was proposing.
And this motivated them to close.
So that's how you can deal with things. If you think outside the box and try to create trust.
Next slide, please.
The first phase of mediation, as I stated above, is convening.
And convening is kind of an interesting process because on the surface, there's not much to it.
At this point, the parties have agreed to mediate. The mediator has been designated.
Council and the parties have signed confidentiality and mediation agreements and set a date for mediation.
Well, what more is there to do? In my opinion, there is something more to do.
A best practice for convening is for the mediators to send out a customized in-depth convening letter confirming the date, location and time,
but also setting out the ground rules, the duties and the responsibilities.
But to be truly effective, the mediation convening must be more.
The more that is another best practice is to conduct a pre-mediation session with council.
Separately or together, usually separately, by phone or on Zoom.
And you might spend 20, 30, 40, even 50 minutes in this process.
But if you do this, you will have the best preparation hour you can possibly obtain to handle the mediation.
Some mediation teachers and professors call this the mediation before the mediation.
It's very important. I cannot overestimate how important it is.
These conferences build comfort between the mediator and the attorneys.
It builds trust and rapport. It expands the comfort zone on both sides.
And it gives the mediator a chance to really get an idea of what the case is about.
Because at this point, the mediator hasn't received a brief.
And if time is spent in discussing the facts and the law, the mediator will be way ahead of the game.
In a sense, pre-mediation conferences are like a two-way movie trailer.
It applies to both sides and the trailer is markedly different.
But that's okay. Mediation is a collaborative process.
And these sorts of meetings help everyone collaborate and participate in understanding pain points, strengths and weaknesses.
Now, let's get to a simple convening letter that I use and that I update from time to time.
Let's go to the next slide, please.
So here's my mediator convening letter.
And it again states that I'm the mediator. We're going to have a Zoom conference.
And I want briefs from them by a certain date.
And I advise them that they should tell me if they're not going to submit briefs.
I also tell them I'm not acting as an attorney or a fiduciary.
And that they should seek counsel.
So here I am doing a personal coverage point so that no one can later claim that I gave them legal advice.
That's very critical.
And sometimes you'll be mediating with a pro per and he will write he or she will rely on you as if you're their attorney or consultant or judge or whatever.
And then they'll be very angry and upset.
Let's go to the next slide.
Here we talk about exchange and briefs, communicating with the mediator, continuing confidentiality, settlement and release documentation.
Now, some mediators take a very active role in preparing the settlement memorandum.
That's not the long form settlement agreement or release, but the settlement memorandum.
Other mediators don't want to even touch it.
They will tell the attorneys to exchange confirming letters as to the deal terms.
And then thereafter, one or both attorneys will negotiate the long form settlement agreement and release.
It's a matter of personal preference and it really runs the gamut.
Okay, next slide.
And then again, a very cordial close.
Don't hesitate to contact me.
You have to be open to talk to the attorneys and they love it.
They love it when the mediator calls them out of the blue and either speaks with them directly or sets an appointment to discuss the case.
Everybody really wants to be heard and this is a very unusual situation, quite frankly.
How many times can you talk to the judge in private before you try the case?
How about never?
And here you are talking with the mediator from an attorney's point of view and you're doing your best to convince and sell the mediator right now that your side is the right side.
Okay, let's go to the next slide.
Now, opening is the next part of the mediation and this is when the mediation actually begins.
Opening is where the mediator meets and greets the participants and the mediator creates, if at all possible, the perfect mediation environment.
Now, of course, nothing is perfect, but the mediator has to shoot for that to really get everybody comfortable and to feel confident that they will be settling their case.
In California, as I've explained, people are in separate session and separate breakout rooms.
So the opening occurs in these separate rooms.
Now, California does not abide by the rest of the country with joint sessions.
And probably that's because, quite frankly, California is a very litigious state, probably the most litigious state in the country.
And from past experience, I can tell you personally, when I was mediating in the early 90s, joint sessions were horrible.
I was not prepared to deal with the anger that was expressed between the parties in a joint session.
I think today I might be more qualified to handle that kind of anger in a joint session, but overall, it just doesn't work here in California.
Now, we've talked about the opening being the first statement that the mediator makes.
And in terms of a statement, I've already said that he wants to make the people comfortable.
So he considers carefully as he's talking and interviewing the parties and their attorneys, the levels of anxiety, emotions and relative power.
Sometimes it will be equal.
Sometimes one side will be much further ahead than the other in terms of grasping the case or in terms of lack of confidence in their position.
