In The News

O.C. Lawyer Features Principal David Ezra in Mediation Column

(filed under: In The News | August 1, 2015)

As part of an ongoing series of articles and columns on the Orange County Bar Association ADR section chaired by Berger Kahn Principal Lance LaBelle, a recent column by Berger Kahn Principal Dave Ezra was featured in Orange County Lawyer magazine, “The Mediator’s Nightmare: Am I the Most Unreasonable Party’s Advocate?” Featuring a detailed examination of the conditions in which challenges may arise in mediation and practical and scholarly tips for understanding this issue, Dave says:

“In a sense, the unreasonable party has spent the day “training” the mediator, convincing the mediator that nothing the mediator does or says will significantly influence the highly unreasonable party. The highly unreasonable party has “trained” the mediator to recognize that the only way the mediator is going to settle the case is by pushing very, very hard on the other side — the side that is reasonable and relatively more flexible.”


by David Ezra

Mediation is a great way to resolve disputes. Mediation affords the disputants a confidential setting and an experienced neutral whose only objective is to help them settle. What could go possibly wrong?
Experienced mediators know about a recurring problem that presents itself in varying degrees. While pushing hard to get a settlement, the mediator can’t help but notice that one party won’t budge. Meanwhile, the mediator works on the flexible party, getting them to drop the demand more and more, or increase the offer more and more.
In many ways, this problem comes with the territory. Standards governing mediation seem to universally call on the mediator to allow party self-determination, while remaining impartial. (See, e.g., Cal. Rules Ct., Rules 3.853 and 3.855.) At least in theory, mediators are not concerned with gauging the settlement terms’ fairness. Mediators succeed whenever two parties say “yes.” So there’s a built in incentive to move the party who is most easily moved.
But no mediator wants to feel that they pushed a reasonable party into a fundamentally unfair settlement. A “one-sided” mediation, where the mediator becomes a tool for a very stubborn party and ends up significantly moving the flexible party toward a heavily unbalanced settlement, is undesirable.
The problems go far beyond the mediator’s discomfort. A good mediator’s actual goal is not merely to achieve any agreed settlement. The mediator’s real objective is a lasting settlement that resolves the dispute once and for all. An overly one-sided mediation, where the mediator and a highly unreasonable party “gang up” on a reasonable party, may lead to a temporary “settlement” — one that is particularly likely to unravel. Think about when you bought your car — too often, parties who are “forced” into a one-sided deal quickly develop buyer’s remorse. When the mediator becomes a forceful advocate for a highly unreasonable party, the reasonable party may not be able to articulate it in the heat of the moment, but they may still sense that something went very wrong.
This means that in those (hopefully, very rare) instances where a mediator ends up working extra hard to move a very reasonable party toward a very unreasonable party in order to achieve a settlement, the final result is more likely to be an at-risk, or even temporary, settlement. From the mediator’s perspective, a “settlement” that falls apart is a Pyrrhic victory, if not an abject failure.
No one wants a “settlement” with an enhanced likelihood of unraveling. It is not good for either party. And it is not good for the mediator (or the mediator’s reputation). So what can be done to avoid a one-sided settlement where the mediator ends up aggressively advocating on behalf of a highly unreasonable party? What can be done to prevent the mediator’s natural tendency to achieve a settlement by pushing on the object that is most easily moved?
A word of caution — numbers alone (and the mediator’s own settlement value assessment) — can never tell the whole story. A plaintiff that starts with a high demand and makes big drops is not necessarily being any more reasonable than a defendant who starts very low and creeps up slowly. A defendant who has some small chance of winning a knockout summary judgment motion might be perfectly reasonable in offering very little money. If the defendant can afford to take the risk of losing the summary judgment motion and the plaintiff really can’t, a very low settlement may be better for the plaintiff than rolling the dice on the summary judgment motion, even if everyone thinks there’s a 90% chance of defeating the motion.
These risk-benefit dynamics do not turn a mediator into a weapon one party can use to the other’s detriment. An experienced mediator who knows the dispute’s subject matter (or one who asks the right questions) will usually be able to distinguish between aggressive but reasoned risk-reward calculations, on the one hand, and situations where an unreasonable party is using the mediator as a lethal weapon against a very soft target, on the other.
Judgment calls have to be made in highly nuanced, very complex situations. Typically, the mediator knows less about the case than everyone else who is involved. So a good mediator will not jump to the conclusion that movement by one side, coupled with the other side’s extreme resistance, means that the mediator has become the most unreasonable party’s advocate.
