Impasse — it’s the bane of all mediators. We know it when we see it. The gap between the parties seems unbridgeable. Neither side is willing to make a move. Emotions are running high, and both sides are ready to walk. What can mediators do to prevent negotiations from reaching an impasse? And if parties reach an impasse, what can mediators do to break it?
First, persistence is key — mediators should never give up. Even when the situation seems hopeless, there are many strategies available to end an impasse. The key is to identify the source of the deadlock and apply the right technique. There’s no guarantee any particular technique will work, but awareness of the options should always breed optimism.
Of course, the goal is to prevent negotiations from ever reaching an impasse. Happily, in 2011, the New York State Bar Association published an excellent guide (edited by mediator Molly Klapper) entitled Definitive Creative Impasse-Breaking Techniques in Mediation that features not only impasse-breaking techniques from leading mediators, but also creative strategies for avoiding impasse in the first place.
I don’t want to spill too many beans, but allow me to share some ideas that will illustrate why this tome is such a great resource for mediators (as well as for lawyers who frequently represent clients in mediation).
The Four Modes of Mediation
A helpful starting point is Professor Jonathan Hyman’s essay identifying four mediation modes: positional/distributive, value-creating, relationship, and understanding. Each mode describes a particular form of negotiation dynamic that may be present in a mediation. As will become evident, there is some overlap between the four modes, but they are distinct both conceptually and in the real world:
1. The positional/distributive mode refers to negotiations in which parties are fighting primarily over a sum of money and making moves to position themselves for the best economic outcome (and I say “primarily” because every good mediator knows that it’s almost never just about the money).
2. The value-creating mode refers to disputes where the parties are ostensibly fighting over money, but also possess opportunities to make value-creating trades that will expand the pie for both of them (often because there is the potential for an ongoing relationship, but as discussed below, this need not be the case).
3. The relationship mode refers to disputes rooted primarily in some breakdown in communication that has caused a formerly amicable relationship to deteriorate into mistrust and hostility.
4. Finally, the understanding mode — somewhat intertwined with the relationship mode — involves a failure to understand the point of view of the other side (for example, why they acted the way they did).
In terms of preventing impasse, the importance of the four modes according to Hyman is this: if the two parties are operating in different modes then one party may be unwilling to budge even as the other party feels it made a reasonable offer. The result is that the party making the offer may want to break off talks because it feels the other party is acting in bad faith when the true source of the impasse is that the other seemingly stubborn party simply perceives the dispute through a different lens.
This sort of disconnect commonly occurs in family business and estate planning disputes where, for example, one sibling thinks the dispute is simply about dividing assets while the other sibling is focused on past hurts that remain unresolved. Those old wounds may need to be healed in some manner (perhaps through validation or an apology) before the negotiations can advance.
But the same disconnect can also occur in business disputes. For example, assume a distributor has sued a manufacturer for commissions due on sales of the manufacturer’s product in the distributor’s territory. The distributor thinks the manufacturer’s stated excuses for withholding payment are flimsy, but would like to continue the relationship and offers to discount the balance due. But the manufacturer won’t budge. If the distributor’s concession is reasonable, it may be that there is something else going on; that is, instead of operating in a positional/distributive mode like the distributor, the manufacturer may “secretly” be operating in a relationship mode due to some conduct by the distributor that caused deep mistrust to the point where the manufacturer would like to end the relationship.
For example, maybe the distributor started selling a new product that the manufacturer perceived in its own mind as competing with one of the manufacturer’s other lines. The manufacturer may have viewed this as an inexcusable betrayal, but since it wasn’t technically a breach of the distribution agreement, the manufacturer concocted an excuse to withhold commissions. The distributor, however, may be completely unaware that its conduct was objectionable. It falls to the mediator to detect the disconnect in the parties’ approaches to the negotiations and get them on the same page by determining what is irking the manufacturer and obtaining permission to communicate that to the distributor so it can better understand the manufacturer’s perspective about what went wrong.
