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Mediator in Chief

In the budget negotiations going on in Congress, once again we see the president assuming the role of mediator. Republican leaders in particular, while remaining adamant that they will not compromise on their position of keeping tax increases off the table, have lately almost been begging for the president’s intervention to break the impasse. The Republican leaders sound to me like some of the lawyers I sometimes see representing an intransigent side in settlement negotiations. They know they have to make a deal, but they or their clients have boxed themselves into an untenable position. They need the mediator to “force” them to make a deal.

Today President Obama gave a statement to the press seeming to ride to the rescue of these locked-in negotiators. His statement was chock full of mediator talk. All of his exhortations were designed to move the parties from entrenched positions. First he said both parties must seize the moment, and take advantage of a chance to do something historic. Right now, the president stressed, the parties have a unique opportunity to do something big. That is the kind of “now or never” statement a mediator might make to parties late in the afternoon after everyone has already invested a lot of time in the negotiations but remain frozen in their positions. If the mediator can persuade the parties that NOW is the moment to do something dramatic, and that if they allow the moment to pass, they may never settle, sometimes that induces one side or the other to make a dramatic leap.

The president also asked both sides in the negotiations to get out of their “comfort zones.” Often a settlement cannot be reached until both sides realize that the zone of settlement is outside the range that both parties came prepared to deal in. In a straightforward litigated case, for example, the defendant might come to the mediation with authority to pay up to $50,000 to settle the case. The plaintiff might come with the idea that they would take nothing less than $100,000. It often takes some time for both parties to understand what their own comfort zone is and just as importantly, the zone of comfort of the other side. It also takes some time for parties to get invested enough in the mediation process that they both want to settle the dispute. At that point, the mediator might tell the parties that if the case is going to settle, it is going to settle for a number somewhere between $50,000 and $100,000. Once both parties understand that they are both being asked to cross a line that neither wanted to cross, and once they both cross their respective lines, the case should settle somewhere in that range, which is beyond what both sides were prepared to offer. Likewise, in the budget negotiations, the president is telling both sides that they are going to have to find a way to give on points that they previously said were inviolate. Meaning that the Republicans should be prepared to accept some revenue increases as part of a deal, and the Democrats should be prepared to accept some cuts to cherished programs like Medicare. Once both sides have crossed their respective lines, that also makes the resulting deal easier to sell to each side’s constituents, because they can tell their constituents that they got something valuable in return for their concessions.

Finally, the president’s message advises both sides to leave their ultimatums and their rhetoric at the door. The parties are running out of time to complete these negotiations. They do not have the luxury of engaging in posturing and threats. At this point, both sides should understand what the outlines of a deal should look like, and they both have to decide that they would rather make a deal than try to blame the other side for the disaster that might follow if they do not make a deal. If both parties are still at the table, that must be because both want to make a deal. Anyone who makes a threat or ultimatum at this late stage of the negotiations has to understand that they might be killing the deal by doing that. That means the time for those kinds of tactics is past. The president is saying that if the parties are still willing to participate on these terms, they are walking into these end-stage negotiations with the expectation that they are going to come out with a deal, and they already pretty much know what the deal is.


Joe Markowitz

Joseph C. Markowitz has over 30 years of experience as a business trial lawyer.  He has represented clients ranging from individuals and small businesses to Fortune 500 corporations.  He started practicing with a boutique litigation firm in New York City, then was a partner in a large international firm both… MORE >

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