Mediation

Relationship Repair? Or Just Show Me the Money?

Mediators are trained to detect subtle opportunities for value-adding integrative outcomes: separating positions from interests, offering out-of-the-box suggestions, and looking for ways that the parties can find mutual benefit.

For me, that ended in an early-career EEOC mediation where the ADA claimant, having been offered every accommodation to her disability, refused to withdraw the claim unless she was paid $600,000 — more than twenty times her salary. 

In mediation, as in life, money talks.  And Dwight Golann has recently reported empirical research backing up that conclusion.

In an article appearing in the Fall 2011 issue of Dispute Resolution Magazine, Golann surveyed some leading mediators and asked whether, in their most recent two commercial cases arising from a significant business relationship, those mediators concluded that the parties had repaired their relationship.  In 17% of the 60 cases reported, the mediator considered the relationship had been repaired, while in 83% it had not been.  And even when the relationship continued it was often a case of “too expensive to get divorced” (such as a dispute over a rent arrearage owed by a business tenant).

Why so low?  Golann  lists a variety of factors that encourage business disputants to stick with their positions and look for the money, not the love.

For one thing, by the time they litigate, it’s too late.  Litigation is itself a signal that the commercial relationship is bankrupt and only damages are left to be determined.  Another factor is the deep well of mistrust that has grown between the parties over years of disputatious behavior, ant that a mere mediation is unlikely to overcome.  Most business disputants have options to continuing the relationship — they can always hire a replacement employee or deal with a different supplier. 

Not only are incentives and rewards for an integrative outcome missing — authority is missing too.  In my experience the “guy with authority” is the guy who can write a check, not the guy who can write up a new contract.   

Golann offers suggestions to mediators who are confronted with money-only negotiations.  But his conclusion?  “Most training does not prepare students well for what they encounter in practice.” 

Well, Dwight, for that matter, does law school?

3 Comments
  1. Thanks, Peter, for continuing to call attention to information that challenges some commonly held assumptions about various approaches to ADR. Readers that are interested in the extent to which integrative bargaining may or may not prove to be a useful approach in various contexts might also be interested in some of the work that has been done by Russell Korobkin, including:

    (a) Korobkin, Russell (2008). “Against Integrative Bargaining.” 58 Case Western Reserve Law Review 1323-42 (a video presentation of this paper can be accessed at: http://youtu.be/dnIKEN_K6Bw); and

    (b) Korobkin, Russell, and Doherty, Joseph (2009). “Who Wins in Settlement Negotiations?” 11 American Law and Economics Review 162-208 (a pdf copy of this article can be accessed at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=998095).

  2. I think you are right. While sometimes there is a creative solution – but these tend to be in situations that are caught fairly early for mediation very often it is about money and a great deal of time could be saved if the mediator faced up to that early on. I have sat in on a couple of mediations recently where the mediators seemed obsessed with getting one side to apologise to the other even though neither party had the slightest interest in an apology – interestingly in netiher case did the mediator even prepare the “guilty” party for an apology by getting them in any way to reflect on how their behaviour might appear to or impact the other person so any apology would be unlikely to come from any new understanding anyway. I wonder if this obsession is a reflection of training coming from HR or family type mediators rather than commercial mediators where mending fences is often of particular importance?

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