Ten Tips for Busting Impasse in Mediation
Ultimately, mediation is an exercise in breaking through impasse — a period during which the parties have lost hope that they can resolve the matter on that day and in that place. Impasse isn’t the end of negotiation; it’s actually the beginning of the end, the starting point for the negotiation process. Your job is to keep the parties at the table and get them to start talking again.
Harnessing the Power of Bracketing
Bracketing allows the parties to test the waters without dropping an anchor there. Without asking the parties to reveal their bottom lines, ask each party the question, “If your opponent came down to $X, would you come up to $Y?” Bracketing enables the parties to play with hypothetical numbers in order to narrow the distance separating their positions without having to make a concession.
Narrowing the gap with hypothetical offers and counteroffers allows the parties greater room to maneuver and also permits them to save face if their “last and final” offer or counteroffer is just another bargaining position.
Using or Avoiding Mediator’s Proposals
Mediators are often called upon to act as judge and jury by presenting a mediator’s proposal — an objective, third-party opinion of what would be a fair solution or what the mediator believes each party would accept, however reluctantly. A mediator’s proposal is often useful in the following scenarios:
The parties insist on a mediator’s proposal.
A party needs to answer to a hidden stakeholder and is more inclined to agree to a deal if he can explain that the mediator made a final proposal that he couldn’t, in good faith, refuse.
A party needs an authority figure to all but order him to compromise.
Making the Agreement Contingent upon Future Conditions
Making an agreement contingent upon future conditions is often useful if impasse is due to one of the following:
A party exaggerates the future value or cost of something to gain an advantage in negotiation.
One party believes the future will be more profitable than the other party believes it will be and wants to use the higher projection to calculate the settlement.
Drafting a High-Low Agreement
A high-low agreement is a form of settlement agreement in which the case continues toward traditional resolution through trial or arbitration but the parties agree that, whatever the outcome of the proceedings, the plaintiff will recover at least $X and the defendant will pay no more than $Y.
Under this arrangement, the plaintiff is certain to recover at least the number at the low end of the range, and the defendant caps his losses at a number he can deal with. A high-low agreement makes sense when the plaintiff, the defendant, or both need to avoid an extreme verdict.
Engaging in Baseball Arbitration
In baseball arbitration, each party submits a proposed settlement that she deems is fair, and the parties agree in advance that they’ll abide by whichever proposal the mediator chooses. Then, the mediator does one of the following:
Chooses the proposal she thinks is fairest.
Without looking at the parties’ proposals, presents her own proposal and then chooses the party’s proposal that’s closest to hers. (This is sometimes referred to as nighttime baseball arbitration.)
Calming Future Fears with Stipulated Judgments and Hammer Clauses
A party who doesn’t trust the other party to follow through on the mediated agreement is often reluctant to sign off on it. In situations like these, a stipulated judgment with a hammer clause may provide the assurance the person needs to commit to the deal:
Stipulated judgment: A stipulated judgment is based on the parties’ agreement that a judgment can be entered against the defendant if he fails to deliver on his end of the deal. In other words, if the defendant defaults, all the plaintiff has to do is prove nonpayment.
Hammer clause: A hammer clause applies a penalty for default. For example, if a party fails to deliver on a promise to pay a certain sum of money over a specified period, he must pay a certain amount more than the agreed-upon total settlement amount.
Transforming a Dispute into a Business Opportunity
Parties in dispute often have more than just money to bargain with. They have opportunities, skills, connections, possessions, and other assets. During a mediation, get to know the parties personally and professionally and encourage them to get to know each other better. Engage them in small talk to identify their needs and everything of value they can bring to the table.
Then look for ways to match the assets of one party with the needs of the other. Generating such options can melt impasse over hard, bottom-line, dollar and legal-position conflicts and transform a distributive negotiation session (“what I lose, you win, and what you lose, I win”) into a business opportunity that leaves both parties better off than they’d be if they were to win at trial.
Making Money Talk
Dollar values that appear to be objective carry subjective meanings that are useful in helping the parties understand each other’s position. When you ask the parties what they intend to do with the money or why paying it is so painful, you identify practical and emotional reasons that the parties have reached impasse.
Some people see a money payout as an apology or a way to exact revenge. Others have specific uses for the money, such as getting job training and education, buying something they’ve always wanted but could never afford, or providing security for the future. Knowing that the plaintiff’s monetary demand has a rational basis can often break impasse, as can suggestions to achieve the same goal with nonmonetary means.
Resolving Justice Issues
Beneath every monetary demand for a perceived wrong is a justice issue — a reason why the party believes she has been treated unfairly. A dispute is rarely just about the money. In fact, if you don’t help the parties identify the underlying justice issues, no amount of money may be able to resolve the dispute.
Strategically Using Apologies
Many disputes can be resolved with a sincere apology. If you feel that one party is stuck because he really needs and probably deserves an apology from the other party, consider raising the issue in separate caucus and coaching the party who needs to apologize on how to apologize effectively.