There are a number of predictable hurdles faced by negotiators and mediators. One of these is the tendency of negotiators to say or raise suspicions that they do not have authority to settle. Rather they must first consult with influential outsiders or constituents.
The types of outside influencers are described, and a routine process is suggested to identify important constituents or “tribes”; then to normalize, reframe and turn this barrier into a standard problem solving question such as, “How to manage any influential outsiders?”
Thirteen possible responses to this question (each with inevitable advantages and disadvantages) are systematized for mediators and negotiators to learn and possibly “add value” to any negotiation.
The aim of this article is to identify and catalogue a number of responses anecdotally used by negotiators and mediators who discover that there are influential outsiders exerting power over the visible negotiators.
It is rare for an individual present at a negotiation or mediation to have “unlimited” authority to settle or make decisions. Even the most rugged individualist usually has someone looking over his/her shoulder. This may be a spouse, child, business partner, CEO, board of directors, shareholders, head office in Chicago, club or church members. We are all part of some “system” or “network” of influences. These people in the background, sometimes in the shadows, can be described as supporters, influences, bosses, stakeholders, third parties, constituents, outsiders, armchair critics, bush lawyers, sticky beaks, nosey parkers, ratifiers, destabilisers, tribal members, intermeddlers, cheersquads, principals, hawks, doves or moderates . Here in this article, the terminology of “the tribe” will often be used.
The visible negotiator can be labeled an agent, representative, spokesperson, mouth-piece, pawn, victim, channel, or go between.
Moore characterizes constituent groups as either “bureaucratic” or “horizontal”. Bureaucratic constituents are the hierarchy of decision-makers in companies, government agencies, tribes, schools and many other institutions. “Horizontal” constituents are friends, relatives and co-workers whom a disputant feels obliged to consult and listen to.
*Legal Authority
*Persuasive Authority
*Reasonable Outcome Authority
Most negotiators have “authority” and willingness to settle as long as the settlement provides a “good” or a “reasonable” outcome that will placate the various members and factions in their tribe. However if any outcome is emerging or imminent outside those vague criteria, then their legal authority, moral willingness and nerve tends to wobble or fade away.
Thus for most negotiators, the accurate answer to the question “Do you have the authority to settle this dispute?” is “yes and no”; or “it depends”; or ”I do have authority, but I will tell you later if I have willingness”.
At law school, neophyte lawyers tend to be inculcated with the sometimes unhelpful fiction that there is only one “client”, and that definitive “instructions” should come from the client, not from outsiders. That is a useful administrative fiction in a courtroom, but is entirely unhelpful for the work of lawyers and mediators as interviewers, negotiators and problem-solvers.
Lawyers and mediators can relate many tales of how at the end of a negotiation one disputant suddenly and coyly says, “I just have to make a phone call [before I sign the agreement]”. To which the others exclaim “But I thought you said you have authority to settle…!” To which the ambusher says “I do, but….”
The concept of “authority to settle” has a number of different possible meanings. The word “authority” equates with the many gradations of power. Thus a negotiator may have “authority” in one sense, but not in many others. To illustrate this proposition the many categories of “power” or authority can be reduced simplistically to just three – “legal”, “persuasive” and “reasonable outcome” authority.
First, an individual or representative of a tribe may have legal authority. That is, the individual can “bind” others because (s)he has signing rights for club, a partnership, or a corporation, or for some other group. These “rights” to commit others legally will usually be contained in a document signed by the members or friends. Alternatively, the representative may as owner or director or manager have implied authority to bind others. Sometimes at negotiations and mediations, a representative produces an irrevocable written authority signed by each member of the family or group (s)he represents.
In disputes about personal injuries, it is common for a plaintiff to insist that the negotiating insurer for the defendant must “have authority to settle up to the limit of the claim”. Insurers can use a variety of tactics to respond to this routine request.
Legal authority is always powerful, particularly when the agreed immediate obligations can be enforced by a court – such as the payment of money, retirement of directors, or transfer of land. It is less powerful when it relates to promises for the group to co-operate, trade, or help in ongoing future obligations.
Secondly, an individual or representative of his/her tribe may have persuasive authority. Persuasive authority can be described as the ability, demonstrated by history and moral courage, to work persistently to convince the various factions within a tribe to comply and co-operate. Many negotiators with legal authority, (eg CEO’s, presidents, individual family members), have weak persuasive authority. They will not exercise their legal authority for fear of retribution from their free-wheeling tribe, family or shareholders; and even if they sign a legally binding document, few in their tribe will thereby be persuaded to comply with future obligations.
At a recent mediation in which the writer was involved, one indigenous Aboriginal person present had strong legal authority. She was the director of a corporation and the named plaintiff in the litigation. Clearly, she could personally sign a legally “binding” settlement. However, her persuasive authority wavered each evening as the hawks in her tribe verbally assaulted her with: “It’s a matter of principle”; “You’re giving up too early”; “It’s not fair” etc. She was ultimately helped to settle legally by a personal written risk analysis, minimal ongoing settlement obligations, and some small concessions to help persuade her disappointed constituents.
