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Getting the most out of your mediator
It is very often worth telephoning your mediator before the mediation day for an introductory discussion. All discussions with your mediator, including this one, are confidential between you (unless you chose to authorise disclosure of any matter).
Head of Dispute Resolution
Creating and claiming value in negotiation and mediation
"Getting to Yes" (Fisher and Ury's seminal negotiation book) argues that "Principled Negotiation", or win-win negotiation, is how you maximise value for all parties in negotiation. We are encouraged to "separate the people from the problem", "focus on interests, not positions." and "invent options for mutual gain". By doing this we avoid the evil outcomes of "distributive" bargaining. It's all about jointly solving problems, cooperating and "creating value".
"Distributive bargaining", on the other hand is playing hardball. Whatever you get, the other side loses. It is win-lose negotiation. The outcome is supposedly sub optimal, often including no agreement through stalemate.
The two styles are often described as "creating" vs. "claiming" negotiation methods. The language around each style already indicates which one we are supposed to prefer…
Some years after "Getting to Yes", a theoretical counterblast came in the form of the "negotiators' dilemma" by Lax and Sebenius. It framed negotiation in the incentive structure of the well-known game theory model: the "prisoners' dilemma". Here the incentives are such that both negotiators will get involved in destructive tactics, even if they would both be better off cooperating – as advised by "Getting to Yes". Of course, there are all sorts of caveats and extensions to prisoners' dilemma, but the broad point rests.
So much for theory. Unfortunately, there isn't a whole lot of empirical support to prove or disprove the thesis that Principled Negotiation results in better negotiation outcomes (please correct me if I'm wrong!). Schneider looked at the perceived effectiveness of lawyers in negotiation by getting a large sample to answer questionnaires. Her research indicated that a negotiator who is assertive and empathetic is perceived as more effective. The study also suggested ineffective negotiators were more likely to be stubborn, arrogant, and egotistical. Third, the study found that problem-solving behaviour is perceived as highly effective. All possibly true, yet this was based on survey perceptions and the actual dollar outcomes are not assessed. As good negotiators know, walking away thinking you have a good deal, is not always a
good indicator of the reality of the situation.
Personally, I think you need both creating skills and claiming skills. In my own work as a mediator, it is undoubtedly the case that if parties can properly flesh out all the issues and understand where the other side (it is usually two sides) is coming from, the greater the chance of success. Most good mediations will typically start with an exploration of the issues, where the other side are coming from, opportunities for mutual gain and so on. This is helpful. However, once the pie has been created, they will also invariably end with haggling and bargaining about who gets how much. Just how vigorous the tactics and approach are in this stage will depend on the inbound structure of the negotiation.
It wouldbe usef ul if there were some solid empirical research on the linkage between structure, style and outcomes in negotiations. Casual empiricism (i.e. my own experience!) suggests there is a clear sequence to most good negotiations: create, then claim.
Mediation - Essential Planning for the Day
As in any field, pre-planning will optimise your chances of success so before any mediation, time spent in preparation will usually be well rewarded. You will want to consider how best to capitalise on the opportunity the mediation offers you to get the settlement you want.
Lies and truth in poker and mediation
Mediation is not like a game of poker, but there can be similarities. In mediation as in poker, people do not always tell the truth. In my experience, bald lies are rare in mediations and different factual accounts are usually the result of failed memories, poor observations or honest differences of opinion - unlike poker. In poker, bluffing is an accepted and indeed essential part of the game. In mediation, though rarer, deception also takes place. It often happens at the outset, when initial bids can be, although not outright lies, what might politely be known as "optimistic". There are very sound strategic reasons for "optimistic" opening bids. First, you might just get lucky and the other side accept your offer (although this would suggest you could have got more). Second, you want to anchor the perceptions of the other side, however, unrealistically, to a higher number. Finally, you want to be able to make concessions later. If you don't leave yourself some wriggle room in your opening bids, then without the ability to make concessions later on you will be breaking that cardinal social norm: reciprocity. Of course, both sides have the same strategic imperatives and, therefore, both sides are likely to bluff somewhat with their opening bids.
