Reconciliation and fractured relationships

It is often a disappointment to me that reconciliation rarely happens in commercial mediation. One of the benefits that we tend to identify when we are marketing mediation is the possibility of restoring fractured relationships, but it rarely happens in my experience. Perhaps it does afterwards, without my knowledge. Perhaps settling a dispute enables the parties to settle and start to see each other as human beings again.

Anyway, I had a mediation a few weeks ago where the parties were reconciled – or at least the process started as the mediation ended. It was a dispute between a mother and her two sons over her estate, which she had signed over to them, but now wanted back. The sons were concerned that their mother had been subjected to outside influence, causing her to change her mind. It promised to be a harrowing mediation but in fact it was sorted with good grace and the mother and her two sons went into a room alone for a little while, when the settlement had been agreed and signed, and came out smiling. That made me smile too!

We are in the business of making people’s lives better.

The important of negotiation skills

Chartered Institute of Arbitrators

Chartered Institute of Arbitrators

Published in the latest issue of the CIArb e-solver:

David Richbell FCIArb

David Richbell FCIArb

Shaping the deal

Parties need deals with dignity, where they leave the negotiation with heads high and believing they have worked hard to get the best deal.

Mediation is an assisted negotiation, so negotiation skills are vital for an effective commercial mediator. In fact, one could argue that it should be one of the key competencies for assessing newly-trained mediators.

Not only is it important for the mediator to understand negotiation tactics (and sometimes how to counter them) but it is also a key skill to know when to give information, when to hold it and when to re-frame it. So the mediator can have a huge influence in when a negotiation starts, how it develops and how it ends.

Some mediators head straight for the figures in a commercial mediation. Indeed, some lawyers suggest that all the ‘touchy-feely’ stuff is dispensed with and figures are tabled at the start. (Incidentally, ‘touchy-feely’ is now called ‘emotional intelligence’ which is slightly less insulting to us tactile human beings). In general, I try to put off going to figures until the shape of the deal is known. If a party sees their needs being met in the emerging deal, they are far more likely to pitch figures in the reasonable zone.

Pepperdine University has developed an analysis of negotiation styles and produced a chart which categorises offers in negotiation zones as:

  • ‘insult’ – where offers are derisory and calculated to encourage a walk-out
  • ‘extreme’ – which is not much better than the insult zone but less likely to cause a walk-out
  • ‘credible’ – sending a message that you are going to have to work very hard to get a deal but we are here to do a deal
  • ‘reasonable’ – the ZOPA (zone of probable agreement) where the offer encourages co-operative participation in the negotiation. Shared problem, shared solution.

The mediator’s aim must be to get first offers pitched in the reasonable zone, or failing that, at least in the credible zone. Outside that and there are problems!

So I try to delay offers until parties see the deal shaping up, see their needs being met and the chance of their misery ending. Then they are likely to pitch offers in the reasonable zone because they do not want to lose the change of a deal to which they can say ‘yes’.

Of course, some people are poor negotiators. Usually they don’t realise it and often consider that they are really good. Many times I have been tempted to give them my business card and say ‘I run a really good negotiation course … you should be on it!’ There is no doubt in my mind that the best deals arise from parties co-operating, but I accept that it can be counter intuitive to the more natural Western style of negotiation, which is adversarial and based upon a ‘winner’ and a ‘loser’. In my view two of the worst cases of inappropriate negotiation tactics are:

  • Salami-slicing (or peeling the onion) – offering little and slowly. This is most likely if the mediator goes to the figures too early and is based on the premise that the more extreme you start the better chance there is of getting a ‘win’. Of course the other side are likely to reciprocate, so the negotiations start at the extreme and grindingly head towards the middle. In such cases parties often say, when faced with the reality of having to make a deal in the reasonable zone (which is rarely in the middle) ‘we’ve moved far more than the other side’. My reaction is not to say ‘but you started in a much more inflated position’ (tempting though that may be!). Instead, my reaction is to say ‘it’s not where you start but where you end that is important’.
  • First/last offer – where a party tables a figure with the message ‘you know this is reasonable so just accept it and we can all go home’. No matter how reasonable the offer may be, parties will still feel that they have been deprived of a negotiation and that the other side are bullying them into a deal. Parties need deals with dignity, where they leave the negotiation with heads high and believing they have worked hard to get the best deal.

