Before I became a mediator I participated in many mediations where I served as legal counsel for one of the parties. Most of the time we talked only about money. It seemed like the plaintiff always wanted too much and the defendant always wanted to offer too little. After wrangling about facts, law and responsibility for several hours we would finally get down to the business of figuring out just how much it was going to take for the plaintiff to dismiss their claims, or just exactly how much the defense was willing to pay in order to buy peace.
That’s still a common model for many mediations. But after becoming a mediator I discovered some things I’d never known about mediation. For many years I had said that mediations are resolved due to two things: Risk and Cost.
Risk and Cost are readily identifiable as key settlement factors. No litigant is ever guaranteed any particular litigation outcome, and finding out who if going to win and who is going to lose a case can be an expensive (and time-consuming) proposition. In order to save their time and their pocketbooks many plaintiffs will agree to “take a haircut” on their claims; likewise, many defendants will offer more than they feel is reasonable just so they can put this case behind them.
But sometimes the prospect of losing a case just isn’t enough to get a settlement over the finish line. Sometimes there are other considerations that are just as important – maybe even more important – than Risk and Cost. These “other considerations” take the form of pride, ego, saving face, respect, a desire to punish the other side, a desire to “teach them a lesson,” a sense of fair play or substantial justice. I sometimes refer to these as “soft considerations” (in contrast with cold hard cash, also sometimes referred to as a “hard consideration”). The importance of these “soft considerations” cannot be overstated.
When you hear someone decline to settle because “It’s the Principle of the Thing” then you know you are dealing with “soft considerations.” When people say “I don’t care how much I get; I just don’t want them to get more” you likewise know you are dealing with soft considerations. Sometimes parties will openly admit they are motivated by “soft considerations.” If asked whether their dispute is “about the money” or whether it’s about “what the money represents” they will sometimes admit that the dispute is about “what the money represents.” In those situations the money is a way of “Keeping Score” or “Receiving Recognition” or simply just about being respected. Sometimes people will acknowledge this directly, but other times they themselves may not fully appreciate just how important these “soft considerations” are to their settlement posture.
Why is all of this important? For two reasons. First, if you don’t identify important soft considerations you may not be able to reach a settlement at all. If these soft considerations are the things truly driving the dispute, then unless you have a limitless supply of settlement money available (and nobody does) you don’t make any settlement headway unless you satisfactorily deal with them. Secondly, even though money is always important, if the true issues underlying the dispute are a desire for respect, equality or fairness then if you identify that early on you may be able to satisfy those concerns other than with money – which may make it far more likely a settlement will actually be reached.
I’ve seen a multimillion dollar deal fail not because the money involved was insufficient – but because there was a perceived lack of respect. Money talks – but sometimes respect talks even louder. Be oblivious to these concerns and you may find yourself on the short end of the stick with unresolved disputes that could have been resolved if these soft considerations had been adequately identified and addressed.