But how can you tell when people are bluffing? In poker there is a significant literature on "tells" the physical signs that might reveal deception. These might include whether or not someone is flushed, shaking, how they are breathing, the pitch and tone of their voice, the way they look at or handle chips, their body language, eye contact and so on. Indeed, the revered "poker face" is the classic strategy for avoiding detection. However, away from the world of poker, in study after study, Dr Paul Ekman, a professor of psychology in the School of Medicine at the University of California at San Francisco, and his colleagues have demonstrated that most people perform miserably in tests to detect deception, scoring at chance levels or only slightly higher. Usually the best guide to veracity is history. Looking at what bids your rivals have made before, how have they reacted to your offers and their overall rate of change will give you good information about whether their current bid matches the historic pattern or seems a little odd.
In poker you can always call someone’s bluff, but this will cost you and if you are wrong may be expensive. In mediation, if you feel someone is bluffing, the first best response is to ask for more evidence that can support their position – what mediators call “reality testing”. Your next step will then depend on the strength of the evidence. You have three options. Normally, you will put in a counter offer. The size of your bid will depend on the history of bids to date and your beliefs about their offer. Sometimes, if the other side’s evidence is good, you don’t think there is more room for manoeuvre and their offer is better than what you might expect by going to court, you might accept. Finally, you might decide that their offer is unpalatable, yet you can’t improve your offer, in which case you are off to court or whatever the alternative is to doing a deal.
In poker, bluffing is an accepted facet of play. In mediation on the other hand, if a party is caught out lying, this will usually have very bad implications for the chances of settlement. By all means give yourself wriggle room, but outright deception carries significant risks, especially if your alternatives to settlement are poor.
The flip side of detecting deception is that it is equally important to detect the truth. Lie catchers can sometimes err on the side of distrust, overestimating the frequency of lying and missing instances when the truth is told. In another study, Dr Ekman and his colleagues found that the groups who did best in detecting lies were less effective in identifying truth tellers, scoring not much better than chance, and not significantly better than other groups. To be good in poker and mediation you need to develop skills at detecting both lies and truths.
© Dr John Clark 2012
Refusal to Mediate affects Costs Entitlement
The Court of Appeal, in its February 2011 judgment in the case of Rolf –v- De Guerin has taken the opportunity to reiterate that the conduct of parties during litigation, and in particular a refusal to mediate or attempt other forms of alternative dispute resolution, will have a significant impact on the costs award at the end of a case. The well known 2002 case of Dunnett –v- Railtrack Plc established that a party who refused to mediate, even if successful in litigation, may not be awarded costs. This was clarified somewhat in 2004 in Halsey –v- Milton Keynes NHS Trust which set out the factors which a Court should take into consideration in deciding whether or not a party had unreasonably refused to mitigate. The non-exhaustive list of considerations included whether a case was intrinsically unsuitable for mediation (very few cases would fall into this category), the merits of the case and in particular did a party reasonably believe it had a water-tight case, other attempts to settle, whether costs of mediating would be disproportionate, whether it would case delay to the trial and the prospects of success of the mediation.
Bearing these factors in mind, in Rolf –v- De Guerin, one party's refusal to mediate had a significant impact on the costs recovery following trial. In this dispute which concerned the building of a garage and loft, the householder obtained a judgment for a mere £2,500 against a claim which, at its highest, was put at £92,515. Although the householder, a Mrs Rolf, had thus succeeded in her claim, she in fact recovered a very small proportion of the amount claimed and had failed on a number of her main allegations. Based on these and other factors, in this case costs did not "follow the event" as is common - the trial judge awarded costs to the unsuccessful defendant.
Mrs Rolf appealed to the Court of Appeal. In her favour, she was able to show that she had expressed a genuine willingness to settle and had been prepared to attempt mediation at various stages. The building contractor had rebuffed all these overtures until 6 days before trial which, in the circumstances of this case, was found by the Court of Appeal as having been too late.
The Court of Appeal held that the builder's reasons for refusing mediation did not hold water. His reasons were that by mediating he would have had to accept liability, he felt a key witness for Mrs Rolf had to be seen by a judge at trial and in any event, he wanted his day in Court.
The Court of Appeal held that the spurned offers to enter into settlement negotiations or mediation were unreasonable and found that they "ought to bear materially on the outcome of the Court's discretion". In substitution for the order made by the judge at first instance, the Court of Appeal made "no order as to costs".