It just depends. Everything is fluid in mediation.
Zoom sessions require focused environments for all participants.
Extraneous noises and visual distractions harm the communication process, especially in a Zoom setting.
I've had this happen multiple times with parties being on an iPhone in their car, attorneys being literally at the beach, and it is a problem.
Now, it doesn't happen all the time, but you have to be prepared actually for anything to happen in mediation.
I've also had situations where the attorneys do not want to have me see their face.
And you have to decide whether you're going to continue with the mediation if their screen is black.
I do it, but I know other mediators that refuse to do that.
Some mediators are known for introducing music into the mediation process.
Music makes people comfortable. It makes them relax, whether it's listening to Beethoven's Ninth Symphony or current jazz.
I've even heard of a few times where a mediator has used a Tibetan sound bell to create the right mood. But then again, this is California.
The point is, think outside the box. Try to come up with a way to connect with the parties and with counsel.
And if you do, they will be much more relaxed and much more comfortable.
And they will be able to think clearly rather than be in a stressed mode of thinking.
Active listening is very important to the process.
And it's very important that the party in particular feels that the mediator gets him or her and has heard him or her and that the mediator has confirmed this verbally.
This places the participants at ease.
Positive language, positivity is always mandated for the mediator.
Now, some mediators act aggressively and negatively when the parties or the attorneys get angry.
But this is not a win-win situation. You need to deflect the anger.
You are the roving ambassador and sometimes the cheerleader and you do everything all at the same time.
One other thought to consider about the impact of the mediators visual and auditory tones.
Here's an interesting quote that I got out of the Harvard Business Review from several years ago.
And it's from an article called Make Your Enemies Your Allies.
The quote goes as follows. Trust is based on both reason and emotion.
If the emotional orientation toward a person is negative, then reason will be twisted to align with those negative feelings.
When we experience emotions, blood recedes from the thinking part of the brain, the cerebral cortex, and instead rushes to the oldest and most involuntary part, the reptilian brain stem.
This cripples the intake of new information and it makes people just bear down and harden their positions.
So the emotional brain must be managed before adversaries can really understand what is happening in the mediation, the positions of the other side, and how best the matter can be resolved.
Let's go to the next slide, please.
Communication. We've talked about this already quite a bit.
It happens everywhere, but especially in caucus sessions.
And we know this is a private session, but quite frankly in California, almost all sessions are private because we never have joint sessions.
In caucus, sometimes people can really express their emotions.
They can get their feelings out and be validated and that is a very wonderful thing in the mediation process and getting the parties to compromise and to be persuaded to make a deal.
I cannot tell you how many times I've seen the parties relax and even thank me for understanding their situation.
Basically, people want to be heard and if you let them feel like they've been heard and actually they are heard, it does wonders in terms of trust and motivation to settle any case.
Now, here's some tips for caucusing.
Be enthusiastic.
Be convincing.
Recap agreed upon terms to reinforce the theme of cooperation and progress.
That is important. Make them feel, makes the parties feel that something positive is happening, that progress is being made.
When caucusing, you must deftly and carefully be ready to jump from room to room so that momentum keeps flowing.
If you take a long break or if you go too long without checking in with the other side, sometimes they'll wonder what is going on.
They'll lose focus and you will go backwards.
Now, there are ways to deal with impasse and closing gaps.
Probably about as many different ways as there are mediators.
The point is, don't give up when it appears that impasse has been reached.
Use this as an opportunity for further exploration.
Dig deep and find out the true issues and concerns of the parties and council.
What are their motivators?
Are they afraid of? Is it money?
Is it emotional issues?
Is it secrets?
Find out where they're at.
Logical analysis may not be effective in terms of convincing a party or an attorney that is overly emotional.
And believe me, attorneys get emotional too.
I've seen it many times.
When there is impasse, it is necessary for the parties and council to brainstorm and to allow their minds to wander.
And sometimes, some great ideas come up during those impasse sessions, kind of like a last gasp.
But the last gap would not a gasp, but the last gap is the last step necessary to reach agreement.
And often this final gap merges in two situations.
The first one, where final concession and settlement occurs after long and exhausting negotiations over many hours.
The parties finally decide to give in and move on.
And that is a great way to settle cases.
Many mediators are known for just exhausting the parties and going on for hours and hours.
That's not my practice, but it does work in many situations.
Another way is to come up with a mediators proposal.
In these situations, this last gap is filled in by the mediator.