Most mediators start sessions with an open-mind, searching for virtually any path to settlement, and nearly 100% focused on achieving a binding and enduring settlement. The mediator initially has no idea whether any party is going resist movement to an extreme degree. After all, settlements typically require a reasonable degree of flexibility in both directions.
Particularly at the outset, mediators may feel like they are dealing with two very unreasonable parties. Often, all parties start mediation highly positional, overly cautious, and very slow to move. But in most successful mediations, the process ultimately works. Two parties that started with virtually stationary positions in the morning, somehow grow more flexible as the mediation goes on. By the evening, they have often both moved significantly, and settlement happens. When the parties reasonably value the case and demonstrate some degree of negotiating flexibility, a skillful and experienced mediator usually finds a way to settle the case.
But what should mediators do when they become convinced that they are not dealing with acceptable cost-benefit or risk calculations; convinced that an unreasonable party is using the mediator to drive the cost of settlement to unreasonable levels?
To maximize the chance of successfully resolving a dispute where one side has been very reasonable and the other has been just the opposite, a skillful mediator has to maintain awareness throughout the process. When the mediator expects a case to settle somewhere in the $250,000 ballpark, but finds the defendant offering only $7,500 at 6:00 p.m., that’s a sign. And when the plaintiff has dropped their morning $750,000 demand to $225,000 by 6:00 p.m., the mediator knows it is time to start wondering whether pushing the plaintiff further and further down is actually a productive activity.
In a sense, the unreasonable party has spent the day “training” the mediator, convincing the mediator that nothing the mediator does or says will significantly influence the highly unreasonable party. The highly unreasonable party has “trained” the mediator to recognize that the only way the mediator is going to settle the case is by pushing very, very hard on the other side — the side that is reasonable and relatively more flexible.
Most mediation conduct standards call for mediators to “conduct a mediation based on principles of party self-determination.” The parties are to make a “voluntary, uncoerced decision” using “free and informed choices” as to outcome. Mediators applying these standards “shall not undermine party self-determination” for improper reasons, such as “settlement rates, egos, increased fees, or outside pressures . . . .” But others see fairness as a primary mediation objective. For example, standards governing family law mediation have long advocated fairness as a mediation objective.
Unfortunately, the model standards are too general to offer much practical, “real life” guidance. In real mediations, when a mediator starts to feel that things are too one-sided, and that any settlement that might be achieved would be so tilted that its permanency would be doubtful, the mediator needs to mention the elephant in the room.
A mediator could tell the entrenched defendant something like: “Look, we’ve been at this since 8:30 this morning and in ten hours you’ve moved from $2,500 to $7,500. The plaintiffs started at $750,000 and they think this case is worth at least $250,000 (which it just might be) but they would settle this for $225,000 today. We’ve been grinding them down all day. But I am now sensing that more grinding now might be counterproductive. You can get this settled very favorably tonight. But applying more pressure in the other room right now may not be the best way to go.”
Then the mediator assesses the reaction. If the reaction is, “Let’s cut to the chase. I think they’ll take something a little less than $200,000,” then the mediator has probably been dealing with a tough negotiator, but not a party that is wildly unreasonable. On the other hand, if the reaction is, “We could stay here three weeks and the offer would never go to $10,000,” then the mediator knows it might be time to consider alternatives to back and forth negotiating.
In the plaintiff room the mediator might similarly probe, suggesting that the defendant is not moving up to the level they want, and that unless the plaintiffs really need to settle tonight, this case may not be ripe enough to settle yet. The mediator then needs to listen and gauge the reaction. If the plaintiffs react by pushing the mediator to keep the negotiations going, the mediator may have missed something. Maybe the case isn’t as solid as it appears. Maybe that surgery everyone was so sure the plaintiff needed is not going to happen. Maybe the unreasonable party isn’t so unreasonable after all.
If the mediator isn’t talking about the elephant in the room, the attorney for the side the elephant is stepping on, should mention it. Calmly tell the mediator you and your clients are seeing a one-way negotiation that isn’t coming across as fair. Then gauge the mediator’s reaction. The mediator will confirm your perception and work to find a solution, or the mediator will tell you that your case isn’t as strong as you thought it was. Either way, you will have made it harder for the mediator to continue acting as a weapon for the most unreasonable party.
No mediator wants to be a tool for the most unreasonable party. But it occasionally happens. When it does, mediation participants need to call it out.

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