Mediation and “Bad Faith” Bargaining

Mom buys fish for dinner
I remember, during my mediation training, asking for a clear definition of “bargaining in bad faith” and being disappointed not to receive one. Having now myself done a little research I can understand why the concept is so hard to define, despite many people’s claim to “know it when they see it.”

Most of the legal discussions of bad faith bargaining that I have seen come from the area of labour relations. For example, the Alberta Labour Relations Board advises that, “parties must make every reasonable effort” to reach an agreement. They also list some examples of bad faith bargaining techniques, including refusing to meet the other party, refusing to respect the other party’s representatives, reactivating proposals that have already been settled, adding new areas of discussion late in the dispute, and “surface bargaining.” I would guess that “surface bargaining” is what most people have in mind when they think of bad faith bargaining. It is basically a form of stalling. In surface bargaining one of the parties “goes through the motions” of bargaining, but has no intention of ever coming to an agreement. The BC Labour Relations Board defines bad faith bargaining somewhat more strictly, saying that it is the “deliberate strategy by either party to prevent reaching an agreement.”

Bargaining in bad faith is not the same as “hard” bargaining, but the two can be very difficult to tell apart in practice. Imagine a dispute in which party “A” has made what they consider a reasonable offer to settle. Party “B” refuses to accept it and has not moved very far from their opening position. Did party B never intend to settle, or are they simply convinced that party A’s offer isn’t yet good enough? How would a mediator (or anyone else) be able to tell, short of a private confession by party B? Or imagine a dispute in which party A spends a lot of time going over relatively trivial yet highly detailed matters. Is party A deliberately stalling, or taking reasonable care to protect their interests? And who is to say what counts as a “trivial” issue?

Yet despite the difficulties in characterizing bad faith bargaining, it represents a real problem for mediators and for the mediation process. It is a particularly troubling possibility when one of the parties has greater resources (time, money) than the other. The more powerful party can stall, drawing out the process and using up the other party’s time and money. When the mediation process is declared a failure, the stronger party is in an even more favourable position. The weaker party, having depleted their resources, may agree to an unreasonable offer because they no longer have the money to defend their rights in court.

What should you do as a mediator if you suspect that one of the parties is bargaining in bad faith? I don’t think that there is any way to be sure that parties intend or do not intend to come to an agreement, and it is important not to jump to conclusions. If one of the parties won’t move from what looks like an unreasonable position, try to find out why. Their view of the dispute may be such that their own position is reasonable. How does it differ from your view, and from the other party’s view? But there may come a point in a mediation when the mediator begins to suspect that the process is not serving either party and that prolonging it would not be a good use of their time or money. In this event, the best thing for the mediator to do may be to explain their concerns and then exercise their right to end the mediation.

What to Look for in a Mediator

My friend Valerie says that there is a mediator out there for everyone. With so many mediators to choose from and so many different approaches, how can you find the right mediator for you? Mediation is a confidential process, so it’s unlikely that you’ll be able to see a particular mediator in action before hiring. You can ask around or look for reviews on the internet, but that won’t necessarily lead you to the right person for your conflict. Even the mediator who helped your best friend won’t automatically be the best one for you.

Whatever qualities you feel are important in a mediator, probably the best place to start is with the professional association of mediators in your area. In Toronto, that would be the Alternative Dispute Resolution Institute of Ontario. A mediator who belongs to such an organization has made a commitment to the profession and to professional development. Depending on the rules of the organization, he or she will have been educated about the causes and dynamics of conflict, and about different approaches to conflict resolution. If you are looking for a mediator to help you facilitate a separation agreement or divorce, you should look for someone who has had training in family mediation. Such training usually includes an over-view of the relevant family laws. Of course, a mediator can inform you about the law but ordinarily will not (and should not) offer legal advice.

Very broadly speaking, the main difference among mediators is whether they take an evaluative or a more facilitative approach. Mediators who are strongly evaluative will not hesitate to tell you their views on your dispute and what they think an appropriate resolution would be. Mediators who are more towards the facilitative end of the spectrum may offer suggestions to help you solve specific problems, but their focus will be on helping the parties in the dispute arrive at their own resolutions. The thinking behind this approach is that the parties involved are likely the most knowledgeable about the details of their own situation and so the best equipped to come up with durable solutions. There is also a good deal of evidence that people are more likely to respect agreements that they themselves have had a hand in crafting, rather than settlements that have been foisted upon them.