So, in conclusion: establish the parties needs first, shape the deal around them, and then go to the figures (and other detail) when the shape is known.

Be an effective Commercial Mediator

There are essential skills needed to be an effective commercial (or any) mediator. Some skills are natural, instinctive and can be highlighted and polished. Others can be learnt. The result will be people who have a potent force for settling disputes and even for reconciliation – and the world needs lots of such people!

An effective mediator must be a good:

  • Manager – orchestrating the day in the most efficient and effective way, helping the parties make the best of the opportunity and getting the best deal as a result;

the mediator needs to be seen to be ‘in control’, a firm manager of the process; a safe pair of hands who will deal with sensitive issues; efficient; purposeful; even-handed, independent; constantly optimistic; energetic..

  • Communicator – bringing clarity to an often confused and deadlocked situation and helping parties to speak with each other in a safe and nonthreatening environment;

The style and method of questioning, the ability to challenge without appearing to be partial, of being deeply interested without being inquisitorial, and of re framing negative or adversarial statements into positive, more conciliatory words, can be a key to helping the parties to move on.

  • Negotiator – Using the information provided in the best and most positive way and helping parties to shape and settle the best deal possible that is realistic and that will stick;

The mediator is in an incredibly powerful position in a mediation. They are likely to know more about each party’s true position – their underlying interests and needs – than either party and so have insights into how to influence the process to obtain the best deal for everyone.

  • ‘friend’ – building relationships of trust with the parties and their advisers through giving time, carefully listening to their story and understanding their emotions, so that they will share sensitive information and know that it will not be used to their disadvantage.

the mediator is a ‘friend’ to all. Rapport can be built in different ways, but the purpose must always be to create a relationship of trust and respect.


Silence is a very powerful tool for the mediator. It is, perhaps, difficult to use……but real gems can result if the mediator has the confidence to wait. People feel the need to fill the silence and will often say something that is quite revealing because it has not been rehearsed. Not least when they have just been very emotional.

Taken from How to Master Commercial Mediation (Chp2, pg15)

“Incontrovertibly the most important book on mediation published in English in recent years (possibly EVER?)” Hew Dundas, Former President of the Chartered Institute of Arbitrators

A route map to a deal – Settlement at Mediation

I did a mediation last week that settled by 2.30 pm! It was quite a significant claim and counterclaim but both parties were up for it and were sensible in their negotiations.

Of course this is unusual – the time, I mean, not sensible negotiations! Long gone are the days when it was considered to be ‘manly’ to be mediating in the early hours of the morning.

Most of my mediations do not finish in normal working hours – in fact I say at the start, after checking if anyone has any time constraints, “I’m here as long as you want me but I’m on overtime from 6pm. It’s amazing how that seems to focus the mind!

On rare occasions I might even say “Ok, so let’s assume you are signing a settlement agreement at 6pm, you need to be shaking hands at 4pm which means you need to be in serious negotiations by 2pm. So you have from now until 2pm too get all the detail/rubbish out of the way”.

the art of negotiating

Some people like a route map to a deal and on more than one occasion a party has said “it’s 2pm – we should be in serious negotiations!!”. And they started to negotiate seriously!

Turn assumptions into facts

It is inevitable that parties enter negotiation, whether in mediation or otherwise, making assumptions about the other sides’ negotiating position, their needs and drivers.

Unfortunately making assumptions weakens a negotiation position – the more assumptions that are made, the riskier the position.

In mediation the Mediator can be used to turn assumption into fact, and so move your negotiating position to a sounder, factual, base.

Before making an offer or counter-offer why not ask the Mediator to check out your assumptions? After all, his/her role is to help your client (and the other side) get the best deal, so make use of their unique position to turn your assumptions into facts.

Mediation is the only way to Justice

Where I come from

I want to first put what I am about to say into context: where I am coming from. I grew up in the construction industry; it is in my blood. My training ground was with contractors before I then became a chartered quantity surveyor and ran my own practice for 18 years. I love construction; I feel as if I am back home when socialising with contractors and other construction professionals. When Chris, my wife (who is an artist), and I took our children for walks she would be pointing out the flowers but I would be pointing out the chimneys. My children are experts on the styles, function and age of Northamptonshire chimney pots!

