The Master Mediator, Third Installment, The Mediator as Arbitrager: Asymmetry in Action (Web)
July 1, 2008
This is the third installment of The Master Mediator, a CPR web column featuring commentary by Robert A. Creo, describing and discussing mediation room techniques and practice issues.
The Mediator as Arbitrager: Asymmetry in Action
Arbitraging involves the process of a person taking an advantage of a difference in market prices to broker an immediate deal between a buyer and seller. Webster defines arbitraging as:
The purchase of securities on one market for immediate resale on another market in order to profit from a price discrepancy.
The almost simultaneous purchase and sale of a commodity or stock means that the arbitrager holds title a minimum amount of time. The arbitrager takes advantage of asymmetrical information to serve as an honest broker to complete a transaction.
My thesis is that a skilled mediator is a kin folk of a skilled arbitrager. Arbitrators conduct symmetrical processes based upon the same information being known to everyone and conveyed in a transparent manner. Mediators do not, and should not, be confused with adjudicators.
Mediation usually is an asymmetrical process based upon multiple factors. Asymmetrical dynamics or paradigms may include, among other elements, in no particular order:
1) One party--usually the defendants--often are repeat players in the legal system, or manage a book of business risks or disputes.
2) The dispute for the plaintiffs, especially tort and employment claimants, usually is 100% of their court docket and/or experience with the legal system.
3) Repeat players, including counsel, benchmark against other cases; consistency, predictability, and uniformity often are the repeat players’ core values.
4) Participants may have different perspectives and expectations of the processing of legal claims via the courts.
5) The defendants’ proposals involve real dollars. The plaintiffs’ demands involve abstract sums, goals or aspirations, and not relief in present, real time. Traditional negotiation frames recognize this by nomenclatures of “demand” and “offer.”
6) One of the parties, usually claimants, may have suffered “personal trauma” that forms the basis of the claim; this may involve a personal injury, business or economic disruption or a perceived grievance involving their personal self-esteem or public reputation. The other participants’ key interests may be “impersonal” and involve primarily economic impact. In short, one party may be making a personal decision with profound consequences while others are involved in a business transaction.
7) There may be a real or perceived power imbalance among participants.
8) Participants have different risk tolerances and view risk in a unique, individualistic manner. Risk tolerance is fluid, contextual and situational.
9) Participant preparation for the mediation, and their experiences, expectations and attitudes about the process differ from each other.
10) Participants process information and make decisions with different cognitive preferences and biases. For example, see R. Lisle Baker, “Using Insights About Perception and Judgment from the Myers-Briggs Type Indicator Instrument as an Aid to Mediation,” 9 Harvard Negotiation Law Review, 115-186 (Spring 2004). People may make choices in a “non-rational” or other manner inconsistent with classical economic theory that people act to maximize their own self-interest.
11) The number of participants, stakeholders and constituents on each side are uneven.
12) One or more parties may represent public interests, while others act as purely private persons. People may make decisions in a holistic manner. Participants have different levels of authority and power to bring closure.
13) The law may provide additional protections or restrictions on some of the parties based upon their age, competency or other factors.
14) Confidentiality and privacy interests vary among the participants.
15) Counsel and advocates for different parties are compensated pursuant to different methods such as contingent, flat fee, salary, hourly, per diem, and incentives.
16) There almost always is diversity of culture, age, income and other demographics among the participants. This almost always extends to the mediators who may share some, but never all of the demographics with some of the participants.
17) Participants each have their own relationship to time and pacing, especially the mediator.
18) The mediator has different experience with different participants, meeting some for the first time while others are repeat players.
19) The participants have asymmetrical experiences with negotiation and mediation.
20) The mediator may have misaligned or asymmetrical goals with one or more of the participants.
21) Participants submit pre-mediation information and prepare in an asymmetrical manner.
22) Participants communicate at the mediation in an asymmetrical manner.
23) Mediators also communicate in an asymmetrical manner.
24) Mediators use different tools with different participants at different times in the process.
25) Participants have different interests.
26) There is a difference between “retributive” and “restorative” interests and goals of participants, mediators and process. Mediators tend to pressure participants toward choosing restorative interests and goals over retribution.
27) Mediators are not neutral in the sense of an intervener who stands outside the process without permanent impact on the dispute or disputants. Mediators have their own point of view and interests.
Even in a bilateral dispute, mediation is a trilateral process.by Robert A. Creo
The author, a Pittsburgh attorney, is a mediator and arbitrator. He also represents parties in alternative dispute resolution and designs conflict resolution systems. He is a founding member of the International Academy of Mediators (see www.iamed.org), and served as its president between 1997 and 1999. He can be reached at firstname.lastname@example.org. This column features material that the author prepared for the Mediation and Arbitration Professional Systems Inc. Advanced Mediator Training session in New Orleans in April, and material he plans to incorporate into keynote speeches at the September 2005 meeting of the Michigan State Bar Association ADR Section, and the October 2005 Minnesota State Bar Association ADR Institute.