And he creates what he thinks, or she thinks, is the ideal settlement situation, what the ideal settlement terms are.
And this takes some careful consideration.
If you've read the room, if you know the parties, if they trust you, if you get a sense of the law and the facts,
whether it's money or something else, then you can make a mediators proposal, which is set out after the mediation ends.
The proposal was sent to council, who then advised their clients and then there's a certain process where they either agree or disagree and you either have a settlement,
or you have no settlement.
And again, if there is no settlement, even with the mediators proposal, it behooves any mediator to continue on with communication to the attorneys,
because many cases do settle after the mediation concludes whether or not there is an accepted mediators proposal.
Now, there are some ways to get people reactivated.
You can take a break, you can ask, tell people to go get a sandwich or lunch, ask them to describe their ideal future,
restate what all the parties have agreed to in a positive fashion, validate that they have made real progress, be a cheerleader in a sense.
You can try role reversal.
If you were the other party, how would you feel?
You can even suggest at this point that the mediation be continued because not enough is known about the facts or the legal issues have not been properly briefed.
And it is time for the attorneys and even the parties sometimes to do some homework and come back again for another session.
In terms of a mediators proposal being accepted, I think the more the attorneys and parties trust the mediator and the mediators judgment.
In terms of the mediation, the more likely the mediators proposal will be signed off on by both sides.
I've seen this happen many, many times in my cases.
Next slide, please.
All right.
We've talked about so many different things so far, but let's get into negotiation.
There's a hardball style, which is the traditional approach.
And there's a more soft approach that seems to be preferred by many mediators and even by some attorneys.
I can tell you from my experience that at mediation, most parties feel uncomfortable negotiating.
It shouldn't be surprising if you just look at how many automakers and car dealers now have fixed prices that are not subject to negotiation.
People get frustrated by the negotiation process unless their attorneys and even the attorneys and get frustrated too.
Negotiations cause anxiety, frustration, concerns of being perceived as weak and fears of losing.
However, this is not an adversarial process.
It's a collegial collaborative process and you have to dissuade people from bringing their emotional baggage and anger to the table and to collaborate.
As I've said, hardball styles are the rule traditionally, but they're changing.
The book getting to yes has helped popularize the reasonable and rational approach.
Here are some difficult behaviors of attorneys that the mediator must be ready to deal with.
The attorney micromanages the process and the mediator.
The attorney prevents the client from participating and communicating directly with the mediator.
In effect, the attorney is a control freak.
The attorney refuses to acknowledge weaknesses and defenses as to his case.
I see this all the time.
I call those attorneys fullbacks.
They just run straight ahead, right into the line, and they don't want to see anything else other than their position or talk about anything else other than their position.
And this is wrong.
In my experience, credibility between the mediator and the attorneys is established and trust is created where the attorneys and parties acknowledge weaknesses in their positions.
You know, showing your weakness can actually be a strength because then you have created a basis for the other side to trust you.
You've admitted that your case is not 100%.
And of course, in almost every situation, that is the way it is.
Otherwise, why would you keep litigating?
You'd never get to a mediation if it was all one side and nothing to the other side, at least in the vast majority of cases.
During the negotiation process, the mediator should avoid interrogation or investigative questioning in a district attorney style.
Instead, the mediator should speak in a conversational tone and should engage, as I've said before, in active listening.
That really is so important. Asking open-ended questions to the parties really helps them simmer down, unwind, and tell the mediator what is going on in their minds.
Also, the mediator should confirm the progress that is being made.
Sometimes, when a party makes a dramatic statement, silence of the mediator underscores the importance of the statement of the party.
The old saying about less being more can be very powerful in separate caucus.
Another way to help the parties in caucus and in terms of negotiation is to have them look at the case from a wide-angle lens.
That is, make them see in a kind way the entire playing field and the other's point of view.
And also, explain to them how a judge might react at trial.
Of course, the conveyance of authors in exchange of information is a tactical and subtle process, but if you maintain a positive manner, it usually works.
The mediator should avoid commitment to possible solutions.
Don't oversell, because if you can't deliver, everything falls apart.
But be cautiously optimistic.
So then, in my opinion, the key to conducting a successful negotiation and mediation is very clearly make and create a connection.
There are numerous negotiation techniques and mediation styles and all sorts of theories, but the bottom line is it's less about your knowledge of these finite techniques and theories,
and more about your ability to connect with the parties and counsel so you establish a relationship.
Once you establish that relationship, you're golden.