During my time as a quantity surveyor I experienced many disputes (most of which I had not caused). Most went to arbitration, some to court: adjudication was not so popular at that time. Without exception it was a painful experience – and that was just for me! The outcome was always unjust because one party won outright, the other lost outright. ‘Unjust’ because life is not like that, particularly life in the construction industry which is weather-sensitive and subject to human error. It is never a black/white, total win/lose situation. People see the same facts and events through different eyes, and that is for a whole lot of reasons – education, culture, age, gender, politics, life outlook and so on – and it does not necessarily mean that they are any more right or wrong: just different.

An adjudicative process (court, arbitration, adjudication) cannot take that into account: someone has to win, and the other to lose. Different ‘truths’ are not allowed and that just is not fair. That is why I wrote Mediation of Construction Disputes which was published in 2008. Mediation can take all of that into account. Settlements can be reached any where along the spectrum of possibility from total win to total lose. All that it needs is for the parties (all the parties) to say ‘Yes’ and, once written up and signed, the deed is done and is binding. What is more, mediation can enable settlements that go far beyond the limited powers of the court (money and/or injunction but not much else). I have mediated cases that have agreed stage payments/deferred payments/discounts on future business; that have ended as joint-ventures, one even as a merger; many have resulted in a ‘drop hands’ where the parties have taken the opportunity that mediation provides to get off the litigation/arbitration treadmill and get on with life. None of that could have happened in an adjudicated process. The deal is whatever the parties agree, so long as it is legal. And they usually agree in a day – which makes mediation not only the just way to resolve disputes but also the quickest and most costeffective way. And most do settle on the day (between 75% and 85%). All of which provides a great opportunity for the advisors (solicitors, experts and so on) to have a satisfied client – and therefore the opportunity for further business. Not something that easily comes from arbitration or litigation. Indeed, many of my mediations end with the parties (and their advisors) having a drink together, and sometimes even planning future business together. A colleague tells me that one of his ended with a marriage proposal (not to him though!)

Mediation overview

Mediation is an assisted negotiation where an independent third-party (the mediator) helps the parties reach a (their) solution in private. It is non-binding until reduced to writing and signed by the parties. It is therefore party- focussed, the lawyers and others are there in support, and the mediator manages the process. Indeed, I always say at the start of a mediation, ‘I am here to give you the best shot at doing a deal’. I sometimes also say (perhaps under my breath) ‘and if you foul up the opportunity that’s your problem’. Many people, lawyers included, do foul up but they still get deals – they just get there the hard way. The best way is for the parties, and their advisors, to see this as a joint problem and to co-operate jointly to find the solution. So, principled (needs-based) negotiation is more effective than positional (rights- based) negotiation. Better deals come from co-operating than from fighting. That is a challenge to those whose role in life is about winning. I will outline briefly what happens in a mediation. Most of my appointments are direct. Some come through In Place of Strife, which is the second largest provider of mediators behind the Centre for Effective Dispute Resolution (CEDR). Either way, I am usually asked what dates I have free. The same question may be asked of a couple of other mediators. I am not usually asked about fee; it is on the website and they will probably have downloaded my fee guide and profile before making contact.