It is perfectly acceptable (and probably a good idea) before you hire a mediator to ask about their training and about their style and approach. Whatever the nature of your conflict, it is crucial that you feel comfortable with the mediator and can develop a sense of trust. Even over the phone, you should have the feeling that the mediator is really listening to you, not just waiting for you to stop talking. It is very important that a mediator give the impression of being impartial about your conflict from the beginning. He or she will listen sympathetically but will not readily take your side no matter how compellingly you present it. Don’t be disappointed about this. While it is understandable that you would want an ally in an emotionally charged situation, do not try to put a mediator into that role. Mediators are able to do a better job in the end if all parties respect them as neutral in the dispute.

The Alternative Dispute Resolution Institute of Ontario currently has about 850 members. Whether your conflict involves a business, family members, co-workers, or the whole neighbourhood, one of them will be the right person to help you.

When to hire a mediator (rather than do nothing)?

People often ask me in what circumstances they would need a mediator. Mediators are experts in conflict resolution, and mediators work in many different settings. There are mediators on the international stage, mediators in family courts, schools, workplaces, prisons, and out on the streets. But when should you hire a mediator rather than doing nothing? I think that there are two basic factors:

1. A decision needs to be made.
2. Something of value is at stake.

Let me explain: We all have conflicts with others. Many of these, thankfully, have little effect on our daily lives. We can avoid the neighbour whose early morning leaf-blower is a weekly annoyance. We can change the subject when our brother-in-law brings up politics or the economy. We can agree to disagree with the other parents in the playground when the topic of our children’s “screen time” comes up. But sometimes we have to co-ordinate and work together with others and conflict becomes unavoidable. And sometimes, despite conflict and differences of opinion, decisions have to be made. For example, will the children of divorced parents spend the weekends with their father or mother? Will they continue to attend the neighbourhood school or transfer to a private school? Where will they spend the holidays? Who will be in charge of their religious instruction?

It isn’t only divorced couples who need to make decisions together. Mediators also work with couples who plan to marry, to help them frankly discuss and then plan for the financial and “business” aspects of their relationship. They help married couples who plan to stay together, but need assistance to communicate effectively. And a whole range of potential conflicts can arise among adult siblings. When an elderly parent can no longer live independently, who will decide the best course of action? Who will take away grandpa’s car keys if his driving is putting others at risk? What is to be done if the family farm or business is no longer viable in its present form?

What all of these different situations share is that a decision needs to be made, and there is something of value at stake. The question of what counts as “something of value” is in the end a personal matter. I’ve seen families nearly torn apart over the issue of who will host Christmas dinner! While this isn’t something that I personally would seek help with, I know others for whom a couple of hours with a mediator to resolve this issue would be a sound investment in future family relations and personal happiness.

In general the cost of mediating a particular conflict can be weighed against the cost of doing nothing. Sometimes, if we’re fortunate, the cost of doing nothing is low. But the costs of inaction and indecision are sometimes very high. Failing to act can allow conflict to fester and can end up costing as much or more than taking action. And it has to be remembered that the costs of many conflicts are both financial and emotional – with the emotional costs being much harder to calculate.

Conflicts that Should have been Mediated: (1) The Judge’s Dog

Every now and then I hear about a conflict that wasn’t mediated but should have been. Mediation would have saved the participants time, money and aggravation.

Judge Beatrice Bolton and the Malia family had been neighbours in the north of England for years when the judge acquired an Alsatian puppy. I don’t know how exactly it all started, but the Malias and Georgina, the dog, did not hit it off. The family say that they lived “in terror” of the dog, and demanded that Judge Bolton keep her chained up. Apparently the police were called several times, and the Malias resorted to installing CCTV on their property and keeping a “dog log” of incidents. The conflict came to a head at the end of May, when Georgina bit the Malias’ son, Frederick, who was home visiting from university. The bite did not require medical attention; the judge apologized. On December 13, 2010 she was convicted of allowing her dog to enter a private area where there was a “reasonable apprehension” that it would bite someone. She was fined £2500 and ordered to pay £275 to Frederick, £930 in court costs, and a £15 victim surcharge. The case has received a fair amount of press coverage in the UK because the judge was heard swearing loudly (calling the decision “a f****** travesty”) outside the courtroom after the verdict. She was also heard to yell, “I’ll never set foot in a court again!”

