Negotiation Capital

In these tough economic times let’s talk about “capital” – not true dollars, but the currency and capital you use in mediation. Think in terms of “negotiation capital.” I’ve coined this phrase to refer not specifically to the dollars that are exchanged in negotiation, but rather how easy or difficult are the steps in the negotiation. Are folks moving in very small steps early on or large steps? Is it taking a very long time between proposals such that one party is becoming impatient with the process? Has the negotiation taken so long that folks are running out of energy to do the really tough work at the end when a gap in the numbers remains? My sense is that for all of these instances, if it takes a long time for the negotiation to get to the end, then once at the end, there is little “capital” left to bridge whatever gap remains.

I routinely explain to folks at mediation of an injury claim (and most litigated claims) that there are two negotiations. The first, from the defendant (institutional) perspective is based on authority given, reserves set, and market value. From the claimant (individual), it is based on their goal for the negotiation, what they want, what their attorney tells them would be an appropriate settlement. When the respective parties get to these points, there usually remains a difference. I call it the “gap.” As you might imagine, if it only takes 4 steps to get to the gap as opposed to 10, then the participants will have more energy and generally more willingness to keep going and figure out how to bridge the gap.

I encourage folks on both sides to move in larger steps early so that the “pressure” to take a step that will be seen as significant is on the opposing side. Generally, the more one side moves, then the more likely they will also get a significant move from the other side. Of course, rarely do folks match moves; however, the main issue is whether the move is perceived as “good” by the receiving side. When I walk in to a caucus, present a proposal and folks say “that was a good step” then they generally try to do the same.

The point is that if you can get to the gap without spending all your negotiation capital, then you will be ready for the hard work ahead. You’ll be ready for the second negotiation, ready to bridge the gap and get the case settled.

In your next negotiation, consider moving in larger steps early and try to put yourself in the other sides shoes – How will they perceive your move? Remember, you can always slow down later if you want/have/need too. Save your negotiation capital for the second negotiation!

The Power of Getting Back Together

In most mediation of litigated cases, the parties and their attorneys (and us mediators) want to get to the private caucus quickly. These caucuses provide a relatively comfortable space to discuss and analyze the case. It’s where we ask attorneys about their BATNA and WATNA – what’s the best and worst that could happen if the case does not settle at mediation. And, if we are doing our job, we also connect with the individual party and learn more about their needs (as opposed to wants). We know that attorneys will not “honestly” evaluate their case in front of the other side, so we don’t ask in general session. Once this analysis by the participants (with the mediators’ facilitation) is complete we switch to a facilitative negotiation. My query to you – is there ever a time short of settlement when we should get folks back together? I believe the answer is a resounding “Yes” and let me demonstrate with a recent case.

The case was a denied workers’ compensation claim and after our general session we moved to caucus. In caucus, it became clear that the injured worker was very interested in a medical evaluation to find out what was wrong with his back. (His first proposal was for a medical evaluation which was declined by defendant.) Since he didn’t know, the uncertainty presented itself in a settlement demand that the defense found out of the ballpark. We still traded some numbers, but things were not moving to quickly and at some point, plaintiff’s counsel again raised the idea of medical care. The way counsel shared it suggested to me that we get back together or at least get the attorney’s and the claims professional together.

So, I asked plaintiff’s counsel if he would come back to the other room and share his idea that a medical evaluation would provide everyone with needed information, i.e., if the evaluation did not show a serious condition needing surgery, then the plaintiff would be better able to settle the case in a range likely acceptable to the defendant. Or, if a serious condition was found, then both sides would know the extent of potential medical care. I brought counsel together with the claims professional; plaintiff explained their idea in a cordial manner and then I split them up again. After some discussion, the defense agreed. We recessed the mediation to allow for a medical evaluation at defendant’s direction. Now, I still don’t know whether the case will eventually settle or not, but it now has a much better chance as compared to the chances last week.

With this recent experience under my belt, I encourage you to think of ways to get folks back together for a specific purpose in your mediation. As I explain in mediation trainings, when you get folks together there is risk and opportunity. As mediator we must set up for opportunity and manage the risk!

Be The Negotiation Coach !

As I’ve mentioned before, I teach a course “Mediation Theory & Practice” in the UNC Greensboro Masters program in Conflict Resolution, and during a recent mediation role play, I was reminded about our job as “negotiation coaches.” In the mediation, a proposal was framed as either a sum of money or an apology, but not both. The claimant had expressed strong interest in an apology. At this point, the claimant and counsel became focused on the form of the offer, the “either/or” aspect and the mediation slowed. The mediator was able to help move things forward; however, in our debrief, participants noted the challenge around the form of the proposal.

This is where we can play an important role as negotiation coach. We can and should help all participants work through proposals and remind folks that they don’t have to respond exactly in kind to any proposal. While the goal is certainly to get people talking “apples to apples” I believe it’s okay if it doesn’t start out that way. And we can help remind people that they can form their own proposals and don’t just have to respond or react to what has been presented. When people want to make a “different” form of proposal or offer I also encourage them to respond to the initial proposal. I ask them to do both as alternative proposals. My sense is that the more choices people develop, the greater the opportunity becomes to find a settlement range.

So, be the coach at mediation and you might even get a long term contract!

First Impressions

I attended a Memorial Service recently and one participant (let's call her Sally) shared a story about the deceased (let's call him Jim). Sally explained that she first met Jim at a dinner party. Sally was seated, Jim stopped at the chair next to her and then moved to the other side of the table. From then on Sally thought that Jim did not like her and, thus, she avoided contact with him. Sally never got to know Jim. After Jim passed away, Sally learned that Jim had a very bad back and that there were only a few chairs that were comfortable for him. Jim had moved to the other side of the table in search of a better chair. Not to get away from Sally.

