The Process of Mediation

by Paul Cutler | Dec 19, 2024 | ADR

The Process of Mediation: An Overview

Mediation is a structured, voluntary, and confidential process in which an impartial third party, the mediator (hopefully me), facilitates communication between disputing parties to help them reach a mutually acceptable resolution. The mediation process is flexible and can be adapted to suit the needs of the parties involved, but it generally follows a series of defined steps to ensure effectiveness and fairness.

If you undertake mediation training in Australia you will probably be taught about the seven steps in the process.

Preparation and Agreement to Mediate

Most of the mediations I do involve parties who are already involved in litigation (and usually in commercial disputes). They sometimes come to mediation willingly and sometimes they come as a matter of case management and sometimes they are forced to mediate against their will.

The first step in mediation is often called “intake”. This is effectively an assessment of suitability for mediation. I will sometimes (but not always) have a conference with the parties to explain the process, establish ground rules, and outline my role.

I also have a mediation agreement and a standard form confidentiality agreement which will be provided to the parties.

The mediation agreement emphasises neutrality, confidentiality, and the voluntary nature of the process. All parties must agree to participate in good faith, ensuring they are willing to explore potential resolutions.

All people present at the mediation will be asked to sign the confidentiality agreement on the day.

Setting the Framework

Once the parties agree to mediate and a place and time for mediation is set I usually ask for some information about the dispute.

Typically, I would request a copy of the pleadings in the litigation. Large volumes of affidavits and documents are rarely helpful. I also ask the parties to prepare an “interests statement”. Many lawyers will write a “position statement” cementing in place their adversarial position. It is much better if the parties to identify key issues and think about their goals for the mediation.

Opening Session

The mediation process formally begins with an opening session. I introduce myself and everyone present. I explain the structure of the session, and reiterates the principles of mediation, including neutrality, confidentiality, and the focus on collaborative problem-solving.

Each party is then invited to present their perspective on the dispute without interruption. This step allows the parties to express their concerns, feelings, and interests while giving the mediator and other participants a clearer understanding of the issues at stake.

Identifying Issues and Interests – exploration

During the opening session, the mediator works with the parties to identify the specific issues that need resolution. This agenda which is agreed to by the parties forms the framework for further discussion.

The national model of mediation provides for exploration and discussion where I will encourage the parties to speak to each other about their perspective on the agenda items. Information and views are exchanged.

This often involves separating positions (what each party says they want) from underlying interests (the reasons behind those positions). By focusing on interests rather than positions, the mediator helps the parties uncover common ground and opportunities for collaboration.

In court directed mediation t is common practice for agenda setting and exploration to be skipped in favour of early private sessions between the mediator and the parties.

Private Sessions

Private sessions with the parties are chance to recap and review where a party is at. It allows some reality testing and the opportunity for some confidential discussions about constructive options going forward. 

Although this happens in court directed mediation, the process is then one of “shuttle mediation” where I might be asked to convey offers or issues to the other party.

Generating Options – brainstorming

I enjoy this part of the process. I facilitates brainstorming sessions to explore possible solutions. Creativity and open-mindedness are encouraged at this stage, with all suggestions being considered without immediate judgment. The goal is to create a list of potential options that address the interests of all parties. I try to ensure that the discussion remains constructive and focused on problem-solving rather than blame or criticism.

This can be done with the parties present (the national model) but is often done by the mediator relaying (shuttle) offers and ideas back and forth.

Negotiating and Reaching Agreement

Once the parties have generated options, the mediator guides them in evaluating and refining these solutions. This step often involves compromise, as parties weigh the feasibility and fairness of different proposals. I work with the parties to gradually work toward a mutually acceptable agreement.

Drafting the Agreement

If the parties are represented by lawyers, the task of drafting a settlement agreement (or a deed) will fall on them. Sometimes my assistance is sought or sometimes “mechanical issues” arise that need to be resolved.

It is my practice that parties should not leave the mediation until there is a binding settlement agreement reached. When I negotiate on behalf of a party (not in my role as mediator) I will often say to the other party “there is no agreement until it’s in writing and signed by both of us”.

Overnight buyers remorse or even worse, a dispute about whether settlement has occurred at all should be avoided at all cost!