I know about the case only what I’ve read in published reports and many details are hazy. Judge Bolton’s legal counsel said that relations between the neighbours had deteriorated before and since the dog attack. At some point, Judge Bolton had attempted to mend the relationship by offering to introduce the dog to the Malias and to build a fence between the properties, but the Malias had refused both. It isn’t clear why the Malias refused the fence, and it isn’t clear whether the Judge allowed her dog to run free or whether she simply lost control of it on the day it bit Frederick.

The Judge plans to appeal the decision and is “considering her future.” Her behaviour outside of the courtroom will be referred to the Office for Judicial Complaints. Georgina the dog is being trained. The Malias have the satisfaction of having been vindicated in court; their son will live with what must be a frightening memory. Relations between the neighbours can hardly be comfortable.

Reading about the case, I wondered whether the police, on any of their numerous visits, had suggested mediation. A mediator would probably have met separately with both parties. (A meeting with Georgina the dog would be strictly optional.) He or she would have asked some probing questions to better understand the situation. Why did the judge acquire a dog? For companionship? For protection? What did the dog mean to her? What were her long-range plans with regard to training the dog? Why were the Malias afraid of the dog? What kinds of previous experiences with dogs, good and bad, had either of them had? Why did they refuse the Judge’s offer to build a fence? Depending on the answers, the mediator might shift strategy and ask questions that would help each party to start thinking about the situation from a different perspective: Had the judge ever considered what might happen if her dog bit someone? Did the Malias think a large playful dog would be content to be chained up for long stretches of time? Had they ever heard of a situation in which a dog-owner gave up their pet at the neighbours’ behest?

At some point, the mediator would have probably got the two parties to sit down together and listen to one another. Judge Bolton would hear about the Malias’ fear of Georgina and how having a dog next door affected their lives. The Malias would hear about Judge Bolton’s affection for the dog, and her hope for continued good relations with them. Then the mediator would move the parties towards thinking about the future. How could they ensure that the Malias didn’t have to live in fear of the dog, while at the same time allowing the Judge to care for her pet in the most suitable fashion? While it wouldn’t be easy or necessarily quick, the parties working together with the mediator would likely be able to come to a solution. All for much less than the price of CCTV installation.

A final note: As a North American, I found it a little dismaying that both the Daily Mail and the Telegraph felt necessary to refer to Judge Bolton as a “woman judge.” (Anyone not sure why might check out this nice posting on gratuitous modifiers.)

Mediation as a Substitute for Justice?

“Mediation is a complement to justice. It cannot ever be a substitute for justice.”

These are the final words of the Gordon Slynn Memorial Lecture 2010, given by Lord Neuberger of Abbotsbury, the Master of the Rolls. (The “Master of the Rolls” is the Monty-Pythonesque title given to the second most senior judge in England and Wales. He is the presiding officer of the Court of Appeal, Civil Division.)

Lord Neuberger assures his audience that he is a “keen supporter” of ADR; his worry is that the tendency to treat mediation as good and litigation as bad may be inconsistent with a commitment to equal access to justice. His argument goes like this: Equal access to the law is a fundamental component of democracy. The civil justice system is not merely a service offered in the marketplace; to regard it as such is to misinterpret its constitutional function. Mediation and ADR, in contrast, are not part of the state; they are services offered to those in dispute. To insist that disputants try mediation before litigation places an additional financial barrier to the justice system, thus compromising the principle of equal access to the courts. Disputants may accept a mediated solution that does not reflect their legal rights because they cannot afford both to mediate and to litigate.

Lord Neuberger gave this lecture on November 10, just days before the British government announced cuts to legal aid for civil cases and increased support for mediation and ADR. His remarks have to be interpreted in light of the current political situation in the U.K.