This story confirms one aspect of forming first impressions. We use first impressions as a filter and if we believe that someone doesn't like us, then we behave accordingly. We avoid this person and, thus, reinforce the distance and never really get to know the person. And talk about quick. I heard an image consultant recently note that the Millennial generation form first impressions in a second, that Generation X gives folks 30 seconds and Baby Boomers an entire minute.

So, depending upon who you are working with as mediator, your time in which to make a first impression goes from micro quick to a long full minute. You get to "create" your first impression in many ways including how you dress, your facial expression and other body language, and by your tone of voice. If you are already seated in a conference room - do you get up and shake hands? I encourage you to use this time well and remember that the impression you form about another could just be about a chair!

Cool and Crisp

Fall is in the air? It is a cool and crisp October morning. With the change in season, this is a great opportunity to consider your mediation practice. I’ve written before about being a reflective practitioner and with a “chill” in the air – let me ask.

What are you doing to make your mediation’s “cool and crisp?”

Here are some questions for your consideration:

Do you begin your mediation in the same way every time? Do you use the same language? Do you sit in the same place? Do you always ask one “side” to go first? Do you ever engage in cross talk between the participants before going to caucus? Do you ever get participants back together during discussion other than at the end of mediation? Do you take notes at mediation?

The list goes on, as it should, because there are a myriad process choices as mediator. I encourage you to get out there, enjoy the brisk Fall weather and make every mediation cool and crisp!

Create Space for Emotions in Mediation

A recent newspaper article encouraged workers to use their emotional intelligence at work. The idea was that we should not hold all our emotions “in” because if we do so, we may not be able to build relationships with the people around us day in and day out.

Also, for those who follow NFL football, Steve Smith of the Carolina Panthers, who just finished a 2 game suspension for punching a teammate (Lucas) in practice, reported that he and the player he punched now have a cordial and building friendship. Previously, these two players were seen to be at odds. So what changed? Smith says that he previously did not like Lucas because he believed that Lucas did not like him. (Same from Lucas.) However, after a team meeting where everyone had a chance to say their piece. It turned out that Smith and Lucas did not like each other because they thought the other did not like him. Talk about a self fulfilling prophesy. With the air cleared the team and teammates came together.

Thus, if we take these two ideas together and add them to our work as mediators, then be sure you check in with participants on an emotional level in mediation. Consider how you can create a comfortable space for participants to express how they feel and then “manage” the emotions if necessary. Mediation in the litigated case is often the participant’s “day in court” so it can be essential to provide an opportunity for emotions to help with the resolution.

Conflict Defined

Each Fall semester I teach a class – Mediation Theory & Practice - for the Conflict Resolution Department at UNC Greensboro. This is part of a Masters program and the students come from many different walks of life with a common interest in conflict resolution. I also teach this class online. In our first meeting I take the class through an exercise called “Defining Conflict” in which we consider our perspective on “conflict.” The last step in the exercise is to come up with one word definitions of conflict that are positive or constructive in nature.

Check out this year’s great list of words:

Catalyst – Communication – Creativity – Growth – Maturation – Rethinking – Evolving – Motion – Quest – Adventure – Relationship – Building – Change – Revitalization – Growth – Opportunity – Revolution – Renew – Resolution - Restoration - Bridging - Enlightenment - Dialogue - Disentanglement – Engagement – Movement – Workout – Differences – Learning – Curiosity – Understanding – Transformation – Challenge – Progress – Juncture – Path

So, the next time you get discouraged in a mediation, pull out your handy pocket note card with these words on it and then get back to work!

Labor Day Reflection

For many folks, this past Labor Day week-end is a recognition and celebration of work! I started thinking about our work as mediators and how should we celebrate? Initially, I thought about “what is mediation” and then realized it’s not about “what,” it’s about “how.”

Here’s my take on the “how” at a macro level with Labor Day in mind. As mediators we practice both a science (the science of negotiation, personal interaction, etc.) and an art (intuitive understanding, empathy, etc.). For me, being a mediator is a craft. It is something I continually study, seek to master and improve. I can find new ways to conduct the process as long as I am reflective about what I do. Be a reflective practitioner.

Here’s an easy way to give this a try. The next time you serve as mediator; do something differently from how you usually do it. It could be as simple as how you introduce yourself or how you describe your role as mediator or . . . You’ll think of something and when you do and put it into action – then you are being reflective! This first step should lead you to consider why you do the things that you do as mediator. We know that there is a reason for each word we chose, each caucus we direct and the list goes on and on.

And in your reflection, in your consideration of the “how” and “why,” you celebrate that which is mediation. Enjoy your days of labor as mediator!

Study Says Plaintiffs Should Settle!

In the mediation of a litigated case, there comes a time when participants consider the potential outcome at trial or hearing. This is the part of mediation where you, as mediator, help them sort through and consider their BATNA (best alternative to a negotiated agreement), WATNA (worst alternative to a negotiated agreement) and MLATNA (most likely alternative to a negotiated agreement). With this analysis in hand, participants are then usually able to make more informed choices about how to proceed - settle or go to trial.

Now there is another tool to add to your mediator toolbox when discussing the case with plaintiffs. A soon to be published study found that settling was better for plaintiffs than going to trial. According to study co-author Randall L. Kiser - “The lesson for plaintiffs is, in the vast majority of cases, they are perceiving the defendant’s offer to be half a loaf when in fact it is an entire loaf or more.” Here's a link to a New York Times story on the study - Study Article. The study reviewed 2,054 cases from 2002 - 2005 and found that plaintiffs made the wrong decision in going to trial, i.e., obtained a lower economic result as compared to an offered settlement, in 61% of the cases while for defendants, the figure was much lower at 24%.