If the parties reach a resolution, I can assist in drafting a written agreement that outlines the terms. This document serves as a clear record of the commitments made and may be legally binding if the parties wish. The agreement reflects the consensus of all parties and is reviewed thoroughly to ensure clarity and mutual understanding.

Closing and Follow-Up

In the final stage, the mediator concludes the session by summarizing the outcomes and addressing any remaining concerns. If needed, the mediator may suggest follow-up sessions to monitor the implementation of the agreement or address unresolved issues. The process ends on a positive note, emphasizing the progress made and the commitment to maintaining harmony.

Conclusion

Mediation is a highly effective process for resolving disputes in a collaborative and constructive manner. By fostering open communication, promoting mutual understanding, and focusing on interests rather than positions, mediation empowers parties to create solutions tailored to their unique circumstances. Its flexibility, confidentiality, and emphasis on voluntary participation make it a preferred alternative to adversarial dispute resolution methods such as litigation.

Creative commons acknowledgment for the photograph.

Against Settlement

by Paul Cutler | Oct 8, 2024 | ADR

Against Settlement is the title of a paper written by Owen Fiss, a law professor at Yale which was published in 1984. There is a link to it available on the Yale law school website. 

Against Settlement is a paper that I find quite challenging. When I was doing my masters in dispute resolution, it felt like Against Settlement was relevant in almost every subject that I did. So, why did I find it challenging?

Most matters settle

Despite my chosen career as a litigation lawyer, I actually don’t like conflict. I have always believed that it was almost invariably in the best interests of my clients to reach a settlement.

Litigation is expensive and the outcome is uncertain. It is my view that a compromised settlement is effectively the price of buyng certainty. I am not alone. The vast majority of civil cases that are commenced in the NSW Supreme Court are settled before they go to trial. The last time I looked the settlement rate was around 90%. This high rate is encouraged by the case management practices of the Court and by the use of court annexed mediation.

All that was before I read Against Settlement.

Litigation’s public function

Fiss says that litigation serves a public function by allowing courts to interpret, develop and enforce laws in ways that are a reflection on society. He argues that private agreements, like settlements, do not contribute to the development of legal precedents or the public articulation of rights and responsibilities. The opportunity to develop and clarify the law is lost.  Instead of serving as a venue for the adjudication of rights and the development of legal doctrines, courts become mere facilitators of private agreements.

In fact, he argues that settlements actually undermine the judicial system and that they basically prioritize efficiency over substantive justice. Perhaps it was different in 1984, but certainly today it is fairly plain to see that the court system is under resourced. This problem is worse in some areas (e.g. family law) than in others. If every matter were to go to trial, there would be long (or even longer) delays in the system which would itself be an injustice to the parties.

Fiss also argues that settlements often result in outcomes that favour powerful parties at the expense of weaker ones. This is really something that I hadn’t really thought about. It’s true that there is no strict procedural fairness in the settlement process. Settlements are usually reached through negotiation and compromise. In contrast, the trial process provides a more structured and transparent means of resolving disputes, with procedural safeguards designed to ensure that all parties have a fair opportunity to present their case and challenge the evidence.

Conclusion

It’s certainly true that Against Settlement has been a very influential and much debated contribution to academic writing. Of course some people agree with him and others say that his ideas are overly idealistic and impractical in the face of the realities of modern litigation. I can see both sides of this argument. For me, I think the take home message is that there is a  tension between efficiency and justice in dispute resolution that we often don’t discuss.

Creative commons acknowledgment for the photograph.

BATNA

by Paul Cutler | Aug 29, 2024 | ADR

BATNA is a negotiating term which was coined by  Roger Fisher and William Ury in their book “Getting to Yes,” (which I have previously blogged about).

What’s a BATNA?

Let’s start with the definition of BATNA. BATNA stands for Best Alternative to a Negotiated Agreement. BATNA is a term,  It is a very important concept in negotiation theory and emphasizes the importance of having a strong, viable alternative when negotiating.

There are a number of reasons why understanding your BATNA is very important. When negotiating, parties often present proposals or concessions. By comparing these offers to your BATNA, you can better determine whether the terms are advantageous or not. It can also be useful for assessing any alternatives that might exist. A BATNA can also serve as a “walk away point,” helping negotiators decide when to continue discussions or not.

A strong BATNA can also enhance negotiating power. The challenge for those with weak alternatives is to attempt to improve their own BATNA or to weaken the opponent’s BATNA.