WORKPLACE DISPUTES – A DUTY TO MEDIATE?
Mediation is now commonplace in family and commercial disputes. No doubt this is partly because the Courts can insist that the parties try to settle their disputes out of Court but, equally, because mediation works. Mediation in the workplace, however, has taken much longer to become recognised. Why is this?
Between 2004 and 2009, employers and employees had to grapple with the statutory dispute resolution procedures. These were designed to restrict the number of employment disputes that went before Employment Tribunals. Unfortunately, however, the converse was true. The procedures were so complex and the consequences of failing to comply with them were so severe that a whole new set of litigation was spawned to decide what the Regulations actually meant! Thankfully, the statutory procedures were abolished with effect from 6 April 2009.
On 6 April 2009, a new ACAS Code of Practice on Disciplinary and Grievance Procedures came into force. If an employer or employee unreasonably fails to follow the guidance set out in the Code, the Tribunal can increase or reduce, as appropriate, any award it has made by up to 25%.
In the first draft of the Code published by ACAS and sent out for consultation, there was the following sentence: "Employers and employees should do all that they can to resolve disciplinary and grievance issues in the workplace." Many commentators took the view that this would effectively force parties to mediate workplace disputes and, if they unreasonably failed to do so, to suffer the consequences of a 25% increase/decrease in compensation.
It is one of the central tenets of mediation that the process is voluntary – someone coming to mediation because he/she wants to is much more likely to settle the dispute than someone forced to attend.
ACAS reacted to responses to the consultation and the sentence quoted above was omitted from the final version of the Code of Practice. Instead, it has been relegated to the Foreword to the Code of Practice. The relevant part now reads:
"Employers and employees should always seek to resolve disciplinary and grievance issues in the workplace. Where this is not possible, employers and employees should consider using an independent third party to help resolve the problem. The third party need not come from outside the organisation but could be an internal mediator, so long as they are not involved in the disciplinary or grievance issue. In some cases, an external mediator might be appropriate."
The Foreword does not form part of the statutory Code of Practice. Accordingly, failure to comply with it does not have any adverse consequences.
In January 2011, the Coalition Government issued consultation on Resolving Workplace Disputes. The first part of the consultation document deals with mediation. It reads:
"Mediation is a process that delivers a solution developed and agreed by both parties, a "win-win" outcome that benefits parties not only in terms of the direct savings from avoiding the tribunal route, but also in terms of preserving the employment relationship, maintaining productivity, reducing sickness absence and increasing employee engagement."
The consultation closes on 20 April 2011. It is clear that mediation will play an increasingly important role in resolving workplace disputes. The more enlightened employers and lawyers already use mediation in appropriate cases. Lawyers are of course under a duty to act in the best interests of their clients – in my view, the lawyer who fails to suggest and promote workplace mediation in appropriate cases is failing to comply with his/her duty to the client. For anyone who has been involved in workplace mediation, the advantages of mediation over disciplinary/grievance procedures and the litigation that often follows are obvious.
Partner and Head of Employment - Darbys Solicitors LLP
WORKPLACE AND EMPLOYMENT MEDIATION TWO CASE STUDIES
The following two examples of cases mediated by Oxfordshire Mediation mediators demonstrate how mediation can provide a safe, impartial setting in which, with the help of a neutral third party, a resolution can be found to both workplace and employment conflicts.
Workplace mediation tends to involve conflict between two or more employees, rather than being between the employee and the employer. The mediation is mainly about past and future relationships, and it is generally envisaged that the employment relationship will continue once the conflict is resolved.
Employment mediation tends to take on a more commercial character as it generally takes place in the context of a possible or actual Employment Tribunal claim. If agreement is reached it usually takes the form of a Compromise Agreement.
Workplace conflict – If nothing changes, I am going to leave!
In this case two members of a team were experiencing ongoing difficulties and despite the best efforts of the department manager and Human Resources could not find a resolution to the difficulties.
Two employees had been working together for a few years. They were in the same department and reported to the same departmental manager. Jenni had been at the company longer and was senior to Fiona. Fiona had felt under pressure from Jenni since she joined the company. She raised the issue with her departmental manager; however, she felt that nothing had changed. When both parties agreed to mediation they were both accusing the other of bullying and harassment.
