part 1
Impasse. Arguably the single most dreaded word in the world of negotiation — where the worst outcome is no outcome. Impasse occurs every day — in business, marriage, life — and typically results when one or both parties in a negotiation refuse to make further concessions on a particular issue.
As much as I despise impasse, it’s the rare mediation that doesn’t reach a potential impasse somewhere along the way — which is why it’s so important for mediators to help parties either overcome them, or avoid them altogether. Impasses generally fall into one of three groups (substantive, procedural or emotional) — and it’s not uncommon for impasse to result from a combination of all three.
Substantive Impasse
The most easily-identified of the three, substantive impasse results from one or both parties concluding that their monetary (or substantive) interests are not being met.
Procedural Impasse
This situation usually occurs when a party believes the structure of the negotiations, or the mediation process itself, is being conducted in an unfair or inappropriate manner.
Emotional Impasse
This happens when a party feels that their emotional interests have not been respected through the process.
Mediators can usually prevent procedural and emotional impasses by managing the process — paying close attention to details such as neutrality (ensuring that both parties perceive the process as fair), and to the parties’ emotions. As long as parties feel they have the opportunity to be heard without being bullied, intimidated or cut off, procedural and emotional impasse can usually be eliminated.
Preventing and overcoming substantive impasse (which often starts with a “take it or leave it” offer, and can occur at any stage of negotiation) isn’t quite so simple. There are numerous tactics for dealing with substantive impasse — most of which involve changing the dynamics of the process. A simple way of saying this is “trying something different.”
Closing The Gap: Four Approaches
Sometimes impasse occurs as the parties are closing the gap, or wrapping-up negotiations. It usually involves an amount of money and the feeling (of one or both parties) that they’ve already given too much — or that they’ll lose face if they give anymore. Even though settlement is close, and the parties know the matter should be settled, they become adamant that they can and will give no more.
The most common approach used to close the gap is to encourage parties to split the difference. It’s typically the best way for them to share the pain.
Another approach is to use random chance. For instance, if the parties are $4000 apart, write-out, on slips of paper, the amounts $0, $1000, $2000, $3000 and $4000. One slip of paper will then be selected randomly, with an agreement that the one chosen will be the number both parties accept. This allows the parties to save face while introducing a game of chance into the mix.
A third approach is you cut, I choose. Here one party divides the object of value and the other party has first pick of the resulting division. This often works when the item in dispute is divisible, or when there is more than one item.
A fourth approach involves developing other processes. One option here would be to retain a third party to decide the gap issue. That person could be an expert, a non-expert, a trusted neutral, a relative, or anyone else the parties agree on. The third party would be authorized to decide the gap issue only. Another option in this fourth approach would be to agree to a med/arb — which combines mediation and arbitration, and allows the mediator to decide the gap issue.
part 2
Preventing Impasse
Needless to say, the best way to deal with impasse is to prevent it altogether. One way of doing this is by proactively addressing the prospect of last minute add-ons — or additional claims and issues introduced after a substantive agreement has been reached. Typical add-ons include confidentiality agreements, mediation costs, and who will prepare the settlement documents — and they can all derail the settlement process.
To avoid this problem, I try to bring-out these issues as early in the process as possible — and I repeatedly ask the parties, during negotiations, if there are any additional issues that need to be considered.
When an issue is added on at the last minute, I’ll try to assess whether it’s a tactical ploy — or merely an oversight. If it’s oversight, a reasonable explanation will often smooth over the problem — but a little face-saving may also be necessary. If it’s a ploy, I’ll usually confront the party adding it in. In any case, the earlier add-ons can be uncovered during negotiations, the likelier they can be handled without causing impasse.
Changing The Dynamics
When parties are unable to avoid impasse, there are a number of ways you can change the dynamics of negotiations — including:
Changing The Negotiations’ Focus
When negotiations get locked-up over a specific issue or position, parties often lose sight of their core interests. (EXAMPLE: In an automobile accident case where the plaintiff alleges negligence on the part of the defendant, the issue might be whether the defendant was negligent, and the plaintiff’s position is that the defendant was negligent. The plaintiff’s interest is in fixing her car and being compensated.)
That’s when I’ll recommend we move-on to another position — and come back to that one after other issues have resolved. The goal here is create some momentum in the process by refocusing the parties’ attention on their core interests; when do that, they’re reminded of the bigger-picture need to push negotiations toward satisfying those interests.
Doing Something Different
Take a break, call a caucus or bring the parties together. Meet with just the attorneys or meet with just the parties. Shake things up. If what you’ve been doing isn’t working don’t be afraid to change the routine. Sometimes it’s all you need to change the focus — so the parties can see things differently. Another approach I often try at this stage is to personally request a move by the parties. Sometimes, it’s easier for a party to move if the mediator presents it as a personal plea.
Encouraging The Parties
Positive reinforcement can go a long way in motivating additional movement. Which is why I try to be positive and encouraging about progress, no matter how small that progress is.
