Deal Makers vs. Deal Breakers

In mid-September we returned to the United States from West Africa where I served for 18 months as Associate Area Legal Counsel for a large non-profit multinational entity. We’ve been driving the West Coast, hugging grandchildren along the way. Soon we will return to the Bay Area where I will begin mediating and arbitrating cases full time (as I did before we left for our service in West Africa). I expect to be back to work full time on October 23.

Before we left West Africa I learned of a mediation (not involving the entity I was working for) that had failed. The mediation took place in the United Kingdom but it involved parties and counsel from West Africa. Apparently during the mediation one of the attorneys bristled at one of the demands made by the opposing side and responded by exclaiming “That’s a dealbreaker!”

And that’s all it took. As soon as he said that, the client to whom this comment was directed stood up, packed up his things, left the mediation and caught a plane back to West Africa. The negotiations were over – and the settlement was never concluded.

What happened? This is an extreme example, but it illustrates a key principle. Various deal points may be essential to resolution of a dispute, but the importance of this one thing cannot by overstated: Parties to a mediation must feel like they are respected and are being treated fairly. If a party at mediation feels like they have been snubbed, or if they feel like they other side is negotiating in bad faith, or is trying to manipulate or take advantage of them, then suddenly the deal points that really matter can take a back seat to considerations of self-respect and principle. Few litigants are so thin-skinned that after being told a point is a dealbreaker they will storm out of a mediation and never return. But tolerance levels vary; statements that may not bother one litigant at all may seem like the strongest of personal affronts to another.

Oftentimes counsel won’t know the temperament of an opposing party in advance of a mediation. Counsel at mediation may at times be tempted to take a hardline position as a means of gauging the other side’s willingness to move. Such an approach may be successful in some cases. But in others it may backfire (as happened with the client in the extreme example described above who permanently terminated negotiations in response to a simple statement that his demand was a “dealbreaker”). There can be significant value in testing the other side’s resolve at mediation – but there are ways to do it without taking a hardline position. Counsel who seek to test the resolve of the other side without offending them can effectively do so by telegraphing firm but quiet positions – and in this way they can gain important information about the other side’s values and positions without emotion, principle or offense getting in the way. Counsel who conduct their mediations this way become in a very real sense “Deal Makers” rather than “Deal Breakers.”

Copyright 2023 ROBERT B. JACOBS