Jenni had a no nonsense approach and felt that some aspects of Fiona’s work needed improvement. She had asked for these changes in ways that she felt had been clear and fair. Fiona kept going to management with the allegation of bullying by Jenni.
Fiona felt her work performance had been made subject to very public comment in team meetings and she felt embarrassed and singled out. She felt she could do no right as far as Jenni was concerned. She liked her job. It was close to her home so she was able to take her children to school and pick them up on her way home.
Both parties were thinking about leaving if the situation could not be worked out. They reluctantly agreed to mediation but neither wanted to change jobs.
The mediation allowed both parties to explore where their working relationship was going wrong, and discuss what they both expected from each other. With their new understanding of the other parties’ perspective two agreements were drawn up. The first agreement was confidential to the two parties. In it there were expressions of regret and apology. The second agreement was for circulation to their manager and it set out changes in work practices that they both wanted to see for the future.
Employment dispute - To tribunal or NOT to tribunal!
In this case an employer turned to mediation to resolve an Employment Tribunal claim. The parties reached agreement prior to ET, saving both time and money in legal fees and employer time.
The mediation arose out of David’s allegation of disability discrimination and his claims for civil service injury benefit and ill health retirement. The employer denied the allegations and resisted the claims on the basis that they had made reasonable adjustments to take into account David’s disability and that they had not discriminated against him.
The parties’ previous attempts to discuss the matter had been unsuccessful.
David’s starting point in the mediation was a demand for £860,000. His claim in the Employment Tribunal included compensation for disability discrimination, damages for injury to feelings, aggravated and exemplary damages, interest, costs and compensation for loss of career earnings. The employer started out in the mediation offering £1,000. The employee was supported in the mediation by his union representative, and the employer was advised by an in-house legal team.
The mediation took place over a day and agreement was reached. The mediator assisted the parties think creatively about their needs and interests and the Compromise Agreement that was drawn up at the conclusion of the mediation included a payment to David of £45,000. and various other conditions which opened the way for him to apply for ill health retirement and leave his employment in a dignified fashion. The mediation agreement also addressed the employer’s need to keep the outcome confidential and to terminate the employment relationship on an amicable basis. Both parties were happy with the outcome and were relieved to have averted further costs in time and legal fees.
*Please note these cases have been anonymised and all names have been changed to ensure confidentiality.
FELICITY STEADMAN AND TINA SUVAJAC – LEES
OXFORD MEDIATION MEDIATORS
THE COST OF CONFLICT
Conflict can have both positive and negative effects within the workplace. According to Tuckman’s model of group development (1965) there are four stages that groups go through. These stages are forming, storming, norming and performing. These stages are cyclical and groups may go through each phase upon the start of a new staff member, organisational change, or when systems are not working. It is often when the transition to performing does not take place in which there may be negative consequences on the organisation and individuals involved.
When groups, colleagues, and individuals remain in the ‘storming’ phase, the degree of conflict can vary. However, the longer the conflict goes on the more it will escalate. When a conflict escalates so does the cost in terms of money, time and employee satisfaction and performance.
In the Employment Rights at work – Survey of Employees 2005 (DTI), 42% of respondents reported a problem at work in the last 5 years.
The cost of conflict can vary in every organisation, however, the more a conflict escalates without intervention the more the following may be seen:
Excessive employee turnover
Delayed or missed deadlines
Damaged management credibility
Lack of trust
Increased levels of stress
Increased levels of sickness absence
For every organisation the quantifiable cost of the above conditions will be different however, it is important to utilise early warning signs of conflict to create positive changes.
It is estimated that the average cost for an employer defending a Tribunal claim is £9000.00 . This figure does not take into account any previous grievances and any amounts that may be awarded to the employee.
The costs may be seen in other ways such as sickness absence of the individual and others within the team or department. In some organisations formal mechanisms such as grievance and disciplinary procedures are often very stressful for the individuals involved, causing some employees to be signed off work by their general practitioner.
The cost of hiring may also be a factor in unresolved conflict. In some cases individuals may weigh up the personal costs of workplace conflict.