What does Lord Neuberger mean when he claims that mediation is not a “substitute” for justice? It sounds like he means that mediation is something different from and inferior to justice, the way a baker might caution one that nutrasweet or sucralose would not be adequate substitutes for sugar in the chocolate chip cookie recipe. And I fear that this is the meaning that will be assumed by those who hear this remark out of context and fail to read his entire lecture. I think it is fair to say that Lord Neuberger means that ADR is not a substitute for the justice system. He is using the word “justice” to mean something like “those decisions that are handed down formally through the legal system.” Now, while it is legitimate to use the word “justice” in such a way, this is probably not the meaning that most people have in mind when they use the word. We allow for the possibility that certain laws may be unjust and that the administration of the law itself may be unjust. Of course, Lord Neuberger recognizes this too. He even quotes Sir James Mathew’s ironic remark that, “In England, justice is open to all – like the Ritz Hotel.” Yet while Lord Neuberger acknowledges that equal access to the law is far from being a reality, I don’t think he makes enough of existing barriers – ones that have nothing to do with the proposed expansion of ADR.

No one would disagree that mediation is not a substitute for the civil justice system. Even the most enthusiastic ADR supporters recognize that some disputes are inappropriate for mediation. There are other reasons why “mediation” and “justice” should not be opposed to one another. Justice can be a quality of processes or of outcomes. Mediation and litigation are both processes of dispute resolution. As such, each can be conducted fairly (justly) or not. Litigation and the formal legal system do not have a monopoly on fairness. Similarly, the outcomes of either of these processes might be fair or not. The fact that a settlement has been voluntarily assumed or forced upon disputants does not tell us whether or not it is fair. Finally, mediation and the legal system need not be seen as in competition with one another. A mediated settlement may be formalized as a contract, a document with the power of the courts behind it.

Read This….. or Else

Ontario Superior Court Justice David Price has ordered an estranged couple to read three books on communication and parenting and to report back to him on what they have learned at their next court appearance. The books are: Difficult Conversations by Douglas Stone, Bruce Patton and Sheila Heen; Parenting After Divorce, by Philip M. Stahl; and Parenting from the Inside Out, by Daniel J. Siegel and Mary Hartzell.

As an educator, I’m a little uncomfortable with anything that might smack of reading as punishment. Family lawyers contacted by The Toronto Star and The National Post noted that the ruling was unusual and disagreed as to whether the “homework” assignment would have its desired outcome.

It is not difficult to understand why Justice Price might be frustrated with the couple. Their disagreements – over money and access to their twin sons – seem both intractable and unremarkable. I imagine that similar disputes play out in family courts on a daily basis. The mother is asking for her former husband’s share of the proceeds from their matrimonial home, and to deny him the right to see their children. The father is asking his estranged wife for $12 000 and accuses her of already denying him access to the children. She in turn says that the children are reluctant to see their father; while he seeks to end her sole custody of the boys, and prevent her from taking them for counseling to an abused-children’s group. Along with the reading assignment, the judge ordered the mother to provide make-up days for the denied access, the father to undergo an assessment for alcohol and drug dependency, and for both of them to seek counseling on communicating with one another.

The estranged couple in this case have at least one thing in common: neither was represented by a lawyer. So neither has the financial incentive to settle a case that is provided by the specter of imminent and increasing legal bills.

There are many different ways to solve disputes. When you elect to solve a dispute through litigation, as this couple has, one advantage is that there will be an eventual clear resolution. But going to court means giving up control over the outcome of your dispute, and the resolution imposed by the courts might not be to your liking. Perhaps people lose sight of this possibility, or are simply unable to imagine a court not seeing the situation exactly as they do. So they may refuse to comply with court orders they dislike, only to find themselves back in court. And on it goes. The law is a blunt instrument, as it is often said, and it is interesting to see Justice Price try something new, whether or not his measures have their desired effect. Just as a good mediator might, the judge is appealing to the couple’s better instincts, and trying to get them to see that they have a shared interest in the well-being of their children, and that they may even continue to share some important values related to their children’s upbringing.

There is also the slightest hint of public shaming in the judge’s order. In demanding that the couple read up on parenting, the judge makes a clear statement as to what he thinks of their behaviour and their parenting skills up to now. It can be uncomfortable to realize how others see us, but it might be the beginning of some positive change.

Is "Mandatory Mediation" an Oxymoron?

