It wasn’t that long ago when the only option for attorneys who reached an impasse in settlement negotiations was to let the jury decide. Fortunately, those days, along with trial by ambush and hide the ball discovery, have become a distant memory for most attorneys. Mediation is now the most common and effective alternative for resolving disputes. Knowing how to win at mediation has become as essential as any trial skill.
Losing To The Virtual Jury
In the context of mediation, the actual jury has now been replaced by a virtual jury. More often than not, the mediator (whose stature is enhanced by the fact that he or she is usually old enough to remember what it was like to try cases-or in the case of retired judges, preside over trials) has become the self-appointed predictor of what this imaginary jury will do. Mediators use this power to influence party perceptions and case valuations.
For example, if you are representing a plaintiff in a trip and fall case, the mediator may conjure up colorful stories from his days in the courtroom where premise liability cases with much better facts than yours, invariably resulted in defense verdicts. As your client’s vision of sugar plums slowly shrivels into prunes and you feel your resolve start to crumble, the mediator will pile on by alluding to reported jury verdicts showing the statistical likelihood of a defense verdict.
While it is always important to consider the mediator’s judgment, it is even more important not to lose sight of the fact that the mediator may not have a clue how your case is actually perceived by the other side.
Move The Ball Down The Field Like Bill Walsh
In order to ensure that you don’t leave money on the table if you are representing the plaintiff or conversely overpay if you represent the defendant, you may want to take a page out of the playbook of legendary coach, Bill Walsh.
In his 10 seasons as the San Francisco 49er's head coach, Bill Walsh’s record was 102-63-1, a .617 winning percentage. In 1993 he was elected to the Pro Football Hall of Fame. One of the things that made Coach Walsh so successful was his strategy of preparing his first several plays before the game. Walsh would run these scripted plays regardless of field conditions or how the defense was aligned.
Applying this technique to mediation, you would carefully consider your settlement range before the mediation, then script a series of descending demands or increasing offers. Your settlement range is the goal line that your “plays” are directed towards. Each move should be justified by a new piece of supporting evidence or argument. Now you are ready to take to the field.
This strategy will help keep your emotions in check and guide you methodically to your goal line. You will be less likely to move precipitously or prematurely when the mediator starts channeling the imaginary jury or tests your resolve with “concerns” about your case. Knowing in advance what your plays are, provides a sense of control and minimizes the danger of getting carried away by your own emotions (fear) or the noise generated by the mediator or opposing counsel.
After you have executed your scripted plays, the case will have either settled within your range or you will have a clear idea what the other side is willing to pay and why. If there is still a sizable gap, you can resort to more traditional negotiation techniques to close the gap or suspend the mediation process to develop more evidence favorable to your position. If you choose the latter approach, suggest that the mediator stay involved by follow up phone conferencing.
There are many things that ensure a successful mediation including a well written brief and timely exchange of information. When combined with this powerful technique, you will dramatically increase your odds of obtaining the best possible settlement for your client.
Star Trek watchers may recall that whenever Captain Kirk, Spock, Bones and the anonymous crew member (who invariably ends up getting killed or deciding to live with the alien civilization) beamed down to investigate activity on a new planet, they were required to adhere to the Prime Directive.
The Prime Directive, Starfleet’s General Order #1, is the most prominent guiding principle of the Federation. The Prime Directive dictates that there can be no interference with the internal development of pre-warp civilizations. It includes any “purposeful efforts to improve or change in any way the natural course of such a society, even if that change is well-intentioned and kept completely secret.” This includes not intervening even though having done so could have prevented injury or death.
The above definition is highly analogous to the proper role of the mediator. It is important to make sure that you choose a mediator that follows the Prime Directive to ensure fairness to all parties. Sometimes, this can be difficult when the mediator sees where the parties have failed to take certain steps that would materially improve their case. At a recent seminar on mediation tactics and pitfalls, one of the attorney participants related that at a recent mediation, the mediator (no doubt well-intentioned) introduced a hitherto unconsidered legal authority in a joint session. Doing so materially altered the “natural course” of the case to the detriment of his client. The mediator’s action violated the Prime Directive and went beyond her role to facilitate communication.
The Prime Directive does not preclude the mediator from providing analytical assistance to the parties by questioning assumptions and considering the strengths and weaknesses of their case, otherwise known as “reality testing.” Indeed, such assistance is often critical and one of the most oft cited reasons for selecting a particular mediator. However, a mediator who gives either side advice on how to improve their case by introducing concepts or strategies that they would not otherwise have considered can distort the process. For example, the parties are too far apart for a first round of mediation to settle the case and the mediator suggests that the plaintiff obtain an MRI or the defendant get a a defense medical examination. Such advice may no doubt be well-intentioned but it potentially creates a disadvantage to the other side that but for the mediator’s involvement, would not have occurred. Even “reality testing” can inadvertently skew the result if it is done in a joint session and a “weakness” raised by the mediator had never occurred to the other side.
"Are we negotiating?" "Always," replies Al Pacino playing the devil in the Devil’s Advocate.
