{"id":1000,"date":"2011-12-26T13:04:05","date_gmt":"2011-12-26T17:04:05","guid":{"rendered":"http:\/\/businessconflictmanagement.com\/blog\/?p=1000"},"modified":"2011-12-26T13:04:05","modified_gmt":"2011-12-26T17:04:05","slug":"laura-kaster-on-impasse-its-the-value-stupid","status":"publish","type":"post","link":"http:\/\/www.businessconflictmanagement.com\/blog\/2011\/12\/laura-kaster-on-impasse-its-the-value-stupid\/","title":{"rendered":"Laura Kaster on Impasse: It's the Value, Stupid!"},"content":{"rendered":"

The second post on Molly Klapper’s book, Definitive Creative Impasse-Breaking Techniques in Mediation<\/a>, focuses on a deceptively simple and profoundly wise short essay by Laura Kaster<\/a>, Addressing Impasse by Helping the Parties Value the Case.<\/em>\u00a0 She opens her piece with a “much overlooked but obvious” point:\u00a0 “Settling or mediating a case is, among other things, a process for agreeing to the value of the claim. … Impasse often occurs precisely because the parties do not agree on the value of the case.”<\/p>\n

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There has been a recent mini-tsunami of empirical studies casting skepticism on attorneys’ ability to make objectively accurate determinations of outcomes of litigated claims.\u00a0 Kaster cites Randall Kiser’s <\/a>much-touted article, Let’s\u00a0Not Make a Deal<\/a><\/em>, for one of its many startling findings: that 61% of plaintiffs made errors in rejecting settlement offers, with a mean\u00a0loss of $42,000; and 24% of defendants made decision errors in rejecting offers, with a mean loss of\u00a0more than $1,000,000.\u00a0 \u00a0<\/p>\n

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So we must assume<\/em> that there’s a high likelihood that the parties to a mediation are misinformed about the objective value of the claim\/defense.\u00a0 What is the mediator to do about it?\u00a0 The client sitting in front of us doesn’t want<\/strong><\/em> to make an error in value assessment.\u00a0 Accuracy is hampered by many barriers beyond the client’s control.\u00a0<\/p>\n

Kaster notes the phenomenon of “groupthink<\/a>,” as well as heuristics such as hindsight bias <\/a>and cognitive dissonance<\/a>.\u00a0 She also notes the “sunk-cost bias<\/a>” that prompts litigants (and their advisors)\u00a0to throw more money and effort into an endeavor on which they have already invested.\u00a0 All of these conclusions are made in good faith.\u00a0 None of these distortions is a choice — they come with the territory.<\/p>\n

Techniques to wrestle with this challenge?\u00a0 First, ask the client to work out a risk-assessment protocol.\u00a0 That is, encourage the client to be explicit with respect to the assumptions and calculations that underlie the value decision.\u00a0<\/p>\n

Second, probe conclusory statements like “We have a very strong case.”\u00a0 A former Chief Litigation Counsel for AT&T, Kaster is accustomed to encouraging the most straightforward calculations of risk for the benefit of business clients:<\/p>\n

What is the likelihood of success at trial?<\/p>\n

\u00a0Slam Dunk.<\/p>\n

But what is the percentage likelihood?<\/p>\n

80%.<\/p>\n

And will the other side appeal?<\/p>\n

Certainly.<\/p>\n

What is the likelihood of success on appeal?<\/p>\n

Slam dunk.\u00a0 80%.<\/p>\n

So you have a 64% chance of winning, subject to further reduction by costs of experts, court reports, trial exhibits, attorney fees, etc.<\/p><\/blockquote>\n

Being prepared to do the math, and being aware of the cognitive, unintended\u00a0and unconscious influences on decision-making, enables a mediator to help a party to come to a closer estimate of the value of a case, and may help to lower the instances of decisional error by the parties and their lawyer.<\/p>\n","protected":false},"excerpt":{"rendered":"

Molly Klapper’s book on Impasse-Breaking Techniques features a refreshingly straightforward essay by Laura Kaster reminding us that the core of impasse is counsel’s disagreement on the value of a case.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,37],"tags":[15,31],"class_list":["post-1000","post","type-post","status-publish","format-standard","hentry","category-mediation","category-negotiation","tag-mediation","tag-negotiation"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/posts\/1000","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/comments?post=1000"}],"version-history":[{"count":0,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/posts\/1000\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/media?parent=1000"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/categories?post=1000"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/tags?post=1000"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}