One of the first principles impressed upon us in mediation training was that mediation is a voluntary process. The parties in a dispute come to mediation voluntarily and may leave it when they desire. But in several jurisdictions, including Ontario, mediation is now mandatory for certain types of civil disputes. What are the consequences when a process that is thought to work best if voluntary is made compulsory?

First, it should be noted that the regulations in Ontario commit disputants only to a good-faith attempt at a mediated solution. There is no requirement that a settlement be reached. Ideally, in mediation, there should be no pressure on disputants to accept a settlement that they do not feel is in their best interests. (That is why the ADR Institute of Canada Code of Conduct specifies that mediators must not base their fees on whether a settlement is reached, or the amount of any settlement. The mediator should not have a financial interest in getting either party to accept a settlement.) If mandatory mediation fails to resolve a dispute, then the parties involved meet again in court. The fact that mediation was attempted and failed is not supposed to be held against them.

Mandatory mediation has definite drawbacks. Mediation’s distinctive character may be compromised as it becomes more and more a part of the “official” system. People compelled to mediate may not be as motivated to make a real attempt to solve their dispute. They might feel less of a sense of ownership in the process and in any resolutions that come out of it. And as most mediators will tell you, mediation isn’t appropriate for every dispute or for every individual. If someone wants to maintain a reputation for never settling disputes out of court, or to establish a legal precedent, the only way to do so is through litigation.

My own view is that the disadvantages of mandatory mediation are liable to be over-stated. The fact that a process has been mandated by the courts does not mean that it is doomed to fail. Indeed, mandatory mediation of civil cases in Ontario has a decent success rate, with over half of the disputes settled or at least partially settled. The relationship between voluntary action and commitment is probably more complicated than we realize. After all, people voluntarily enter into marriages that they later voluntarily leave; they voluntarily quit jobs that they have voluntarily taken on. A good mediator will try to overcome disputants’ resistance to the process, and help them see that giving the mediation process a try is probably in their best interest.

There are good reasons to favour mandatory mediation, at least for some kinds of conflicts. If a dispute can be settled out of court, the costs are likely to be significantly less, both for the parties involved and for society as a whole. It is easy to forget that the administration of the legal system is a cost borne by all taxpayers, not just those involved in disputes. Mandatory mediation might increase awareness of mediation, so that people come to think of mediation as a way to solve disputes even before they consider going to court. Finally, parties in mediation are working together to solve their disputes; parties in litigation are adversaries. A little more cooperation and a little less antagonism might be better for everyone.

A Challenge to Confidentiality in Mediation?

Confidentiality is a basic principle of mediation. But what is to be done when it is used as a weapon in a dispute? This is the question that judges in California will have to decide.

The case at issue is the high-profile divorce of Elon and Justine Musk. Mr Musk is one of the founders of PayPal, and a very wealthy man. The couple have five children, and the main point of disagreement yet to be resolved is the level of support to which Ms Musk is entitled. Their dispute hinges on a post-nuptial agreement that Ms Musk signed in the early days of the marriage, and which she describes as “very harsh.” The agreement was reached by mediation, and so the negotiations leading up to it are confidential. At the same time that the couple was negotiating their agreement, Elon Musk was also in talks regarding the merger of his company, which eventually became PayPal. The merger raised the value of his stocks in by millions of dollars more than was reported in the post-nuptial agreement. It is not clear whether this was an oversight or a deliberate omission.

The fact that the agreement was signed after the couple married is significant, as married couples have a “fiduciary duty” to one another to be honest in their financial dealings. Lawyers from Ms Musk have charged that Mr Musk violated this fiduciary duty. His lawyers have argued that, since the agreement was mediated, and therefore confidential, Ms Musk has no right to challenge it. In order to defend himself against the charge of fraud Mr Musk would have to discuss his actions during the negotiation, the very period which is subject to confidentiality. In July, when lawyers for both sides presented their arguments before the court, the judge praised them for “excellent lawyering,” declared a “non suit,” and certified the case for appeal. A verdict from the California Court of Appeal could take a year or two. The two underlying legal principles in the case – mediation confidentiality and marital fiduciary duty – have not before been set in opposition to one another.