Exchanging More Information
Consider the possibility of exchanging more information on the issues, so the parties can better consider the other parties’ position. Information is power. The more information the parties exchange, the better the decisions they can make. I usually combine this with another approach to get parties to focus on their interests.
Focusing On The Testimony Of A Witness
Consider focusing on a key witness’s testimony, and having the parties discuss the significance of that testimony. I like to put the testimony to a reality test, and explore what effect it will have on the outcome of the case.
Enlisting The Help Of The Parties
Try conducting a brainstorming or option-generation session. Seek to broaden the scope. This can be done with the parties and attorneys, or with one and without the other. Don’t assume there is only one way to resolve an issue. The parties have the greatest stake in the lawsuit, so enlist their help.
Calling On Leadership
In cases where you have a number of participants, both lawyers and non-lawyers, it’s helpful to identify a leader (or leaders) on each side. When impasse occurs, pull the leaders aside and enlist their help in getting things back on track. If you can bring together leadership from both sides, it can often help refocus the parties, rebuild trust, point-to a new direction and jump start negotiations. I’ve found that leadership usually has the leverage with the other participants to help get things moving again.
part 3
As noted earlier, when parties are unable to avoid impasse, there are a number of ways you can change the dynamics of negotiations. Here are the most common tactics I use:
Offering An Assessment
I remind the parties of their BATNA (Best Alternative to a Negotiated Agreement) and WATNA (Worst Alternative to a Negotiated Agreement), and emphasize the costs and risks in failing to settle. At this stage, I’m often asked to advise the parties on what offer to make next. I’ll use this as another opportunity to do reality testing with the parties.
Pushing For Linked Moves
Use “what ifs.” IE: “What if I could get the other side to move to X, would you move to Y? If not, how far would you move?” You can often make progress by feeling out a party’s position without even having an offer to present. If you can urge the parties to move jointly, it allows them all to save face. Consider proposing a range from which the parties will negotiate. Even if it’s rejected, it can lead to the discovery of other moves.
Conditional Offers
Making conditional offers, or “bracketing,” is an excellent way to move along stalled negotiations. In this scenario, parties agree to narrow the scope of their disagreement by making moves conditioned on the others’ moves. For instance, if the defendant is at $500,000 and the plaintiff at $5,000,000, the defendant might be willing to move to $750,000 if the plaintiff will move to $2,500,000. It’s not uncommon for the parties to reject each other’s conditional offers, but even when that happens, I find the mere exchange of conditional offers can encourage parties to resume negotiation.
Mediator’s Proposal
A mediator can suggest a set of terms to which the parties must respond under certain ground rules — namely, that each party must tell the mediator privately whether they’ll agree to the proposal. The terms must be accepted or rejected as is, and each party answers without knowing the other’s answer. Both parties know they can achieve complete resolution by answering “yes” to the mediator’s proposal, and a short time limit is set for acceptance or rejection.
When parties reject the proposal, they never learn whether their opponent would have accepted it. I tell the parties that the proposal isn’t necessarily a reflection of what is fair or warranted, but rather a reflection of what I believe the case can be settled-for after spending time with everyone involved. I usually tell the parties when neither side indicates a willingness to accept the proposal.
Court Assistance
A judge is always available as a tool (or more accurately, a blunt object) to re-energize negotiations. Sometimes the mere suggestion of getting the court involved can motivate parties. If the court gets involved, it probably won’t help you the day of the mediation impasse, but it may provide assistance for subsequent conversations and/or meetings.
Challenging The Parties, Adjourning And Contacting Later
Some cases will not settle the day of the mediation. Sometimes parties need time to accept the reality of their case. While adjournment poses the risk that the parties never returning to discuss settlement, the risk is minimal. Prior to adjournment, I try to arrange for status calls — and possibly schedule a future meeting. It’s not uncommon for further negotiation to occur through a mediator by telephone or email.
Persevering
Oftentimes, apparent impasse is only that: Apparent. The parties may be sincere in their refusal to negotiate, but unless they’re pushed, you’ll never know if an impasse can be overcome. Good mediators don’t easily take No for an answer.
When I encounter what appears to be a brick wall, I push on the bricks in hopes of finding a loose one. When I find one, I focus my attention on dislodging that brick. Sometimes that’s all you need to bring-down the wall and get negotiations back on track.
Conclusion
Most impasses can be overcome — particularly when the parties trust the mediation process and understand that impasse is not unusual. In many cases, it’s expected.
I try to let the parties to own their impasses, and get involved in resolving them. That’s critical. Each case has its own timeline for settlement, and very few will settle before the time is right. Skilled mediators can assist parties in avoiding and overcoming impasses, and a mediator’s ability is often the key to whether or not a case is successfully resolved.
RESOURCES
Laurence J., et al., Mediation Skills and Techniques (2008).
Dwight Golann, Nearing the Finish Line: Dealing with Impasse in Commercial Litigation, Dispute Resolution Magazine, Winter 2009, at 4.
Kimberlee K. Kovach, Mediation: Principles and Practice (2000).
Rodney A. Max, Breaking the Impasse – The Unique Mediation Opportunity, 2006.