So, next time you are in private caucus with the plaintiff and counsel, you might ask if they've heard of this study and it's results. It might help participants rethink their perspective on the case and create further opportunity to explore settlement.

Mediation Olympics

Anyone who watched the recent US men’s 4 x 100 relay swim saw a marvelous race that ended with a winning touch. On the one hand it’s about the gold, the gold medal, yet the Olympics are so much more than the glory of winning. Listening to Melanie Roach, US weightlifter, exclaim about her wonder, joy and satisfaction with a sixth place finish is, for me, what the Olympics are really about. My question for you mediators – what’s your mediation about?

For many who mediate in litigated cases, there is only the “gold” of settlement. Yet I suggest that having this as your focus can, in some cases, prevent you from reaching that goal.

Here’s my point. If you as mediator place the outcome, settlement, as your prime goal, you can lose sight of the process and your neutrality becomes at issue. In effect you can create a “conflict of interest” with the participant who does not want to settle their claim, while you want it settled. I’m not suggesting that you give up completely on the goal of settlement, rather, that you stay true to a mediation process that allows for self determination. Again, stay focused on the process. Be neutral and unbiased in your actions and choices as mediator.

And finally, if you stay with the process and think less about “getting that settlement” - I believe you will be more open as a mediator to what is happening in front of you, you will be more creative and willing to take “risks,” and are more likely to actually help folks out of tight spots. The cases will settle.

So, go for the mediation process and get the “gold” !

Conflict is Good! Bring it on!

Okay, maybe the title is a bit too strong, yet we know that conflict can create change and many times for the better. Or the energy of conflict can fuel creativity and invention. My point is that conflict is not always a bad thing. Particularly if it comes in small and manageable doses. I’m not talking about physical or strong emotional conflict or violence; rather I’m talking about the kind of every day conflict that occurs in our homes, in our workplaces and in our mediations.

The question for you as mediator is to sort through the “conflict” that is in your mediation and decide what if anything you should do about it. Is it okay to let folks raise their voices at each other? Or use strong language? When and how does the conflict energy shift from constructive to destructive or vice versa? We’ve all been in mediations where it seemed pretty hot and then later folks calmed down, analyzed their situation and reached an amicable resolution. So, what happened? What, if anything did you do?

Some mediators may come from the school of thought that the mediator must tightly control emotions so that participants can stay focused on solving the problem at hand. Others may allow all sorts of conflict to erupt in front of them and facilitate from that point. I believe that “some” conflict is a good thing in mediation and that often participants can’t really get down to the business of solving the problem until they work through some of their feelings. This is not an either/or proposition; rather, as I’ve noted before, it’s a both/and. As mediator you connect with the conflict energy and then help the participants figure out what to do about it.

So how do you get started? I believe that the most important step as mediator is to not only listen fully to what is being said, how it is being said and by whom, but to fully engage with the room. In addition to listening, check body language and let yourself feel what’s happening. Take it all in with all your senses. And then get to work! Bring it on!

Beyond the Knights of Ni!

I watched the classic Monty Python film, Search for the Holy Grail, this week-end, and the Knights of Ni reminded me of what we often hear in mediation. Not the word “Ni,” but the word “no.” This small in size and sometimes large in stature word appears in many different forms including – “I can’t do that.” Or “What are they thinking – are they crazy?” Or “never in a million years” and sometimes as just plain “no.”

As mediator, what to do when faced with No? Do you conclude the mediation at its utterance or do you welcome it as an invitation? Or perhaps that we are finally getting to the heart of the matter. For me, when folks say “no” it means that, I as mediator, must really get to work to help keep the process and discussion moving so that participants will stay engaged and be able to move from No to Yes if they so choose. It certainly does not occur as a clear, crisp switch; rather, the mediation process can allow participants to shift their thinking, to reconsider their positions and interests and to make decisions that they did not anticipate prior to the mediation process or even during earlier parts of the session.

I also have a personal mediator “rule” that the word “No” does not mean “No” until someone has said it three times. This doesn’t mean that I pester people or brush off their “No” - rather, it means I continue to explore with participants how they can meet their needs and interests and in so doing, move beyond no. Part of the genesis of this rule is that people who negotiate in mediation sometimes use “no” as a negotiating tool. They don’t really mean it. Also, as noted above, I believe that when people say “no,” it can mean that you are getting close to what they really want. So, in either case, I keep on working as mediator until it is crystal clear to everyone that we need to stop our work for the day.

Note that I am not imposing my decision about what “No” does or does not mean; rather, I just keep working the mediation process. These are times to listen hard, pay close attention to the feelings in the room and watch everyone like a hawk. All this information can help you as mediator help the folks trying to make choices about their dispute.

So, the next time someone says “no” in mediation, think of the Knights of Ni. And for those who do not recall – remember that the Python Knights went past by first bringing a shrubbery and then with the word “it!”

One Minute Mediator !

Many of you may be familiar with a book on management, "The One Minute Manager" by Kenneth Blanchard and Spencer Johnson (first published in 1982) which follows the quick saga of "a bright young man who was looking for an effective manager." Through his efforts he meets the "One Minute Manager" and various co-workers who extoll the virtues of the "old man" and explain the concept of being a One Minute Manager. I just got hold of it recently and it's a great read with some very focused insight that matches our work as mediators.

One aspect that hit home for me was the One Minute Manger's statement about whether his management style was "results-oriented" or "people oriented." He said "How on earth can I get results if it's not through people? I care about people and results. They go hand in hand." Thus, the One Minute Manager is a "both / and" kind of guy. It's not either / or, it's both. This should be true for your work as a mediator.

