Mediation Minute

The Road to Uncovering the Hidden Truth in Mediation

March 12, 2022

If I have reasonably competent lawyers with equally motivated clients with access to the same information (and those are not trivial caveats), isn’t it fair to believe they will be looking at the same playing field albeit from different sides? Isn’t it reasonable to believe the case valuations on both sides should be like two moons within gravitational orbit of one another?

In other words, reasonably competent people can be a good distance apart to start, but at the end of the day intellectual honesty draws them together.

There are two species of intellectual honesty always in play: A party needs be honest with their attorney and themselves. Second, one need be intellectually honest with the other side, and that manifests itself in the form of candor and disclosure of desired information that the other party is seeking or upon which you want them to rely.

If the money gap is large and the exposure and risk analysis in the two rooms is wildly different, we have to ask why are smart people looking at this case so differently? We have to figure out the physics that explains the delta in valuation.

If there is a large gap, I want to know why. I want to dig. I want to poke around a bit. An unresolved dispute looks to me like a zit on the face of reality: I feel the need to pop it.

Here is where the mediator earns their money. Maybe one side really isn’t motivated to settle, and their offers reflect this. That could be feigned or real and, if the latter, then there is a whole lot to deconstruct.

More often, there is an assumption that is flawed or some belief that is due to be challenged, a miscalculation of economic exposure, occasionally a failure to understand the governing law, underestimating the future costs, or some fact or expert report that is not yet disclosed but which one side thinks is important. An impasse is often a function of inadequate disclosures and flawed assumptions flowing from incomplete information.

I search for overlooked facts, a flawed or questionable assumption, or a suspect belief masquerading as fact. Many things might explain why the two moons are not in overlapping orbits.

So, ultimately, I don’t get to a number. The secret sauce for me is getting to a shared consensus about provable facts, agreement on governing law, costs, and exposure including attorneys’ fees. Who wins is a crap shoot.

My role is to flush out the misinformed, the bad math, and the emotional baggage clouding the case. This can come from the lawyer or the client, or both. Occasionally, I have to work around the lawyer for the client to see another truth about how this could end. If I can do that, the pre-existing ranges should change, and the moons start circling more closely.

New information learned at mediation is invariably problematic for the lawyer and their client. It might cause the recipient to wonder whether their lawyer sees the whole picture and whether their prior advice is solid.

Mediators frequently ask, “Did they know this before today?” because late disclosures create a low-trust environment. Deals are hard to make in a low-trust environment. If you have “killer” information, the information should be disclosed well before mediation to get traction in the other room. A late, high-gravity disclosure creates mistrust, anger, confusion, or other emotions not conducive to settlement.

Time and time again, I get mediation statements that are not shared with the others or shared on the eve of mediation. Woe to the mediator who receives a mediation statement at 7:30 p.m. the night before mediation. Sometimes, I am told facts that one side thinks should influence the other side to settle, but I am told not to disclose “THE BIG SECRET” and the other side only learns this at mediation. This is not good.

The lawyer’s job is three-fold:

  • Manage your client’s expectations.
  • Give the other side one or more reasons to settle now.
  • Help me figure out what is driving the negotiation position in the other room and then articulate some fact, legal position, or flaw in the risk analysis that gives me leverage to blow up (in some measure) the other side’s view of the dispute.

If you don’t disclose the leverage until the day of mediation, it may not play. When I have searched but cannot find any more information to leverage or bad math, and one side or both are “stuck,” then and only then have I done my job as a mediator.

Some theorists might say every case can settle, but I won’t go that far. I can tell you an impasse is often a function of timing. Not that you need more discovery. You don’t. It’s that one or both sides are not being intellectually honest at the time, meaning there can be unspoken things I cannot ferret out that influence their positional bargaining.

One side or both may not be emotionally prepared to end the fighting. But an impasse is not organic, like an occasional weed in the garden of settlement. It is not merely an unpleasant ending. An impasse may come in many ways.

To be sure, it is a manufactured thing, a sculpted and misshapen thing. Its form is occasionally the product of unmotivated mediators or forged with tools inartfully wielded by parties who have mistakenly elected to work in the grey light of self-deception, omission, and secrecy.