When appointed I will send a confirmatory email covering the date, time, fee, venue and facilities, timetable for exchange of information, the information I need (summary plus key documents) and the name of my assistant (I always have a less experienced mediator with me so that they can get experience before they become lead mediators). I enclose my standard mediation agreement and the assistant’s CV. Confidentiality then applies to any contact from then on. The documents arrive, usually not on the date I specified, and often do not comprise those that I requested. Instead of a summary of key issues and events I often get a copy of the pleadings. Not the same thing. Pleadings are a legal document which sets out the legal interpretation of the dispute. The document I am seeking is 5-10 A4 sheets that summarise the circumstances, the commercial issues, the personalities and (some of) the applicable legal context. It is as much to get the parties to focus on the key issues and to get out of the detail that will have immersed them for a long time, as it is to give me an overview of the dispute. It can be a useful reminder of where it all started and what it is really about, rather than the more complex legal argument that will have taken over. So a few days before the mediation date I will prepare for the mediation by reading (some of) the papers. I do not need piles of time-sheets or invoices; I do not necessarily need detailed expert’s reports (summaries are usually all that I need). All that is necessary is that I have a grasp of what the dispute is about and how the money claims are constructed. I am, after all, there to manage the process, not to have an opinion on the solution. But it is important that I am confident about the key issues and that the parties in turn can feel confident that I am on top of their case. After reading in I will phone the lawyers (sometimes the parties) and have a chat, which will include how I run a mediation, the character and relationships of the key players in the mediation, any special needs (including smoking), costs to date and through trial/arbitration, settlement discussions and offers to date. Sometimes we talk about how the dispute might be settled. These are usually separate calls but sometimes they might be conference calls. For the best outcomes in mediation, preparation by the parties is vital. I will come back to that later. Many do not prepare well, but get deals nonetheless. Many get deals despite bad preparation and bad tactics. Many get deals despite bad mediators! That all tends to show that parties just need the opportunity to bring the dispute to an end and get on with life. Typically, a mediation will go through five phases to reach a conclusion. They may not be immediately recognisable during the mediation but, looking back, a pattern will be seen.

They are:

o Preparing (what happens before the day);

o Opening (the joint session where the parties tell their story);

o Exploring (where the mediator, usually in private meetings, finds what drives the party’s    positions);

o Negotiating (where the shape of the deal becomes clearer);

o Concluding (where the deal is done – or not).

They are all important but, of them all, the preparing (by the parties) and the exploring (by the mediator) are the most important. I will explain why as I take you through a typical mediation day. On the day I will arrive an hour before the start time so that I can familiarise myself with the layout of the venue (toilets, secretarial support, copier, fire exit routes, outside areas etc), set-up of the main room, location of each party’s room refreshment arrangements and if a fire alarm test is due. I will then greet everyone on arrival, see them to their room and let them settle before spending time with them getting the mediation agreement signed and dealing with any queries. I will also spend time encouraging each party to tell their story. This really is an opportunity for them to have their ‘day in court’ – much better than they would get in an actual court. Then we will gather in the main room and, after introductions and after I have laid down the few ground rules, each party (and each member of each party) will say what the key issues are to them, why they feel strongly about them and what is necessary to achieve a settlement. We then have a time of questions and discussion and, when it ceases to be useful, we break into private meetings. This first open meeting could be a couple of hours. There could be any combination of meetings through the rest of the day, including other joint meetings – whatever it takes to move the parties to a settlement as quickly and efficiently as possible. I always put the key decision makers together to seal the deal: it gives them ownership and pretty well guarantees that the settlement will stick.