Thirdly, a negotiator or representative at a negotiation or mediation may have “reasonable outcome” authority. That is, (s)he has either legal and/or persuasive power to enter into agreement so long as its terms come within a pre-defined range. The range is predetermined by a legal document, conversations with constituents or the perceived current approval of (a majority of? powerful members of?) his/her tribe. Often tribes, head office, constituents or family members give negotiators a limited band of authority as they define “reasonable outcome” narrowly in their favour or to reflect perceived current “market” rates. Therefore, it becomes important to know whether the negotiator also has a measure of persuasive authority so that (s)he can convince the reluctant tribal groups, with skill and moral courage, to expand their narrow band of acceptable outcomes.
For example, when dealing with an experienced insurance adjuster in personal injury negotiations, it is normal for him/her to have clear legal authority to settle to the limit of the claim and reasonable (dollar) outcome authority. Experience and courage also give him/her considerable persuasive authority with head office if the settlement moves towards unusually high dollar amounts, and/or unusual mixes of apology, physiotherapy, nursing assistance, and building of wheelchair-friendly facilities.
There are now many statutes and rules of court which require that where a court orders a mediation, then each disputant must send a representative who has “authority to settle” to that mandatory meeting.
Likewise, some case-law interpreting the possible and fluctuating meanings of “good faith” in negotiations and mediation has predictably required attendance by representatives with “authority to settle”.
These statutes and case-law do not resolve the general question of what to do about influential outsiders. However, they do create some extra pressure in mandatory mediation situations where a party sends along a clerk or lawyer who blatantly has no legal authority to sign a settlement. Of course, even if a representative has express written authority from an outside group or organization, this does not mean that the representative will sign unless the settlement is within a range approved by tribal members. “Legal” authority to sign a piece of paper does not necessarily include “persuasive” or “reasonable outcome” authority.
Thus the question of “Do you have authority to settle?” is too simplistic to be helpful in many types of disputes. The word “authority” has too many possible meanings. The three possible answers: yes”; “no”; or “it depends” are all only partially true. Moreover, three further important qualifications need to be made. A negotiator or mediator may:
How can a mediator or negotiator respond when (s)he knows or suspects that there is limited “authority” (in whatever sense) to settle?
Two vital tasks for any mediator or negotiator is to identify:
R.J. Lewicki, D.M. Saunders, J.W. Minton, Essentials of Negotiation (1997) Ch 9;
B. Mayer “The Dynamics of Power in Mediation and Negotiation” (1987) 16 Mediation Q 75;
J H Wade “Forms of Power in Family Mediation and Negotiation” (1994) 8 Australian J of Family Law 40
Uniform Civil Procedure Rules (Queensland) r.326(2) “The mediator may decide whether a party may be represented at the mediation and, if so, by whom”; Alabama Civil Court Mediation Rules, rule 6 (2003): [S]omeone with authority to settle those issues must be present at the mediation session or reasonably available to authorize settlement during the mediation session; Northern District of California ADR Local Rules 6-9 (2) (2003): “A unit or agency of government satisfies this attendance requirement [at mediation] if represented by a person who has, to the greatest extent feasible authority to settle, and who is knowledgeable about the facts of the case…”; Florida Rules of Civil Procedure, Rule 1.720 (b) (2003) “[U]nless stipulated by the parties, a party is deemed to appear at a mediation conference if the following persons are physically present: (1) The party or its representative having full authority to settle without further consultation…” (3) “A representative of the insurance carrier who is not such carrier’s outside counsel and who has full authority to settle up to the amount of the plaintiff’s last demand on policy limits, whichever is less, without further consultation.”
eg J. Lande, “Using Dispute System Design Methods to Promote Good-Faith Participation in Court-Connected Mediation Programs” (2002) 50 UCLA L. Rev 69; Native Title Act 1993 (Cth) s.24NA; Western Australia v Taylor (1996) 134 FLR 211 (“good faith” obligations are more onerous in native title disputes than in commercial disputes); K. Kovacs, “Good Faith in Mediation – Requested Recommended, or Required? A New Ethic” (1997) 38 S. Texas L. Rev 575.
A “hawk” is a competitive member of a group who has a clear solution as a goal which is perceived as “winning”, and who is prepared to engage in contentious tactics, sometimes including violence, in order to “win” in the short term. A “dove” is a person whose major goal is peace and non-violence, achieved by peaceful methods including yielding, even if achieved at short- term costs. A “moderate” is a person whose goal is to find a solution acceptable to all disputants and interest groups, by a combination of mild contentious tactics, negotiation, face-saving and compromise.
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