From the Blog of Phyllis G. Pollack.
A recurring issue in mediation is settlement authority: a party (or an attorney) attending the mediation has to make a telephone call to someone located someplace else – often in another part of the country – to wrest more money from her company (who is the defendant) to meet the settlement demand and resolve the case. Or, if the issue is attorney’s fees, it is the associate telephoning her boss to gain permission to reduce the fees by a sufficient amount to make the amount being offered by the other side – workable and thus resolve the matter.
Sometimes the telephone call works and sometimes it does not. It is those instances in which the telephone calls does not work that provides food for thought. While everyone agrees that mediations are to be governed by the principles of voluntary participation and self-determination (see, Model Standards of Conduct for Mediators (Sept. 2005) prepared jointly by AAA, ABA and ACR, Standard I (Self-Determination), and California Rules of Court, Rule 3.853), at the same time, courts require that all parties and attorneys of record attend the mediation session unless excused or permitted to attend by telephone and that they have “full authority to settle the case.” (U.S. District Court, Central District of California, Local Rule 16.15.5(b); see also, California Rules of Court, Rule 3.874).
These two rules sort of create a conflict in that they seemingly require the CEO or other high-ranking individual within a company to involuntarily attend a voluntary proceeding because she is the sole person with full settlement authority: the “buck stops with” her and so she is the one who must attend.
This is, obviously, impractical, especially for a multi-national company. The high-ranking employee with the ultimate settlement authority cannot physically attend every mediation throughout the world. So. . . the high-ranking official designates lower level employees to attend in her stead, providing them with only a limited monetary amount of authority and then requiring a telephone call asking for more, after that. Several levels of authority may exist so that the employee attending the mediation may have to call her boss’s boss for even more authority, and so forth up the chain. . . to the ultimate boss.
So while in an ideal world – or in the Garden of Eden – everyone attending the mediation has the “full authority” to settle the case, in the real world of multi-national corporations, it rarely occurs: every employee has a boss that must be called with a request for more money to settle the case.
And the poor plaintiff – she finds this all rather frustrating. She comes to mediation with the hope of settling, thinking that the person sitting across from her has the “full authority” to settle her case. Two or three hours later, the plaintiff may come to learn – depending upon how candid the other party or counsel wants to be – that it is actually someone else in another city calling the shots. That person, by simply looking at a cold hard file and not anything plaintiff has said or any emotions displayed – evaluates the case, placing a value on it, not based on plaintiff’s plight per se, but rather on budget constraints, risk analysis (i.e. chances of winning at trial), setting of precedents and other non-individualistic concerns. Worse yet, the employee representative at the mediation may plead and beg with her boss over the telephone for more money, basing her plea on her assessment of the plaintiff and her plight gleaned from the joint session. The employee truly sees the plaintiff as a real person, with hopes and dreams that were dashed by her employer’s alleged acts or omissions. She is “in the moment.” But her boss – at the other end of the phone – is not and overrides her plea for more money. Her boss is simply looking at a file, making cold hard analytical decisions, impersonal in nature. (And the sad truth is that if even if the plaintiff is told that the employee “went to bat” for her, pleading for more money from her boss, the plaintiff will probably neither believe nor appreciate it, and certainly will not be satisfied with the negative result.)
It is almost as if the plaintiff is just another cog in the wheel, another widget rolling off the assembly line. It is a question of economics; nothing more and nothing else.
Is this “fair?” “Just?” Or “proper?” (Query: how do we even define these terms?) Is this really what “mediation” is all about: economics and a “numbers” game?
I hope not. I hope that it is about people and relationships and repairing those relationships. While everyone in a dispute is quick to disclaim that the dispute is about money, in truth, it is always about money, but it is also always about the relationship. Everyone wants to be acknowledged and respected. (See, Roger Fisher and Daniel Shapiro, Beyond Reason: Using Emotions as you Negotiate (Viking Adult 2005)).
So. . . here we are – at a mediation in which the plaintiff – an individual – is attending hoping to settle and a defendant corporation represented by an employee “with full settlement authority” who, in truth, must telephone her boss, or even her boss’s boss, to obtain more funds with which to settle. If the boss says “yes,” all goes well; if she says “no,” the plaintiff is angry and feels disrespected; she had to show up in person! Why didn’t the ultimate decision maker have to show up, and personally sit across from her in a joint session and listen to her plight and tale of woe? She now feels taken for a fool, and used. Now, she is even more angry and feels even more mistreated by the defendant than when she filed the lawsuit!
The ideal world clashes with the practical one. I do not know who is the winner; I do not even know if there is a winner. But it is a clash that I see played out just about every time I conduct a mediation. . . and I have yet to figure out how to resolve it. In truth, I do not know if I can because of the over-arching principles of self-determination and voluntary participation.
The parties pick and chose their mediation: it is theirs, not mine!
. . . Just something to think about.
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