Mediation in the legal system

Although there is no mandatory mediation in the UK, most courts give a very strong nudge to parties to consider ADR, particularly mediation. They assume that the courts should be the last resort and so mediation, and other forms of ADR, should be ‘first resort’. Indeed the courts are able to sanction costs if a party does not consider mediation or enter into it in good faith. Mind you, I do not know how the judge would decide such an issue if the mediator cannot be called as a witness. Because it is still a (relatively) new process, there is little case law on mediation in the UK. Such as there is has reinforced its position in the accepted UK dispute resolution spectrum. It is no longer ‘alternative dispute resolution’ but ‘accepted dispute resolution’. However, as users get experienced in using the process, there will be more challenges and abuses. One, in 2009, was the Farm Assist case, where the mediator was called to be a witness in a trial that sought to overturn a mediation settlement due to alleged duress by the stronger party. In the end, it was not tested because the party calling the mediator as a witness withdrew the ‘request’, but the judge confirmed that confidentiality in mediation was paramount and could only be breached ‘in the interest of justice’. The fact that the parties may waive confidentiality has no effect if the mediator, who is party to the confidentiality agreement, does not. They can, of course, waive privilege, which does not involve the mediator. Mediation schemes It is worth mentioning mediation schemes. Many courts now have their own scheme for small value claims using salaried staff mediators. Much of their work is over the telephone and the settlement rate is impressively high. In addition, most courts have mediation schemes for medium-value cases Although the settlement rate is lower, there is no doubt that the schemes have provided a public service and significantly reduced court lists. There are many mediation hybrids emerging. The Construction Conciliation Group devised a scheme, for small domestic building disputes that are not covered by Part II of the Housing Grants, Construction and Regeneration Act 1996 (and where therefore there is no right to adjudicate disputes). It gave a fixed time (three, five or eight hours), fixed fee and a fixed outcome. The mediator made a binding decision if the parties could not negotiate a settlement themselves. It is a sort of Med-Adj. Like Med-Arb it is not a particularly satisfactory process as it casts the mediator, who would normally manage the process and build trusting relationships with all the parties, in the role of decision-maker. Parties are likely to be more guarded in the information they give to the mediator and so reduce the chances of a settlement in the mediation. Some arbitrators are reversing the MedArb process and offering Arb-Med, whereby the arbitrator withholds the decision and offers mediation in its place. If the parties do not settle, then the arbitrators award is made. So, after over 20 years, mediation is firmly established in the UK legal system. Current estimates are that there were 9,000 commercial mediations (including schemes) in 2013, but no one really knows. It is an area of research that is now quite urgent. Overseas Much of the world is following suit. Of course, the United States of America and Australia were there before us, and indeed exported the process to the UK, but many would say that the UK, at least until now, has preserved much of its purity where the early users have strayed into more ‘tainted’ uses, or abuse, of mediation. Indeed some Americans who have experienced the UK process have enthusiastically urged that the UK should re-export mediation back to the US to remind practitioners how it should be done! Much of Europe, including the emerging eastern European countries, has adopted mediation as an integral part of their legal system. Indeed the European Directive not only encouraged its adoption but opened the way for mediation to become mandatory, if a country so chooses. However, most have not done so, but lack the bite of the Woolf Reforms that caused its acceptance in the UK. The Netherlands are probably the exception where the use of mediation is common. One problem is that there is no uniformity in the model of mediation being used – some countries use the ‘no caucus’ form, others advocate nothing but private meetings. Many countries, Finland for one, have allowed the judges to take the role of mediator, much to the disappointment of those other commercial mediators who have trained and invested time and money in developing a commercial mediation practice. The level of ‘qualification’ also varies. In Austria a commercial mediator is expected to do something like 300 hours training – in the UK anyone can adopt the title of ‘commercial mediator’, and many have undertaken only two day’s training before being ‘accredited’. But more of that later. Mediation is so suited to cross-border disputes, where the relevant jurisdiction may be contested, or even exist in several countries, and enforcement can be a nightmare. International business is gradually recognising the value of mediation in settling disputes in a global economy. UK mediators are now training others all over the world. CEDR has run many courses in Hong Kong, Pakistan, Nigeria, North Africa, India and mainland China. Commonwealth countries are particularly suited to the UK model because of the common law system. In many, arbitration is a new process and is in direct competition with mediation, whereas it is seen in the UK as a long established form of dispute resolution. Indeed, the Chartered Institute of Arbitrators recently celebrated its ninetieth year.

So mediation is recognised throughout the world and has become established in many countries. The challenge is how this emerging profession might be regulated. The call for regulation In the UK, and in many other countries, there comes a time when a new profession becomes respectable and with it comes the expectation of setting recognised standards and regulating the practitioners. There is a misconception that regulation guarantees standards, whereas there is a danger that it creates mediocrity.

The Civil Mediation Council is currently struggling with this issue. In the past it has set minimum (if not the lowest) standards for the training and accreditation of commercial mediators. Experience has shown that the danger with setting minimum standards is that practitioners no longer aim for the best, only to achieve the standard set. Far better would be to identify aspirational standards that give the ‘gold standard’ and for training and mediator providers to measure performance against them. That is much more likely to enable a profession in search for excellence than the setting of minimum standards. Unfortunately, history indicates that the mediator profession will follow others and not have the courage to aim high. An organisation called the International Mediation Institute (IMI) has created a register of practising mediators with details of each mediator and a ‘rolling’ digest of feedback.

The intention is to provide a worldwide source of commercial mediators that will give confidence to those seeking an effective mediator for their particular dispute. It is still a relatively new venture but deserves support in its aim to be a credible source of reference. The threats A common fear is that mediation will go the way of arbitration and adjudication, both of which started as a quick and cheap way to resolve disputes, but which have now become mired in legality.