You need to work both your "soft" people and (it shouldn't be "or") your "hard" negotiating skills when you work as a mediator. This helps mediation participants fully engage in the process and evaluate their choices about how to proceed. So, the next time you are in the middle of a tough negotiation, take a look around the room - how are folks doing? Is there something you can do to help the negotiation discussion move forward by paying attention to the people?

As mediators, we, like the One Minute Manager, should care about people and process results.

Hercules the Mediator

Do you know the myth of Hercules and the Nemian Lion? I heard it the other day (listening to a story CD in the car with my family) and it’s a story that speaks to our work as mediators.

Here’s the story: Hercules is tasked to slay the Nemain Lion whose hide cannot be cut. So, Hercules wrestles the lion and squeezes it to death. With the lion dead, Hercules tries to cut the hide, but cannot. So, and here’s the mediator part, he uses the claws of the lion to cut the hide.

The lesson for Hercules and for us as mediators is that the ability to achieve a result will come from the participants at mediation (for Hercules, from the lion). Thus, it is our job to help facilitate the finding of that which will lead to settlement and/or resolution. Can we help uncover some underlying strength in participants that will empower them to make a settlement decision? And, how do we do so?

One key aspect is to learn about the people at mediation. They are not just plaintiff or defendant or insurance professional. They are people and if you learn more about them, what makes them tick, this will lead to what you need to do to help them cut through the hide and decide.

Go Hercules !

Celebrate Your Mediator Independence !

July 4^th is just at the end of the week. It is a celebration of independence. And when I think of “independence” in the mediation context, I think of being neutral on the content, being impartial, and not being biased in word or action. I think of self determination. It is our independence as mediators’ and our adherence to self determination that allows us to do our work as conflict resolution professionals. These are the foundational blocks of our work, just like the revolutionaries that went before us in 1776.

So, how do you stay independent as a mediator? First, you must embrace the notion that you are an advocate for the process, but not an advocate for a particular outcome. You focus your process choices on participant self determination. You might want folks to reach a settlement of their dispute (of course you do !) yet they may not. While you must help them consider all potential choices, if you push for a particular outcome, you may begin to lose your neutrality. You become partial. You show your bias. When you do so, you are no longer holding the center of the conflict; rather you are supporting one “side” over the other. If you do so, you will lose your effectiveness as a mediator because people will not follow your process lead it they perceive that you are supporting the other "side."

The key, I suggest, is to support all choices, all “sides,” and all participants at mediation. You do this by being a staunch advocate for the mediation process. You do so by listening carefully and guiding a process that stays aligned with self determination. You stay independent even as you empathize and connect with participants at mediation. This is the power and glory of the process. Enjoy as you celebrate on July 4^th !

New Mediator Standards in the Works

The NC Dispute Resolution Commission approved changes last month to the Standards of Conduct for Mediators. (I've included the full text below and comments.) These changes will be sent to the NC Supreme Court for review and approval in the Fall. On the whole these are not drastic changes; however, mediators should take a close look at III Confidentiality, sections D and E which outline when and how a mediator might report certain conduct of lawyers participating in mediation.

Here's new section D - "The confidentiality provisions set forth in A. and B., above, notwithstanding, a mediator who knows that an attorney participating in the mediation has violated the Rules of Professional Conduct applicable to attorneys licensed in this state by engaging in conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects shall report the violation. However, a formal complaint shall not be made to the State Bar or the Court under this section unless an informal, oral opinion from the State Bar has been obtained that the conduct in question is a violation of the Rules and that it is required to be reported under Rule 8.3 of the Code of Professional Responsibility. " This is a very high knowledge threshold, i.e., "knows" (as highlighted above) and also includes an intermediate step before any formal reporting.

I encourage mediators to review these proposed changes and offer comments either here and I'll pass them on to the NC DRC or contact the DRC directly.

The strike through and underline represent changes.

STANDARDS OF PROFESSIONAL

CONDUCT FOR MEDIATORS

PREAMBLE

These standards shall apply are intended to instill and promote public confidence in the mediation process and to be a guide to mediator conduct to all mediators who are certified by the North Carolina Dispute Resolution Commission or who are not certified, but are conducting court-ordered mediations in the context of a program or process that is governed by statutes, as amended from time-to-time, which provide for the Commission to regulate the conduct of mediators participating in the program or process. Provided, however, that if there is a specific statutory provision that conflicts with these standards, then the statute shall control. As with other forms of dispute resolution, mediation must be built on public understanding and confidence. Persons serving as mediators are responsible to the parties, the public, and the courts to conduct themselves in a manner which will merit that confidence. These standards apply to all mediators participating in mediated settlement conferences in the State of North Carolina pursuant to NCGS 7A-38.1, NCGS 7A-38.3, NCGS 7A-38.4A, NCGS 7A-38.3B, NCGS 7A-38.3C or who are certified by the NC Dispute Resolution Commission. These Standards shall not apply in instances where a mediator is participating in a mediation program or process which is governed by other statutes, program rules, and/or Standards of Conduct and there is a conflict between these Standards and the statutes, rules, or Standards governing the other program. In such instance, the mediator’s conduct shall be governed by the conflicting statutory provision, rule, or Standard applicable to the program or process in which the mediator is participating.

These standards are intended to instill and promote public confidence in the mediation process and to provide minimum standards for mediator conduct. As with other forms of dispute resolution, mediation must be built upon public understanding and confidence. Persons serving as mediators are responsible to the parties, the public and the courts to conduct themselves in a manner that will merit that confidence. (See Rule VII of the Rules of the North Carolina Supreme Court for the Dispute Resolution Commission.

Mediation is a process in which an impartial person, a mediator, works with disputing parties to help them explore settlement, reconciliation, and understanding among them. In mediation, the primary responsibility for the resolution of a dispute rests with the parties.