So how do you do this? How do you establish that connection?
Well, the parties' backstories are very significant.
Let them share with you what has caused this dispute, whether it involves them, their business, their children, their family.
Get to the root of the problem. Go deep.
Be sincere while you're active listening.
Inject humor where appropriate. Don't overdo it, though. That's... humor can be dangerous.
You can get people very upset with a kind of a smart-out-of-the-comment.
People are very stressed when they're in mediation.
And by sharing personal details about yourself to a certain extent in a limited way,
to show that you and the parties and sometimes the attorneys have shared experiences and common grounds.
Again, that builds a connection and builds trust and comfort and always maintain an exclusive approach.
Don't make people feel isolated.
Before you talk to the attorney in a separate caucus room, explain to the parties in the presence of their attorney
that you may have to speak from time to time privately with the attorney.
And this is a normal process in a mediation session.
Then they won't be shocked.
Surprises, in general, in mediation are not good.
You need to telegram ahead what you will be doing.
Of course, you must be patient. You must be persistent.
You must be detail-oriented because if you get the facts wrong or miscommunicate,
you will lose the confidence of counsel and the parties.
And it is so important that the mediator not be judgmental.
That will cause a mediation to go to impasse almost immediately.
Next slide, please.
Now we're going to talk about the closing.
The closing statement.
Now, this is the final stage of the mediation.
And at this point, let's assume that the case has settled.
At the end of the mediation, the mediators closing statement typically includes the following elements.
The mediator thanks counsel and the parties for their participation and expresses gratitude.
And there should be gratitude.
This is a great thing.
People's lives have been changed for the better.
They now can move on with future things and not be born worn out and buried in this anxiety and cost of litigation.
If the case has settled, don't forget this is a collaborative process.
And settlement is proof that collaboration succeeded.
Emphasize that with the parties and the attorneys as well. Thank them.
If the case is not settled, there still is a closing and the mediators should try to keep the door open to future negotiations on the phone.
Or otherwise, because many times cases will sell post mediation, especially where the mediator perseveres and is persistent.
Those two P words are very important.
When a mediators proposal is requested and the closing occurs, the mediator must explain the process to all.
That is very important.
Most attorneys know what a mediators proposal is. I'm sure you do if you're in this course.
But many parties and I would say the vast majority of them that are in mediation for the first time have no idea what it's about.
Then, in addition, when you're done with your closing and a settlement has been reached, you have to discuss right before you sign off how the settlement will be documented and what the exact terms are.
There are follow up steps and timelines and attorney responsibilities that have to be set out in a closing memorandum from the mediator.
Now, sometimes the mediator merely states what the closing terms are and asks the council for the parties to confirm their acceptance.
Other times the mediator gets more involved and will use a lengthy closing memorandum.
All of the big mediation services have their preprinted forms that are ready to go.
Many mediators don't like to be involved in writing anything. They don't want to be drawn into potential litigation if the deal falls through.
There are many different ways and theories of how the closing documentation should be handled.
One thing though is very clear. Usually there's a long form settlement agreement and release and that is not prepared by the mediator.
The mediator should not be practicing law and should not get into interpretation of rights and responsibilities and duties of the parties that might be committed to in a long form document.
At the end of the day, it's important for the mediator to express optimism and this will help with future interactions and it might even bring you some more cases.
Many times after the case is settled there will be delays, there will be further issues that come up and the more credibility you have with the council, the easier it will be to close the deal.
Sometimes multi-party mediations require multiple settlement documents and even memorandums. Things can get complicated.
But the bottom line is the connection between the mediator and the attorneys at this point is critical.
Next slide please. Now we've talked about this already and we're going to go over this a little bit more.
Anger is an ever-present issue in mediations.
Now sometimes the parties are quiet and calm but I find that in most mediations either the attorney or the party has an issue with anger and that can be difficult to deal with.
Anger covers up underlying emotions.
It prevents one from utilizing the rational portion of their brands we've discussed.
An ecologist Paul Ekman calls anger one of the six basic emotions that is universal across all cultures.
It is a response to a threatening external stimulus. It impairs decision making. It causes one to take longer to make choices and decisions.
And by creating an environment of comfort and trust and collegiality, one can get to the bottom of someone's anger most of the time. Not always, but most of the time.
Now there are other emotional barriers to reaching settlement. Sometimes people are narcissistic. They just are.
They're all about themselves. They can't possibly be objective or put themselves in the place of the other person.