Negotiating power

Power is one of the factors that influences the way parties negotiate and the outcomes achieved.  There is a considerable volume of academic literature concerning power and its role in negotiation.

Generally, negotiators with attractive BATNAs are powerful. It is also the case that negotiators who have more choice alternatives are also generally more powerful. There is a greater chance of matching preferences with alternatives. It can also be a powerful factor if a party has the ability to exit one negotiation and commence negotiation with a different party.

Power has both positive and negative effects on negotiations. It is well known that powerful people initiate negotiations and often move first in making the first offer. However, if both parties believe they have strong BATNA both may refuse to yield to the other. Hence, it has been said that  “…lawsuits go to trial, labour strikes drag on, and ethnic warfare continues, even when agreements that would make both sides better off are feasible”.

Inequality of bargaining power

On the other side, when power imbalances exist, the BATNA becomes particularly important for the less powerful party. It sets the limits of what advantage can be taken. Power imbalances may also lead to rigidity on part of both parties. The only perceived source of power for the weaker party is to refuse to agree to anything. It may also lead to “ultimatum bargaining” which has been described as “the less powerful party might resent the sense of coercion or inequity inherent in the more powerful negotiator’s demands and refuse to yield, even knowing that this course of action will cause harm to both sides.”

Taken to its extreme, inequality of bargaining power may be the ‘single thread’ which runs through the common law doctrines of unconscionability, undue influence and duress. It is unclear whether this unifying thread is accepted as the jurisprudential basis in Australia. In any event that’s definitely a topic for further discussion at another time.

Creative commons acknowledgment for the photograph.

Getting to Yes

by Paul Cutler | Aug 1, 2024 | ADR

When I started working as a commercial litigation solicitor in a small firm in 1996, the partner suggested that I read “Getting to Yes: Negotiating Agreement Without Giving In” by two Harvard academics Roger Fisher and William Ury. It was first published in 1981.

Even as a young lawyer I certainly understood the power of negotiation and certainly understood that most litigious matters settle before they are determined by a court. I now know (but probably didn’t fully appreciate at the time) that I was a traditional adversarial negotiator. Sure, there was compromise and terms were negotiated but really one party effectively won at the expense of the other.

Principled negotiation

Fisher and Ury introduce the concept of principled negotiation which is a more collaborative approach to resolving disputes. They set out four key principles of effective negotiation:

1. Focus on interests, not positions: Instead of getting stuck on rigid demands, explore the underlying needs and concerns of all parties. This approach opens up more possibilities for creative solutions that satisfy everyone’s core interests. 

 One story often told is about two children arguing over a chocolate bar. The first inclination is for an adult to cut it in half and distribute it. However, if anyone asked the children they would discover that one wanted the wrapper (which contained details of a competition that they wanted to enter), the other wanted the snack. It was possible for both children to get precisely what they wanted.

2. Separate the people from the problem: Recognise that emotions, egos and personal dynamics can interfere with finding solutions. Relationship issues should be addressed directly, respectfully and separately from substantive ones. Negotiators can maintain a productive focus and avoid personal conflicts from obstructing the process.

3. Invent options for mutual gain: Negotiation shouldn’t be a zero-sum game where one party’s gain is another party’s loss. Brainstorm a wide range of potential creative solutions before deciding on one. This expands the “pie” of available resources and increases the likelihood of finding win-win outcomes. 

4. Insist on using objective criteria: When interests conflict, use fair standards and impartial procedures to resolve differences. This helps avoid a destructive battle of wills and produces outcomes that both sides can accept as legitimate.

What’s a BATNA?

Another thing in Getting to Yes which took me a long time to understand was the concept of a party’s Best Alternative to a Negotiated Agreement (BATNA). In preparing for a negotiation if a party can identify their BATNA it gives them a clear sense of when to accept a deal and when to walk away. There is no point in accepting any offer which leaves someone worse off than their BATNA.

Getting to yes

Getting to Yes is easy to read and not very long. It has lots of real world examples and practical advice. It also emphases the importance of active listening, effective communication and empathy, all of which help to build trust and encourage constructive interactions.

As I have gained more experience as a lawyer and now as a mediator, I have become more committed to principled negotiation. 

If you only ever read one dispute resolution book in your lifetime, my recommendation is that it should be this one.

Creative commons acknowledgment for the cartoon.