My response is that mediation is not a legal process: the mediator’s role is to manage a process that gives the parties their best chance of settling their dispute. It may be a process that is set in the legal arena but it is not in itself a legal process. It is probable, therefore, that mediation will not go the way of legal argument and precedent, but remain what its users need it to be – an assisted commercial negotiation. Of course, the lawyers control mediation in other ways. They are the gatekeepers, the ones who chose the mediator and who decide when, how and if they use mediation. Inevitably, I suppose, they mostly choose lawyer mediators, perhaps because they are the same breed, perhaps because they may identify with the legal arguments, perhaps because they may have a reciprocal arrangement with other lawyer mediators. Enlightened lawyers recognise that mediators with a business background are far more likely to help their (the lawyer’s) clients and to understand the dance of commercial negotiation. But, as a non-lawyer mediator, I would say that would not I?

One threat to mediation as it is properly practised is the rise of evaluative mediation. By ‘evaluative’ I mean mediators (inevitably lawyers and particularly barristers and former judges) who are prepared to express an opinion on the merits of the case and the relevant law. I do not mean by ‘evaluative’ a mediator who is prepared to challenge and question and rigorously reality test a party’s position. Those should be every effective mediator’s basic tools of trade. I suspect that some lawyer mediators resort to expressing an opinion when the mediation get tough or becomes deadlocked. My response is that I, and other non-lawyer mediators, cannot do that (opine on the merits) yet we achieve settlements at least as good, so we must use non- evaluative techniques to get there. That is far better then, than risking the alienation of one or all of the parties – not to mention the potential loss of the independent role rightly expected of the mediator. Whilst I acknowledge that a ‘natural’ mediator can come from any background, I have a real concern that the ascendancy of judge (whether ex- or not) mediators may be bad for the profession. It has happened in Finland, is being established in New South Wales and is on the rise in many countries where mediation has become established. In the UK it is seen more as a retirement interest (and pension booster). There are many problems with this, not least that judges should judge. That is what they have been trained to do and it is the opposite of a facilitative process where the parties decide the outcome. The partys’ attitude is different when a judge is present – even with a judge as an assistant I found the deference and expectation on him very different to others. Perhaps I was jealous!

Mediation is common sense We live in a society where common sense is often hard to find. We have created, or allowed, a blame culture where if something goes wrong, someone is to blame and they have to pay. It is enabled by insurers, fuelled by greed and stoked by lawyers – some lawyers. In that society, mediation is the fresh air of common sense and it is one reason why so many cases settle.

So often, if I ask a party, ‘what is it that you need most to be able to do a deal today?’ they reply, ‘to put an end to the misery’. They had a problem which they could not sort out themselves so, naturally, they went to a lawyer who put the dispute into a legal box and went to battle with the other side. The party became a bystander who had no control of the case except to pay bills and use up huge quantities of time, which could otherwise have been spent in wealth- generation. So, for a day, the parties have the control back of their dispute and they have the say in how it will settle – not something that happens in court.

Can you wonder that I believe mediation is the only route to justice?

Behind every dispute lies a broken relationship

Richbell David 2012I (David) am a red-blooded Commercial Mediator. I get settlements. Indeed I tell the parties “My role is to give you the best chance of getting a deal”. But I try to be nice when I am doing it!

Jane, on the other hand, is nice without trying and tends to give more time to the parties relationships and not necessarily to problem-solving. She still gets results but usually through what she terms as ‘slow mediation’ (in the mode of slow, rather than fast, food).

What we both accept is that we can learn from each other’s style and techniques and we do so by co-mediating together occasionally.

Mediation is a very solitary business and, once we have established ourselves as lead Mediators, it is very rare that we have the privilege of seeing our peers in action. That is one reason why MATA introduced the peer review scheme last year, where one lead Mediator sits in with another lead Mediator and gives honest feedback afterwards. Despite being acknowledged by many Mediators as being very important, so far only a few leads have joined the scheme and I do wonder if that is out of fear about a colleague observing, and commenting on, their performance!

The point of this is that we Mediators are in danger of being isolated, Continue reading