Other times a party will resist and reject a proposal and this by the way applies to attorneys as well simply because it's made by the other side.
I find that to be the case more in younger attorneys and less experienced attorneys but it happens.
Lastly, some attorneys are afraid to take major steps because they do not want to be perceived as being weak or they don't want to show their cards.
I think that's a mistake. I think most of the time everybody knows pretty well what's going on and the more open the attorneys are and the parties are the easier it is to settle a case.
You know, winning seems to be a very important world. Boy, do I have that wrong.
The word winning is a very important concept in America. Certainly it is in law and it is in many, many other professions, avocations and even hobbies and of course sports.
Everybody wants to win. Nobody wants to be a loser and some attorneys and a lot of clients and parties bring that mentality into a mediation.
But that's a false sense of reality because in mediation if there is settlement, no individual person wins. There is a collaborative victory for all.
Another important issue that comes up is the issue of apology. It doesn't happen in every mediation but it does happen.
And apologies are very powerful. Apologies can be the place where parties speak their minds and become vulnerable and humanistic.
It need not be long or extensive.
But it is pivotal in helping the parties reach closure when one party acknowledges the other's apology.
This results in a reversal of power. The apologizing party reduces some of his or her power and places him or herself at the mercy of the offended party on the opposite side of the fence.
When the offended party accepts the apology, it literally can turn the tide and anger is completely put to rest.
Here we have another case study. This is a case that I handled some time ago where two angry ex-spouses were furious and fighting what appeared to be over money issues.
They were incredibly angry and it was interesting because these two spouses were in their early 70s and had been divorced a long time.
The dispute was over backspousal support and money and anger, a real toxic combination.
The ex-husband claimed the ex-wife collected twice in California and Arizona what he owed and that in fact she owed him $60,000 plus interest.
Meanwhile, the ex-wife claimed that the husband owed her $12,000 more in back interest that she never received and that she owed him nothing.
They had a terrible divorce decades before and they never had made peace.
The mediation went on for hours. Counsel were not especially helpful. Trial date was coming up quickly.
No judge would want to hear this case. What an aggravating case.
In fact, the ex-wife had actually had a heart attack a few months before the mediation and was forced to retire.
We were at impasse after several hours and it seemed to be insurmountable, but then I took a different tact.
I stopped with the distributive bargaining. There was no brow beating, no analysis of the ex-husband's accounting and its accuracy.
We'd been through all that enough. I said to each of them in separate rooms, of course, what would you really want if you could have it your way?
The ex-wife said, I want this done and I want to live in peace. Well, that makes sense. She was sick and she was angry.
And if we don't settle, I need to pay $9,000 to my attorney to get ready for trial.
Now, the ex-husband said, not unsurprisingly, this isn't about money. Not really.
It's the fact that he had been completely frozen out and cut off from his grandchildren now for several years.
They wouldn't let the grandchildren take calls. They wouldn't let him visit and always he angry.
He told me I just want to visit and speak to and see my grandchildren and give them a hug.
And since this litigation and actually for years before, my ex-wife and my daughter had banned me from doing so.
Well, a light bulb went off in my head.
There was something about her statement of the $9,000 that I just couldn't get out of my mind.
So here was the solution. I got the ex-wife to drop her cross claim and agree to pay her ex the $9,000 that she was going to be forced to pay her attorney for trial.
And then I got the ex-husband to gift that $9,000 back to the grandchildren for their future education and needs on the condition that the ex would allow them to speak with his grandchildren and visit them.
So here you go.
Grandmother pays $9,000, not $50,000.
Money doesn't go to the attorney. Money goes to her grandchildren.
And all grandmother and daughter have to do is allow grandfather to have a reasonable process of visitation and communication with the grandchildren.
Case closed.
Our final section is creativity.
Another slide, please.
So now we're going back to the beginning.
What is mediation? A science or an art?
It is certainly both. And Lisa has provided you with a wonderful overview of the science.
But at the end of the day, from my perspective, not being an academic, I believe mediation is more art and science and requires continual creativity and thought.
And being in touch with the communication of the participants, both in terms of their verbal and nonverbal statements.
The mediator must be imaginative and creative, especially when the parties cannot be so.
Again, many attorneys are not creative thinkers. They're just not.
They're smart. They're analytical, but they are not creative.
And you just have to accept that as a fact. And the more creative you can be in coming up with a solution, which they then adopt, the easier it will be to settle almost any case.
But again, persistence, perseverance, that's what it's all about.