Managing workplace conflict can become very time consuming. As conflict escalates so does the time that is required by those directly involved as well as Human Resources specialists, Legal Representatives, Union Representatives, and management. The CIPD Survey (2007) suggests that each grievance case takes an average of 9 days of management and Human Resources time.
In March 2007, a report entitled Better Dispute Resolution: A review of employment dispute resolution in Great Britain addressed current problems in the Employment Rights (Dispute Resolution) Act 1998, and the 2004 Dispute Resolution Regulations. This report suggests that disputes should be handled earlier through informal mechanisms such as mediation, rather than through formal mechanisms such as grievance and disciplinary procedures or Tribunals as is currently happening under interpretations of the current regulations. It was recognised that these more formal processes are not only stressful but they are also often expensive in terms of economic and time taken, This results in both employees and employers being engaged in formal and stressful processes that are expensive in management time, and have often unnecessarily escalated the conflict.
Following this report the government is changing the way workplace conflict is dealt with in the United Kingdom. On 6 April 2009, ACAS produced a new code entitled ‘ACAS Code of Practice – Disciplinary and Grievance Procedures. This new code suggests that employers should consider the use of a third party to help resolve the problem. The third party may be internal as long as they are not involved in the disciplinary or grievance issues. It also states that in some cases the use of an external mediator may be appropriate.
Recent research into the establishment of an in-house mediation scheme at the NHS East Lancashire Trust indicate that, in a very short period of time, significant benefits were achieved through mediation. The actual cost savings by settling matters early and by agreement were notable. In addition there was a 60% reduction in formal processes (grievances and fair treatment cases), and of those cases that went on to mediation the success rate was a 96% settlement rate. It was also reported that the mediation scheme has had a positive impact on the attitudes of staff in dealing with conflict; managers, employees, HR and union representatives indicate that they are more likely to adopt collaborative approaches when faced with conflict, than the typical adversarial approaches of the past. (©Consensio Partners Resolution Ltd)
Alternative dispute resolution, including mediation, provides an effective way for parties to resolve a conflict before it escalates In the event that is has already escalated mediation provides a forum in which time and the cost of external processes can be minimised.
When used internally mediation provides parties with an opportunity to communicate and to be personally empowered to agree outcomes that work in their particular situation. Such outcomes are typically more sustainable as they are not only mutually acceptable but they are future focussed resulting in a productive working environment. This enables parties to recover from the ‘storming’ and enter ‘performing’ stage of Tuckman’s model.
TINA SUVAJAC – LEES
OXFORD MEDIATION MEDIATOR
The cost of winning...
Talk to anyone who has been through litigation and a trial and they may well tell you the process was cripplingly expensive and the outcome unsatisfactory. Why is it then that people, their companies, and sometimes their lawyers, more often than not, seem to regard any form of mediation as a sign of weakness rather than a sensible first step? Maybe most people want to "win" or prove a point.
If that isn't true, why is it that so very few disputes going through the Courts are mediated? After all, mediation does work in resolving around three quarters of disputes.
And it is not just disputes that can be addressed. At the very early stages of discussions about a potential dispute, where the parties just differ but have not fallen out, or maybe where parties are trying to negotiate contract terms, a good mediator can help sort things out.
Cost should not be the issue. Maybe parties baulk at the "extra cost" of employing their lawyers to represent them at the mediation. At £200 or £300 per hour it's easy to see how legal costs could be a deterrent. But of course you don't need lawyers to tell you what the commercial value of a dispute or particular point is to you; so maybe you don't need lawyers to mediate?
The cost of mediation itself does vary and the market seems particularly competitive for lower value claims. Per party published rates for the National Mediation Helpline are £300 for a three hour mediation, and £425 for four hours, with additional time at £95/hour. Those rates seem to work as a bench mark for mediator providers. But of course under the NMH scheme you may have little control of the appointment process and risk dealing with a mediator with little relevant experience.
The big national providers like ADR Group (£400 for three hours, £800 for eight hours) and CEDR (£90 to £250 per hour) can work out to be more expensive depending on the seniority of mediator. But even so the cost of the mediator is often relatively low, and the potential cost benefit well worth the investment, compared to the issues to be decided. (All the above rates are as published on 11th February 2011, and are subject to Vat where applicable.)