The mediator’s role is to facilitate communication and recognition among the parties and to encourage and assist the parties in deciding how and on what terms to resolve the issues in dispute. Among other things, a mediator assists the parties in identifying issues, reducing obstacles to communication, and maximizing the exploration of alternatives. A mediator does not render decisions on the issues in dispute.

It is the mediator’s role to facilitate communication and understanding among the parties and to assist them in reaching an agreement. The mediator should aid the parties in identifying and discussing issues and in exploring options for settlement. The mediator should not, however, render a decision on the issues in dispute. In mediation, the ultimate decision whether and on what terms to resolve the dispute belongs to the parties and the parties alone.

I. Competency: A mediator shall maintain professional competency in mediation skills and, where the mediator lacks the skills necessary for a particular case, shall decline to serve or withdraw from serving.

A. A mediator’s most important qualification is the mediator’s competence in procedural aspects of facilitating the resolution of disputes rather than the mediator’s familiarity with technical knowledge relating to the subject of the dispute. Therefore a mediator shall obtain necessary skills and substantive training appropriate to the mediator’s areas of practice and upgrade those skills on an ongoing basis.

B. If a mediator determines that a lack of technical knowledge impairs or is likely to impair the mediator’s effectiveness, the mediator shall notify the parties and withdraw if requested by any party.

C. Beyond disclosure under the preceding paragraph, a mediator is obligated to exercise his/her judgment as to whether his/her skills or expertise are sufficient to the demands of the case and, if they are not, to decline from serving or to withdraw.

II. Impartiality: A mediator shall, in word and action, maintain impartiality toward the parties and on the issues in dispute.

A. Impartiality means absence of prejudice or bias in word and action. In addition, it means a commitment to aid all parties, as opposed to a single party, in exploring the possibilities for resolution.

B. As early as practical and no later than the beginning of the first session, the mediator shall make full disclosure of any known relationships with the parties or their counsel that may affect or give the appearance of affecting the mediator’s impartiality.

C. The mediator shall decline to serve or shall withdraw from serving if:

(1) a party objects to his/her serving on grounds of lack of impartiality, and after discussion, the party continues to object or

(2) the mediator determines he/she cannot serve impartially.

III. Confidentiality: A mediator shall, subject to exceptions set forth below, maintain the confidentiality of all information obtained within the mediation process.

A. A mediator shall not disclose, directly or indirectly, to any non-participant, any information communicated to the mediator by a participant within the mediation process. A mediator’s tendering a copy of an agreement reached in mediation pursuant to a statute that mandates such a tender shall not be considered to be a violation of this paragraph.

B. A mediator shall not disclose, directly or indirectly, to any non-participant, information communicated to the mediator in confidence by any other participant in the mediation process, unless that participant gives permission to do so. A mediator may encourage a participant to permit disclosure, but absent such permission, the mediator shall not disclose.

C. The confidentiality provisions set forth in A. and B., above, notwithstanding, a mediator shall has discretion to report otherwise confidential conduct or statements made by a participant in preparation for, during, or as a follow-up to mediation in instances in which to a participant, non-participant, law enforcement personnel, or other officials or to give an affidavit, or to testify about such conduct or statements in the following circumstances:

(1) A statute requires or permits a mediator to testify, to give an affidavit, or to tender a copy of any agreement reached in mediation to the official designated by the statute. The mediator is required by statute:

(a) To report information, and

(b) To testify or give an affidavit.

(2) Where pPublic safety is becomes an issue, when:

(i) (a) a party to the mediation has communicated to the mediator a threat of serious bodily harm or death to be inflicted on any person, and the mediator has reason to believe the party has the intent and ability to act on the threat; A participant in the mediation has communicated in the presence of the mediator either a threat of serious bodily harm or death to any person, or a threat of theft of or serious damage to real or personal property, which, in the reasonable belief of the mediator, the participant has the intent and ability to carry out; or

(ii) (b) a party to the mediation has communicated to the mediator a threat of significant damage to real or personal property and the mediator has reason to believe the party has the intent and ability to act on the threat; or A participant in the mediation causes bodily harm or death to any person.

(iii) a party's conduct during the mediation results in direct bodily injury or death to a person.

D. Nothing in this Standard prohibits the use of information obtained in a mediation for instructional purposes, or for the purpose of evaluating or monitoring the performance of a mediator, mediation organization, or dispute resolution program, so long as the parties or the specific circumstances of the parties' controversy are not identified or identifiable. The confidentiality provisions set forth in A. and B., above, notwithstanding, a mediator who knows that an attorney participating in the mediation has violated the Rules of Professional Conduct applicable to attorneys licensed in this state by engaging in conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects shall report the violation. However, a formal complaint shall not be made to the State Bar or the Court under this section unless an informal, oral opinion from the State Bar has been obtained that the conduct in question is a violation of the Rules and that it is required to be reported under Rule 8.3 of the Code of Professional Responsibility.

E. Nothing in this Standard shall prohibit a mediator from revealing communications or conduct occurring prior to, during, or after a mediation in the event that a party to or a
participant in a mediation has filed a complaint regarding the mediator’s professional conduct, moral character, or fitness to practice as a mediator and the mediator reveals the communication or conduct for the purpose of defending him/herself against the complaint. In making any such disclosures, the mediator should make every effort to protect the confidentiality of non-complaining parties to or participants in the mediation and avoid disclosing the specific circumstances of the parties’ controversy. The mediator may consult with non-complaining parties or witnesses to consider their input regarding disclosures. The confidentiality provisions set forth in A. and B., above, notwithstanding, a mediator may report conduct or statements made by a participant in preparation for, during, or as a follow-up to mediation in the following instances:

(1) A lawyer in a mediation is, in the judgment of the mediator, significantly impaired by the use of alcohol or other substances or by mental or physical illness, or

(2) A lawyer in the mediation displays conduct that the mediator believes to be inappropriate or unprofessional but not unethical, or

(3) A mediator who is licensed in a profession other than the legal profession that imposes requirements on its members to report unprofessional conduct of its members knows that a member of the profession has violated those standards.