Or to use a modified version of a hypothetical constructed by mediator Terri Roth Reicher, imagine that an entrepreneur looking to retire has sold his business to a buyer under a contract that provides for a portion of the sales price to be paid over time in the form of fixed payments and a percentage of sales. Assume the buyer has stopped making payments. The seller thinks the buyer is dishonest, but in fact it may be that the business environment has dramatically changed since the sale, and the revenue that the seller projected is not materializing because of new competition, tariffs or some other economic dislocation. Before there can be progress, the mediator needs to change the seller’s understanding of the buyer’s situation and motivation for non-payment.
Assuming the mediator determines that the two sides are operating in the same mode, the mediator can then employ a technique tailored to that context to avoid impasse.
Techniques for Positional/Distributive Negotiations
As Professor Dwight Golann observes, in positional/distributive negotiations, a frequent source of impasse is the “insulting” first offer. For example, a plaintiff makes a demand that the defendant considers so unreasonable that it either responds with its own extremely lowball offer, or refuses to respond at all (forcing the plaintiff to negotiate against itself, which is a sure recipe for impasse). In fact, the parties’ expectations of what a reasonable settlement looks like may not be very far apart, but they never get to explore that possibility because each side has adopted a highly confrontational and reactive negotiating style.
Professor Golann suggests many helpful techniques for discouraging insulting offers. For example, when a party proposes an extreme offer, Professor Golann suggests that the mediator discuss the party’s reasoning. Can the party offer some justification or explanation to accompany the offer? Or perhaps the party can add a non-monetary concession that softens the blow? The party should also be encouraged to consider how its adversary will react to the extreme proposal. Perhaps there is another less antagonistic, more constructive way to send the signal the party wishes to send.
If despite the mediator’s best efforts, the party nevertheless insists that the mediator transmit an extreme proposal “as is,” the mediator still possesses options in terms of how and when he or she communicates the proposal to the other side. Professor Golann recommends delivering it with context that reduces the negativity of the proposal while simultaneously suggesting constructive ways for the receiving party to react. A mediator might also consider delaying delivery of the proposal until the timing is right. Mediator J. Anderson Little further recommends acknowledging the recipient’s dilemma and then collaborating with the recipient to craft a response that sends signals that maintain forward progress.
Another problem in positional/distributive negotiations is that one or both sides may not have undertaken any real effort to value their case. Walking the parties through a litigation risk analysis using probabilities and expected values is one tool that mediators can use to address this information vacuum (a subject for a future post). Alternatively, Professor Elayne Greenberg suggests that mediators encourage the attorneys for both sides to each include an objective analysis of the stalemate in their mediation statements that addresses both the strengths and weaknesses of their respective cases.
Techniques for Relationship and Understanding Modes
What about techniques for the other modes? If there’s a strong emotional component to the dispute, parties may need some time to vent (a tool explored by Terri Roth Reicher). Mediator Julie Denny also suggests encouraging each side to articulate the other side’s positions. Importantly, this doesn’t mean agreeing with the other side, but rather simply understanding its thinking. Such understanding may result in an epiphany that motivates flexibility.
Techniques for Value Creation
Many mediators assume that opportunities for value creation (a/k/a “pie expansion”) only exist in disputes where there is a prospect of an ongoing relationship. But mediator Irene Warshauer demonstrates this need not be the case with short vignettes of mediations where creative proposals helped clinch the deal notwithstanding the absence of a future relationship such as allowing a terminated employee to enjoy the discounted employee rate when making a wedding at the employer’s hotel, and naming an annual lecture on health care quality after a patient who had died as a result of medical malpractice.
The bottom line is that mediators need to think out of the box in every mediation and remain alert for value-creating trades that can help bridge a gap on the money side (see our post on how IBM and Groupon appeared to have closed a gap on money in a patent dispute with a value-creating settlement term).
In conclusion, the expertise to prevent, and if necessary, break impasses constitutes a big part of the value-add that mediators bring to the table. Reading the NYSBA’s book (available for sale here) will surely help any mediator further hone this valuable skill.
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