Reading about this case, I was reminded of the old adage that, “hard cases make bad law.” Confidentiality is important to mediators and to many other professionals, for a variety of reasons. Some of the reasons for mediation confidentiality are instrumental; that is, the presumption of confidentiality helps mediators to get parties in a dispute to speak frankly, and this is turn helps to keep negotiations focused on the parties’ interests. In this way mediation confidentiality is similar to the confidentiality between lawyers and their clients. A full and frank disclosure helps lawyers to present the best possible defense. Yet there are also intrinsically moral reasons for the presumption of mediation confidentiality. Parties in a dispute are entitled to their privacy and the right not to have sensitive information disclosed by third parties. In this way, a mediator’s duty to respect confidentiality of parties in a dispute is similar to the duties of confidentiality observed by doctors and therapists.

Justine Musk has harsh words for mediation. She writes: “When someone hustles you into mediation, and you yourself are a loving trusting naif without any business or financial experience who has never heard the word ‘mediation’ before, they can basically rape and murder you (figuratively speaking, of course) and get away with it, because it’s all confidential.” Reading her account of these events (both in her blog postings and comments, and in the October 2010 issue of Marie Claire), I was left with many unanswered questions. The negotiations began before the couple were married, and Ms Musk gives the impression that the lawyer who mediated the agreement was engaged by Mr Musk. (The ADR Institute of Canada National Mediation Rules prohibit a mediator from acting for any of the parties individually, unless all of the parties consent after full disclosure. Mediators are supposed to be independent and impartial.) Neither is it clear whether the couple’s mediator advised Ms Musk to seek independent legal advice.

Whatever the outcome of this dispute, mediators in California and elsewhere will be eager to hear the judges’ decision and their reasoning.

Should Mediators be Regulated?

When I began my mediation training, friends and family often asked, “Will you be qualified after finishing this course?” I had to tell them that, as mediation is a non-regulated profession, what it means to be “qualified” is not easy to determine. There is no equivalent in mediation of the bar admissions test that lawyers write, for example. Mediation is not regulated in Canada, in any U.S. state, nor in the U.K. Is mediation’s informal nature good or bad? Would it be better if mediators were subject to some kind of legal control?

There are reasons to think that regulation might be good for both mediators and their clients. Having some set of standards would assure consumers that their mediator had at least minimal qualifications, and perhaps familiarity with a specific area of law. In the area of family and civil mediation, where negotiations take place “in the shadow of the law,” some understanding of background law seems especially pertinent. The Law Commission of Ontario, in their recent report, “Voices from a Broken Family Justice System,” say that some of their informants expressed concern about mediators’ qualifications and about the regulation of mediation more generally. (I’m looking forward to reading the Commission’s recommendations, due to be released in November.) Regulation of mediation and of mediators’ qualifications might increase public confidence in the process of mediation, which would be good for everyone, consumers and mediators alike.

Yet there are good reasons to resist calls for greater regulation. For one thing, minimum standards of qualification do not guarantee excellence or aptitude. Legal standards of qualification have not protected the public from bad teachers, doctors, or lawyers. Indeed, the Law Commission’s report on the family justice system is full of complaints about lawyers and judges. Furthermore, while some lawyers also practice as mediators, mediators and lawyers generally offer different kinds of skills and have different roles in solving disputes. Mediators should not be seen as little more than a cheaper alternative to lawyers – the “Walmart” of the legal system, if you will. Making mediation a more official part of the legal system might threaten its distinctive character.

There are other ways, besides legal regulation, to increase acceptance of mediation and protect the public. A good mediator will advise the parties in mediation to seek an independent legal opinion before signing a mediated agreement. The process of mediation is “without prejudice,” meaning that if one party is unhappy with a mediated settlement, he or she still has the option of attempting to resolve the dispute through litigation. For family disputes, the Ministry of the Attorney General encourages people to choose mediators who meet the standards set by the Ontario Association for Family Mediation. These include specialized courses in family mediation, family law, and domestic violence, as well as a hundred hour internship with an accredited mediator. People looking for mediators for other types of disputes can check whether prospective mediators belong to a professional organization, such as ADR Institute of Ontario.

Finally, mediation is done in all kinds of contexts by all kinds of people. It is part of the job description for professions as diverse as clergy, real estate agents, municipal politicians and human resource professionals, as well as being practiced informally by community leaders and elders in different neighbourhoods all over Canada. Mandating the same training and requirements for all of these would not be practical or desirable.