F. Conduct reportable under C., D. or E., above, shall be reportable, only as follows:

(1) Conduct reportable under C. (1) shall be reported as directed by the applicable statute.

(2) Conduct reportable under C. (2) shall be reported to an appropriate law enforcement agency and to the Court, if applicable.

(3) Conduct reportable under D. shall be reported to the North Carolina State Bar

or to the Court but only after the State Bar has given an informal, oral opinion that such conduct requires the filing of a complaint with the State Bar.

(4) If the mediator elects to report conduct reportable under E. (1), such conduct shall be reported to the Lawyer Assistance Program of the North Carolina State Bar.

(5) If the mediator elects to report conduct reportable under E. (2), such conduct shall be reported to the Professionalism Support Initiative Program of the Chief Justice’s Commission on Professionalism.

(6) If the mediator elects to report conduct reportable under E. (3), such conduct shall be reported to the licensing organization or society of which the offending person is a member.

G. Nothing in this Standard prohibits the use of information obtained in a mediation for

instructional purposes, or for the purpose of evaluating or monitoring the performance of a mediator, mediation organization, or dispute resolution program, so long as the parties or the specific circumstances of the parties' controversy are not identified or identifiable.

H. Nothing in this Standard shall prohibit a mediator from revealing communications or conduct occurring prior to, during, or after a mediation in the event that a party to or a participant in a mediation has filed a complaint regarding the mediator’s professional conduct, moral character, or fitness to practice as a mediator and the mediator reveals the communication or conduct for the purpose of defending him/herself against the complaint. In making any such disclosures, the mediator should make every effort to protect the confidentiality of non-complaining parties to or participants in the mediation and avoid disclosing the specific circumstances of the parties’ controversy. The mediator may consult with non-complaining parties or witnesses to consider their input regarding disclosures.

OFFICIAL COMMENT

General

Standard III imposes the duty of confidentiality on matters relating to a mediated settlement conference. The Standard, as revised, contains some significant departures from the former version. The revised standard reflects a concerted effort to preserve confidentiality as a guide star of the mediation process while recognizing that there are some instances where there are public policy interests that supersede the need for strict confidentiality.

This Standard should be read in conjunction with other Standards regarding impartiality and the obligation of a mediator to remain neutral and void of bias.

By way of background, the revised Standard emerges from a long, detailed and thoughtful process. One concept was that mediators should have no disclosure obligations, unless a statute requires it, thereby preserving confidentiality of the mediation events as paramount. Another concept was reflected in proposals for mediators to have numerous mandatory disclosure obligations as well as some discretionary ones on the premise that, as an adjunct to the judicial system, mediation has some responsibility to the public and to the court that overrides the confidentiality mandate.

As a result of the discussions and proposals, there emerged a revised Standard that addresses a variety of situations in which a mediator is required to report conduct observed during the course of a mediation. It addresses, also, some situations where reporting is permitted by the Standard. The focus on such topics covers all mediators, not only those who are attorneys. All certified mediators have an obligation to conduct themselves in a manner that upholds the integrity of the mediation process as an adjunct to the state judicial system.

Duty of Confidentiality

Section A relates to communications with persons who are not parties or participants in the mediated settlement conference.

Section B relates to communications with persons who are parties or participants in the mediated settlement conference.

Exceptions to the Duty of Confidentiality

Section C provides mandatory exceptions to the duty of confidentiality in two situations, in each of which the mediator is required to report conduct or statements made in preparation for, during or as a follow-up to mediation.

• First, the mediator shall make a report in instances where there is a statutory requirement (such as elder care or child abuse) for the mediator to report information, to testify or to give an affidavit or to tender a copy of an agreement reached in mediation. The conduct reportable under statutory authority shall be reported as directed by the applicable statute.

• Second, the mediator shall make a report in instances where public safety becomes an issue. The reporting obligation arises when a participant in the mediation has communicated in the presence of the mediator either a threat of serious bodily harm or death to any person, or a threat of theft of or serious damage to real or personal property, which, in the reasonable belief of the mediator, the participant has the intent and ability to carry out. The mediator must know from his/her own observation that the threatening communication occurred. Hearing it second-hand is not sufficient. The reporting obligation arises, also, if a participant in the mediation causes bodily harm or death to any person. The conduct reportable under the public safety exception shall be reported to both an appropriate law enforcement agency and to the Court, if the mediation occurs under the auspices of a Court.

Section D intentionally uses the same language as Rule 8.3 of the Rules of Professional Conduct concerning an attorney’s duty to report a violation. The same criteria applicable to Rule 8.3 apply to Standard III. Reportable conduct must be known personally by the mediator to have occurred. The reporting obligation does not arise if information comes to the mediator through others or if the conduct is only suspected to have occurred. To be reportable, the conduct must clearly raise a substantial question as to the lawyer/participant’s honesty, trustworthiness or fitness as a lawyer. Simply stated, if the conduct does not amount to lying, cheating or stealing, there is no obligation to report it. A mediator who is not a lawyer who observes conduct by a lawyer meeting the standards described here must report the conduct, even though the mediator may not be familiar with or subject to the Rules of Professional Conduct. The conduct reportable under the exception applicable to attorneys shall be reported to either the North Carolina State Bar or to the Court, but, as a safeguard against reporting that is not required and as a protection to the mediator against making a claim that is not required by the Rules, the Standard requires that the mediator first seek an informal, oral opinion from the State Bar before making a formal complaint.