It's the job of the mediator to be the facilitator and create a relaxed atmosphere, as I've said probably 10 times already, not more.
You need to let the parties think clearly and get their feelings out and their ideas regarding settlement and solutions to flow.
Storytelling by the mediator is perhaps the best way to get participants relaxed, exchanging perspectives and role playing works too from time to time.
Now, if the mediator is creative, here are some ways that the parties can feel in touch with what's going on and open to settlement.
You must explain party benefits versus resolution of issues.
Sometimes you need to give up on issues in order to close the case.
Sometimes you don't. You know, benefits outweigh issues, issues can outweigh benefits.
Small details versus the big picture. It's very important to deal with both.
I had a client once, and this was not a mediation, had a large collection judgment in the amount of just under $200,000.
And he was unhappy with it. He wanted to appeal.
And I said to him, Mr. X, you're in your mid-70s. This was about 25, almost 30 years ago.
And you're winding down your business. Do you really want to have an appeal going for many more years, possibly the rest of your life?
And I finally got him to agree. No, he did not. And the case was done.
It wasn't a settlement, but in a way it was because he agreed to just take the judgment and not go further.
Next slide, please. Here we have another case example.
And this deals with creativity as well. But it's not emotional creativity.
It is more structural creativity in terms of the settlement deal points.
Here we had a little old lady from Pasadena in her 80s.
She was land rich and money poor.
And one of her tenants in a almost 100-year-old grouping of cottages built in the early 30s was having a terrible time because these quaint individual cottages were largely uninhabitable, especially the one occupied by the struggling singer.
It was so bad that the sewage water backed up into the bathtub in the singer's cottage, approaching seven or eight times over two or three years.
This happened during COVID. There were other habitability issues.
Heat, insufficient repair efforts, all sorts of things besides the plumbing issues.
Good lawyers were on both sides of the case, but there was no insurance carrier because the landlord, as I said, was a little old lady from Pasadena and she didn't have liability insurance due to the state of disrepair of her rental units.
She only had insurance under the California Fair Plan, which was for fire.
I ballparked the case valued between 40,000 on the low end and 90,000 on the high end, depending upon how plaintiff's counsel was received and whether or not the jury disliked the little old lady.
But enforcement, even if the $100,000 or $90,000 judgment was obtained, would be difficult.
And it would probably be delayed until the landlord's little old lady died and the property was sold. Both sides dug in.
Defense lawyer said the little old lady had no money. I didn't believe this, but I had a feeling that he wasn't completely wrong.
Meanwhile, the plaintiff's lawyer insisted that she had to get $100,000 or she was going to court and then she said she might take 70,000.
So there's no insurance, landlord claims no cash with multiple deteriorating units that she treated like her children or her fingers that she could not dispose of.
She wouldn't cut off her fingers for anything.
Long story short, after several hours of negotiation, I came up with a brainstorm and this was kind of creative.
It was important to bring closure. The singer was besides herself. This had been going on for two or three years.
There was no way the little old lady was going to pay 75,000. She wasn't going to sell her units.
So here's what we came up with. And again, it dealt with the money she had to pay her lawyer to go to trial, which was quickly approaching.
The $10,000 she needed to pay her attorney to prepare for trial, she would now pay to the tenant as part of a stipulated judgment.
Whereby, she owed the tenant another $40,000 for a grand total of $50,000 in nine months. But if the little old lady paid $30,000 within six months, the entire case would be closed and she would be done for $40,000, not 50, not 75, not 100.
I really felt that the landlord could come up with some kind of game plan to find that extra $30,000. And of course, she did.
And if she hadn't, then the judgment would have been entered for an even higher amount, but I won't get into the fine points of the deal.
The deal was such that neither side could refuse and they accepted and it was done and both sides were served in a very positive way.
So I want to end on this positive note.
Litigation, as we know, can be very negative. It is exciting.
But at the end of the day, there's so much more to life than litigating cases to exhaustion.
And in many situations, a settlement is really at the best solution, probably in about 95% of the cases. And by being a mediator, you can make this happen.
You can change the course of people's lives and really make a mark.
I'm not sure as attorneys, we make the same mark on people's lives that we make as mediators.
I want to thank you today for being a part of this program.
And if you follow through with the rest of the Beverly Hills Bar Mediation Certification Program, I know that you will deal with many of the issues and topics that both Lisa and I have spoken of. Thank you.
You may be eligible for CLE credit in your state.
Visit bhba.org slash podcasts for more information.