4 min read

Mediation Tip: Sharing Settlement Authority

If you are a parent, I am sure you have either used or heard the phrase that sharing is caring. The funny thing is that sharing can also apply to mediation and your mediator. Let me explain.

Mediation Can Benefit from Direction

Imagine showing up in a computer store and observing a customer who has no idea how much money to spend on a computer and a salesperson who will not reveal the prices of the computers. Would you expect there to be a sale under those circumstances?

Here is another example. Ever try to go somewhere new without directions? Do you just hop in your car and hope for the best? Of course not! If you did, it would be a long, confusing, and frustrating experience.

But often that is what happens at mediation. Neither party will truly use the mediator as a mediator. By that I mean, involving the mediator as an active participant in the journey and sharing your ultimate settlement authority for where you intend to go.

A Typical Directionless Mediation

What results from lawyers and parties not sharing their ultimate settlement authority with the mediator? You have the same situation as driving without directions, you are in for a long, confusing, and frustrating experience.

Each party anchors their initial position with high demands and low offers. Each side feels insulted by the initial anchored positions and we can spend a long time getting back on track. From there, the process becomes a long and often endless exchange of small incremental offers until patience runs dry. Settlement brackets eventually get thrown out, and each side, including the mediator, has no idea where the mediation is going. Does this sound familiar?

Default Mediation Advocacy

Why do many mediations follow this same tired path of frustration?

First, it is a habit and apparently a time-honored tradition that most lawyers and parties are familiar with.

Second, many lawyers and parties come into mediation with a litigation mindset. A litigation mindset can include any or all of the following: extreme confidence or overconfidence; distrust and skepticism of the other side; a zero-sum I win-you-lose view; and a willingness to roll the dice and see what happens at trial. Often a litigation mindset will lead to a poker mentality for not showing any cards and an unwillingness to share information at mediation.

Do you notice the similarity between gambling and how mediation is often played? I would suggest that mediation can be played differently which would make it more efficient and effective. We can do better.

Trust Your Mediator and Share Settlement Authority

The prime directive for an ethical mediator is to protect the mediation process. That simply means that a mediator's sole responsibility is to ensure the parties are informed, that confidentiality is maintained, and they are utilizing self-determination to resolve their disputes.

Notice that I did not mention that a mediator's goal is to settle cases, although that would be a wonderful outcome. Rather, a mediator must utilize the confidential information shared by both sides to see if there is a pathway to resolving the case and generate creative solutions to do so when necessary. If that information and settlement authority is not shared, a mediator is working in the dark and without direction.

Conversely, if you place trust in your mediator and share your settlement authority you are now giving direction to the mediator and the mediation. The mediator is no longer in the dark and is armed with valuable information and tools to do the real work at mediation.

Armed with each side's settlement authority, a mediator can efficiently gauge whether a settlement is possible and save everyone a lot of time. Comparing the settlement authority from each side, a mediator can first determine if there is an overlap between the offers which means settlement, or if the parties are sufficiently close for a realistic resolution.

How to Share Settlement Authority

In the ideal world, both sides would share their ultimate settlement authority with the mediator very early during the mediation. This would compress the time of the mediation to a negotiation concerning the interests of the parties and not their positions.

At the very least, early on, lawyers and parties should trust the mediator with settlement authority at or near the edge of their ultimate settlement authority if they want to leave some room to make a deal at the end. Another option would be to at least indicate a range for settlement authority so the mediator has a sense as to where this might be going. In both cases, if done early on, you are giving direction to the mediation so that the process is more efficient than a typical directionless mediation.

Trust is key here. Lose the litigation mindset of distrust and skepticism. Trust the process. Do you believe that your mediator is ethical and has no agenda to serve one party over the other? In that case, an ethical mediator is charged with getting the best deal for both parties but the mediator cannot do that if the information is not shared. If you do not trust the mediator, then I would simply ask you why did you hire the mediator in the first place?

The Takeaway

Mediation does not need to be a directionless, time-consuming, or frustrating experience. To bring it full circle, remember that sharing is caring, and it is also contagious. If you share your ultimate settlement authority with me, know that I will advise the other side that I know your authority without revealing it and encourage them to do the same so we can be efficient and explore a resolution that works for both parties. Someone has to go first and trust the process. In most instances, the other side will reciprocate and we can get on to doing good work.

Less conflict, more resolution.