Section E. permits, but does not require, mediators to report certain conduct or statements made in preparation for, during or as a follow-up to mediation.

· A mediator may report that a lawyer participating in a mediation is, in the judgment of the mediator, significantly impaired by the use of alcohol or other substances or by mental or physical illness. The conduct reportable under the exception applicable to impaired attorneys shall, if reported, be reported to the Lawyer Assistance Program of the North Carolina State Bar. The Lawyer Assistance Program is itself a confidential program, and information passed to that program will remain confidential there for use only with the professionals involved.

· A mediator may report that a lawyer participating in a mediation has, in the judgment of the mediator, acted in a manner that the mediator believes to be inappropriate or unprofessional but that the conduct does not rise to the level of being unethical. The conduct reportable under this exception shall, if reported, be reported to the Professionalism Support Initiative Program of the Chief Justice’s Commission on Professionalism. The Professionalism Support Initiative Program is itself a confidential program, and information passed to that program will remain confidential there for use only with the professionals involved.

· A mediator who is licensed in a profession other than the legal profession that imposes requirements on its members to report conduct of its members that fails to meet the profession’s standards and who knows that a member of the profession participating in the mediation has violated those standards may report that violation. Approximately ten percent of licensed mediators are not lawyers, and many of them are members of professional organizations or societies that have conduct standards. This provision permits members of such professional organizations or societies to honor their obligations under the applicable codes of conduct without fear of reprisal for having breached Standard III.

Reporting Conduct under the Exceptions - General

The Standard either sets forth to whom a report under the exceptions shall be made or defines how to determine the recipient or the process. In most instances, that will be clear.

When in doubt about to whom a report should be made, a mediator should contact the DRC staff for direction on the matter.

Reporting Conduct under the Exceptions – Section D

A special word is believed to be in order regarding reporting conduct under Section D concerning attorneys.

Information provided by the North Carolina State Bar clearly shows that this provision may present more of a scare factor than it deserves. The standard for the requirement to report conduct is a tough one, hence the requirement that the conduct be known by the mediator to have occurred. Even a strong inference that violative conduct probably occurred is not sufficient to require a report to be made. It takes personal knowledge. There is no intention to make mediators a police force for the State Bar.

Mediators should be mindful that there is a difference between a false statement of material fact or law and statements frequently made in negotiations regarding a party’s intentions and values regarding a claim. The former would be a violation of the Rule 4.1 of the Rules of Professional Responsibility. As Comment [2] of the Comments to Rule 4.1 recognizes, however, the latter would not be a violation. Whether a statement should be regarded as one of fact can depend upon the circumstances.

Should a reporting obligation arise under this exception to the confidentiality requirement, Rule 8.3 of the Rules of Professional Responsibility states that the report goes to the State Bar or to the Court. Standard III requires the mediator as a first step to call the North Carolina State Bar to inquire about the process for reporting unprofessional conduct that might violate the Rules of Professional Responsibility. The mediator should present the scenario anonymously and as a hypothetical question. Then, only if the response indicates that the conduct should be reported, the mediator would provide the details necessary.

Licensed attorneys who already have the obligation to report under Rule 8.3 of the Rules of Professional Responsibility have no additional obligation under this Standard because they may be serving as mediator; the obligation is the same. A lawyer-mediator who makes a report to the State Bar in fulfillment of the obligation that s/he has under the Rules of Professional Responsibility fulfills the obligation to make a report under this Standard.

There is a very real distinction between a “report” required to be made under Standard III and a “complaint” made under the Rules of Professional Responsibility. The Standard requires that the first step be the seeking of an informal, oral opinion from the State Bar. If the informal opinion received is to the effect that no further action need be taken, the reporting obligation under Standard III has been met. This first step is designed to be a safeguard in two respects. In those circumstances, the lawyer whose conduct was in question is not faced with a disciplinary investigation, and the attorney-mediator has the comfort of knowing that s/he has not failed to report a violation. All confidences are maintained by this process. If, however, the informal opinion received is to the effect that the conduct reported is a violation of the Rules of Professional Responsibility that requires a complaint against the lawyer to be made, the attorney-mediator shall file the complaint with the State Bar, and doing so fulfills the obligations undertaken both under Standard III and Rule 8.3.

IV. Consent: A mediator shall make reasonable efforts to ensure that each party understands the mediation process, the role of the mediator, and the party’s options within the process.

A. A mediator shall discuss with the participants the rules and procedures pertaining to the mediation process and shall inform the parties of such matters as applicable rules require. A mediator shall also inform the parties of the following:

(1) that mediation is private;

(2) that mediation is informal;

(3) that mediation is confidential to the extent provided by law;

(4) that mediation is voluntary, meaning that the parties do not have to negotiate during the process nor make or accept any offer at any time;

(5) the mediator’s role; and

(6) what fees, if any, will be charged by the mediator for his/her services.

B. A mediator shall not exert undue pressure on a participant, whether to participate in mediation or to accept a settlement; nevertheless, a mediator may and shall encourage parties to consider both the benefits of participation and settlement and the costs of withdrawal and impasse.

C. Where a party appears to be acting under undue influence, or without fully comprehending the process, issues, or options for settlement, a mediator shall explore these matters with the party and assist the party in making freely chosen and informed decisions.

C. If a party appears to have difficulty comprehending the process, issues, or settlement options, or difficulty participating in a mediation, the mediator shall explore the circumstances and potential accommodations, modifications or adjustments that would facilitate the party’s capacity to comprehend, participate and exercise self-determination. If the mediator then determines that the party cannot meaningfully participate in the mediation, the mediator shall recess or discontinue the mediation. Before discontinuing the mediation, the mediator shall consider the context and circumstance of the mediation, including subject matter of the dispute, availability of support persons for the party and whether the party is represented by counsel.