In fact, it is more accurate to say that everything is a potential negotiation. Yet, in many situations, the effort to negotiate is not made. Fear, ignorance or complacency seem to be the usual suspects as to why we would not seek advantage.
As Shakespeare said, “Our doubts are traitors and make us lose the good we oft might win by fearing to attempt.” –Measure For Measure, Act 1.
In a recent New York Times article,"How Low Will They Go," the writer decides to test her long held beliefs, and sets off to negotiate the price of furniture at some high end outlets in NYC. While the writer meets with mixed success, she quickly learns that significant discounts can be had on items that she had reflexively assumed were not negotiable.
The writer expresses some discomfort at first even raising the subject of a price discount but once she learns some techniques, seems to enjoy the process. Not surprisingly, many of the salespeople actually were expecting some haggling.
The article is good as far as it goes but it barely touches on the methods that can be used to successfully negotiate just about anything. As a mediator and litigator conversant with the negotiation process, I have negotiated everything from furniture to hospital bills (a recent $18,000 bill to cast my 8 year old’s broken arm comes to mind) to the occasional night out with the boys.
When negotiating material objects, two techniques that are easy to master are the “flinch” and “nibbling.”
The flinch, which is one of my all time favorites, requires only that you respond to the offer, whether it be the price of a car, the insurance company’s settlement offer or the plaintiff’s demand, with a look of incredulity, then slowly repeat the offer as a question with a tone of utter disbelief. “$50,000?” Then, say nothing and wait for the other side to start making compromising gestures.
Nibbling is where the buyer asks for ostensibly small benefits after the price has been struck such as free delivery, no sales tax etc. The individual concessions are small but when added up can be substantial.
To learn about these and a plethora of additional negotiation and counter-negotiation techniques, one of the best sources I have found is "The Secrets of Power Negotiating", a series of audio recordings by Roger Dawsen that have withstood the test of time and will put you in the driver’s seat the next time you need to negotiate anything from the kid’s allowance to your next multi-million dollar settlement.
A new law is going into effect July 1, 2009 which will dramatically alter the equation for Medicare liens. I will have more to say on this in future posts but suffice to say, this will be a game changer.
In a negotiation context parties, attorneys and claim representatives naturally identify with their positions which can create an us vs. them mentality. It is sometimes hard for plaintiffs to see the decision maker on the other side as a person just trying to do their job in a conscientious manner. Likewise, sometimes the plaintiff and the harm they experienced are marginalized at the expense of trying to pick apart whatever inconsistencies may exist in their case to improve one’s bargaining position and not wanting to show undue sympathy which might be perceived as weakness in the negotiating context.
The mediator can help to put all this into context for a plaintiff who can’t understand why they are being “put on trial” when the other side caused the harm by explaining that it is not about them personally but is part of a negotiation process.
Given the need to maintain one’s game face during a negotiation, it is rare to see genuine sympathy being expressed by the other side.
When such displays do occur, they are memorable. I recently had an opportunity to observe such a display of real empathy from a claim representative who approached the plaintiff in a personal injury matter after the case had settled and let the plaintiff know that she was “in my thoughts.” It was moving to see the claim representative step out of her role and humanize the process by sharing her feelings of empathy.
As a mediator, I suggest in my opening remarks that if and when it becomes appropriate to do so, the parties be open to disclosing evidence that will adversely affect the other side’s case. Unfortunately, I have seen cases settle at mediation where information was held back that could have been used by the mediator to help the other side appreciate a significant risk in not settling. As a result, the party that chose not to use the smoking gun failed to obtain the best settlement for their client.
Attorneys who have tried a number of cases are especially wary of giving up their best impeachment evidence if there is any chance that the case will not settle. The fear that somehow the other side will be able to diffuse the effect of this adverse evidence at trial has some justification but in actuality, this almost never happens.
As long as the parties are within striking distance of a settlement, there is no reason to leave smoking guns holstered. By that point, both sides have usually invested considerable time and psychic capital to get the case into a settlement posture. Opposing counsel is unlikely to pull out when confronted with a piece of evidence that further compromises their case. Often smoking gun evidence goes to the other side’s credibility and this can quickly deflate opposing counsel’s desire to continue fighting, especially if they were misled by their own client.
The best time to reveal smoking gun evidence is after as much as possible has been accomplished with the known facts and arguments. Where trust has been established with the mediator, freely discuss how best to deliver the bad news to the other side. The mediator can help package information for maximum effect.
If the party with the smoking gun can’t bring themselves to disclose the information, consider that often the same effect can be achieved simply by having the mediator inform the other side that she has seen evidence that will likely pose a danger to their case. If the other side knows and trusts the mediator, this will usually suffice to quickly bring expectations into line. Strategically, letting the other side pick the mediator can often work to your advantage for this reason.
Finally, the mediator can test the waters first by posing a hypothetical to the other side such as “If the defendant had information that contradicted x, how would that affect the evaluation of your case?” If opposing counsel acknowledges that x would damage their case, some selective or partial disclosure at that point would be appropriate. In some instances, it may be necessary to agree to make the settlement contingent on letting opposing counsel see the harmful evidence.
Carefully considering when and how to use your smoking gun evidence, will result in smarter negotiations and more favorable outcomes.