How can lawyers help themselves settle a case in mediation even in the face of a large gap between initial negotiating positions? By working with their clients to come to the mediation with a "tool box" containing objective standards that the mediator can use to help the parties resolve the case. Given data, documents and precedents to work with, the mediator is in a better position to facilitate a settlement acceptable to both sides.
By Ruth D. Raisfeld|December 11, 2003 at 12:00 AM
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It is widely estimated that 90 percent to 95 percent of cases settle before trial, but generally after long, expensive, and frustrating motion practice, discovery and court appearances. With civil dockets growing and agencies and courts facing budget constraints, the pressure on parties to settle has resulted in more tribunals ordering mediation, and more litigants opting for mediation voluntarily. To make it a more effective process, litigators need to prepare as thoroughly for mediation as they do for litigation. In their ground-breaking book on negotiations, “Getting to Yes,” authors Roger Fisher and William Ury of the Harvard Negotiation Project posit that to conduct an effective negotiation, a negotiator should “insist that the result be based on some objective standard.” [FOOTNOTE 1] This important negotiating tool is often left back at the office when lawyers participate in a court-annexed or privately arranged mediation. How can lawyers help themselves to settle a case in mediation even in the face of a large gap between initial negotiating positions? By working with their clients to come to the mediation with a “tool box” containing objective standards that the mediator can use to assist the parties to enter a “settlement zone” that may result in resolution of the case. Given data, documents and precedents to work with, the mediator is in a better position to facilitate a settlement acceptable to both sides. The goal in mediation is not to “win,” but to come to an agreement that both sides can live with. Generally, a case will settle when both sides make the same estimate of the value of the case, which is a function of the likelihood that the plaintiff will prevail, the amount of the potential award and the costs of litigation. Of course, getting parties to the same settlement zone depends upon a host of psychological and emotional factors. Mediation can be effective in reducing the potency of these subjective issues if counsel come to the mediation having marshaled the available evidence and applicable precedent beforehand. This kind of preparation can move the parties from subjective and irrational positions to an objectively fair and rational agreement. As Fisher and Ury state: “No negotiation is likely to be efficient or amicable if you pit your will against theirs, and either you have to back down or they do. � [T]he solution is to negotiate on some basis independent of the will of either side — that is, on the basis of objective criteria.” [FOOTNOTE 2]THE PSYCHOLOGICAL FACTORS Regardless of whether the parties enter mediation by order or consent, counsel should not depend on their sheer conviction that they have a strong case, that the law is on their side, and that a judge or jury will vindicate their position. Preparation of objective standards prior to the mediation can temper the impact of traditional negotiating postures. Individual negotiating styles fall somewhere between the “Gladiator” and the “Cave Man.” The Gladiator takes a rigid “I win, you lose” approach, using anger, aggression and intransigence to dominate the negotiation. If both sides are Gladiators, the mediation will look more like sparring at a deposition than a true attempt to reach agreement. At the other extreme is the Cave Man, who is nervous about his case, fears going to trial, and literally “caves in,” taking less than he deserves just to be done with the discomfort of negotiation. These traditional negotiating postures reflect a variety of psychological tendencies that are at play in litigation settlement discussions. For example, decision-making analysts have identified a psychological phenomenon known as “reactive devaluation,” which refers to people’s tendency to assess and respond to offers and counter-proposals differently depending on the source of the suggestion. In other words, the mere fact that an offer or a particular proposal emanates from an adversary causes the receiving party to distrust the proposal, discount it and reject it. However, if the very same proposal is linked to an objective standard, originates with an outside expert or is conveyed by a mediator, it can evoke an entirely different response by the parties to the negotiation. Another psychological element at play in negotiations is the tendency of advocates to view the strengths and weaknesses of the case they are handling through “rose-colored glasses.” Empirical studies demonstrate that individuals tend to make economic decisions based on “delusional optimism rather than on a rational weighting of gains, losses and probabilities.” [FOOTNOTE 3] To counter-balance this overly optimistic approach, business strategists recommend that decision-makers use an objective forecasting method that incorporates an “outside view” that examines the outcomes and experiences of similar cases or analogous projects. This evaluative process yields a much more realistic or accurate estimate of probable results than one focusing only on the case at hand. These studies appear particularly relevant to decision-making in the context of litigation. Trial lawyers are typically (and necessarily) self-confident, convinced that to win, “all they need to do is get before a jury.” However, before getting to the jury, there are many uncertainties: establishing liability (or a defense), ability to prove damages, costs of litigation, attorneys’ fees, success of motions, time to trial, judicial temperament, composition and behavior of juries, and outcomes of appeals. Any lawyer who has ever attempted to prepare a budget at the beginning of a case is familiar with the difficulty of predicting any of these eventualities. Therefore, litigators intending to conduct a successful mediation would be well served to evaluate the uncertainties of litigation by reviewing similar cases in similar jurisdictions. Using the data generated by this “outside review” as a basis of comparison should yield a more accurate assessment of the value of a case than an assessment based solely on the advocate’s and client’s overly optimistic hopes for victory. A lawyer who appears at a mediation with concrete and focused settlement demands based on data obtained regarding similar cases will be better prepared to disarm the adversary who may exaggerate the merits of his case and the probability of success. Effective use of this information by the mediator can help to minimize the “grandstanding” about the value of the case. Finally, individuals negotiating under uncertain conditions make subconscious assumptions that have an impact on their decision-making. [FOOTNOTE 4] These assumptions include the individual’s tendency to discover, retain and process information in a self-serving manner. Thus, litigants tend to seek information that confirms their pre-existing beliefs, to ignore information that contradicts their point of view and to “anchor” their estimates on conspicuous numbers rather than empirically sound data. For example, plaintiffs in personal injury cases will have great difficulty distinguishing their case from huge jury verdicts against the tobacco companies. Sexual harassment plaintiffs will invariably recall the notorious cases of Monica Lewinsky, Paula Jones and Anita Hill. A consequence of “anchoring” on available information is the inaccurate assessment of the value of one’s own case and the probability of success on the merits. Advocates who are proponents of mediation know that a mediator can provide the needed “reality check” to impress on their clients the differences between their case and those reported in the media and the tabloids. However, it is counsel’s role to furnish the mediator with the factual tools that will help the mediator paint a more realistic picture. In sum, in light of the psychological factors involved in negotiating, settlement proposals based on objective standards are likely to be more acceptable to an adversary than those that are arbitrarily derived. Further, using standards will make it easier for the other side to “back-off” of initial extreme demands. Finally, a settlement proposal backed up by reference to objective standards or evidence is usually more persuasive than proposals based solely on emotions. Thus, when preparing for a mediation, advocates should consider forms of objective criteria that will help to answer the following questions:
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