Some of the smaller providers with lower overheads, like Oxford Mediation, see a gap in the market. They can provide experienced mediators at relatively modest rates.
An important point, often overlooked, is that mediation can be a very flexible tool. What is it you want from the process? Do you want a mediator to just facilitate discussions or to give you an opinion about the rights and wrongs of your position? Most mediations are "facilitative" rather than "evaluative", but sometimes parties do want to know, from a mediator experienced in their business, where they stand.
Is the dispute just about cash? If it is, then do you want a protracted "formal" mediation or would you rather more of a negotiation just around each party's "bottom line"? This approach, of just exploring the boundaries of a cash settlement and ignoring the strengths and weaknesses of the parties' positions, is quick. Because it cuts to the chase, time limited mediation is becoming more popular.
So maybe if your negotiations are stalling, or you are at the start of a dispute, you could think about what you would like to achieve and how, and whether the right mediator could help.
Dealing with risk and uncertainty in mediation
There comes a point in all mediations where the parties need to decide whether or not to accept an offer. To make that decision they need to compare the offer on the table with what would happen if they rejected the offer. Rejection usually means going to court. Going to court means risk and uncertainty. No matter how bullish the advice a party receives, there is always a chance that a judge may see things differently. So how do you decide if the offer on the table is better than going to court in the face of this uncertainty?
There are various tools to help put a value on an uncertain future event. At the heart of most approaches is the notion of "expected value". If I toss a fair coin with £10 on heads and nothing on tails, then the expected value is £5. This is calculated as (£10 x 0.5) + (0 x 0.5) = £5. Similarly, if your chances at court are 50-50 and you get £10m if you win and nothing if you lose, then the expected value is £5m. If the offer in the mediation is greater than this, say £6m, then it is clear that you should accept the offer rather than go to court: £6m is better than £5m.
Things are often a little more complicated. For example, it is rare that you won't end up paying anything if you lose in court. Extending the 50-50 example above, consider if you lose you have to pay £2m (in costs and legal fees, for example). Now the expected value is (£10m x 0.5) - (£2m x 0.5) = £4m.
You could also change your estimates of success in court. You may think that your chances are better than 50-50, say 80% chance of winning. Now the expected value is (£10m x 0.8) - (£2m x 0.2) = £8m - £0.4m = £7.6m. If the offer is still £6m you would have to think long and hard about the £1.6m discount you were giving to the certain £6m offer versus the uncertain, but expected £7.6m if you reject the offer.
You can use this simple logic to help you decide whether or not the offer on the table is a good one. Indeed, you can put yourselves in the shoes of the other side and work out what you think their expected value is. In these circumstances, you are calculating the other side's bottom line – a powerful piece of intelligence in any negotiation.
There are many advantages to doing this kind of simple analysis before or during mediation. The main downside is the risk of garbage in meaning garbage out if estimates of costs, awards or probabilities are wrong. However, 5 minutes calculating an expected value will undoubtedly help you clarify your thinking when it comes to accepting or rejecting that offer.
The David Poole Memorial Award
Rory Pritchard (3rd Year LLB undergraduate) is the first person to receive a new prestigious award - The David Poole Memorial Award – for his excellent negotiation assignment undertaken as part of his second year studies.
The Award, given to the second year student attaining the highest grade in the negotiation module on the law course at Coventry Univeristy, has been generously funded by Oxford Mediation, a panel of experienced mediators who provide mediation and dispute resolution both nationally and internationally.
Oxford Mediation wished to acknowledge the outstanding work undertaken by David Poole in the field of mediation and felt that an award of this nature was fitting and one of which David undoubtedly would have approved. David was also a founding member of Oxford Mediation.
Coventry University Law School was chosen as the honoured recipient of the prize when it transpired that David was a past student of the University (then the Lanchester Polytechnic) having studied Russian here several years ago. Indeed, by way of further coincidence, the former Chair and a mediator with Oxford Mediation, Shaun Jardine, was also a former law graduate of Coventry University.
Shaun was instrumental in arranging for the granting of this prize to Coventry University. Rory was presented with the engraved glass award, together with a cheque for £200, by David Poole’s widow, Carol, accompanied by Shaun and colleague Yashmin Mistry.