D. If after exploration the mediator concludes that a party is acting under undue influence or is unable to fully comprehend the process, issues or options for settlement, the mediator shall discontinue the mediation.

E.D In appropriate circumstances, a mediator shall encourage inform the parties to seek of the importance of seeking legal, financial, tax or other professional advice before, during or after the mediation process. A mediator shall explain generally to pro se parties that there may be risks in proceeding without independent counsel or other professional advisors.

V. Self Determination: A mediator shall respect and encourage self-determination by the parties in their decision whether, and on what terms, to resolve their dispute, and shall refrain from being directive and judgmental regarding the issues in dispute and options for settlement.

A. A mediator is obligated to leave to the parties full responsibility for deciding whether and on what terms to resolve their dispute. He/She may assist them in making informed and thoughtful decisions, but shall not impose his/her judgment or opinions for those of the parties concerning any aspect of the mediation.

B. A mediator may raise questions for the participants to consider regarding their perceptions of the dispute as well as the acceptability of proposed options for settlement and their impact on third parties. Furthermore, a mediator may suggest for consideration options for settlement in addition to those conceived of by the parties themselves.

C. A mediator shall not impose his/her opinion about the merits of the dispute or about the acceptability of any proposed option for settlement. A mediator should resist giving his/her opinions about the dispute and options for settlement even when he/she is requested to do so by a party or attorney. Instead, a mediator should help that party utilize his/her own resources to evaluate the dispute and the options for settlement.

This section prohibits imposing one’s opinions, advice and/or counsel upon a party or attorney. It does not prohibit the mediator’s expression of an opinion as a last resort to a party or attorney who requests it and the mediator has already helped that party utilize his/her own resources to evaluate the dispute and options.

D. Subject to Standard IV. E. above, if a party to a mediation declines to consult an independent counsel or expert after the mediator has raised this option, the mediator shall permit the mediation to go forward according to the parties’ wishes.

E. If, in the mediator’s judgment, the integrity of the process has been compromised by, for example, inability or unwillingness of a party to participate meaningfully, inequality of bargaining power or ability, unfairness resulting from non-disclosure or fraud by a participant, or other circumstance likely to lead to a grossly unjust result, the mediator shall inform the parties of the mediator’s concern. Consistent with the confidentiality required in Standard III, the mediator may discuss with the parties the source of the concern. The mediator may choose to discontinue the mediation in such circumstances but shall not violate the obligation of confidentiality.

VI. Separation of Mediation from Legal and Other Professional Advice: A mediator shall limit himself or herself solely to the role of mediator, and shall not give legal or other professional advice during the mediation.

A mediator may, provide information that the mediator in areas where he/she is qualified by training and or experience to provide, raise questions regarding the only if the mediator can do so consistent with these Standards. information presented by the parties in the mediation session. However, the mediator shall not provide legal or other professional advice. Mediators may respond to a party’s request for an opinion on the merits of the case or suitability of settlement proposals only in accordance with Section V.C. above.

VII. Conflicts of Interest: A mediator shall not allow any personal interest to interfere with the primary obligation to impartially serve the parties to the dispute.

A. The mediator shall place the interests of the parties above the interests of any court or agency which has referred the case, if such interests are in conflict.

B. Where a party is represented or advised by a professional advocate or counselor, the mediator shall place the interests of the party over his/her own interest in maintaining cordial relations with the professional, if such interests are in conflict.

C. A mediator who is a lawyer, therapist or other professional and the mediator’s professional partner or co-shareholders shall not advise, counsel or represent any of the parties in future matters concerning the subject of the dispute, an action closely related to the dispute, or an out growth of the dispute when the mediator or his/her staff has engaged in substantive conversations with any party to the dispute. Substantive conversations are those that go beyond discussion of the general issues in dispute, the identity of parties or participants and scheduling or administrative issues. Any disclosure that a party might expect the mediator to hold confidential pursuant to Standard III is a substantive conversation.

A mediator who is a lawyer, therapist or other professional may not mediate the dispute when the mediator or the mediator’s professional partners or co-shareholders has advised, counseled or represented any of the parties in any matter concerning the subject of the dispute, an action closely related to the dispute, a preceding issue in the dispute or an out growth of the dispute.

D. A mediator shall not charge a contingent fee or a fee based on the outcome of the mediation.

E. A mediator shall not use information obtained or relationships formed during a mediation for personal gain or advantage.

F. A mediator shall not knowingly contract for mediation services which cannot be delivered or completed as directed by a court or in a timely manner.

G. A mediator shall not prolong a mediation for the purpose of charging a higher fee.

H. A mediator shall not give or receive any commission, rebate, or other monetary or non-monetary form of consideration from a party or representative of a party in return for referral or expectation of referral of clients for mediation services.

VIII. Protecting the Integrity of the Mediation Process. A mediator shall encourage mutual respect between the parties, and shall take reasonable steps, subject to the principle of self-determination, to limit abuses of the mediation process.

A. A mediator shall make reasonable efforts to ensure a balanced discussion and to prevent manipulation or intimidation by either party and to ensure that each party understands and respects the concerns and position of the other even if they cannot agree.

B. When a mediator discovers an intentional abuse of the process, such as nondisclosure of material information or fraud, the mediator shall encourage the abusing party to alter the conduct in question. The mediator is not obligated to reveal the conduct to the other party, (and subject to Standard V. D. above) nor to discontinue the mediation, but may discontinue without violating the obligation of confidentiality.

If a mediator believes that the actions of a participant, including those of the mediator, jeopardizes conducting a mediation consistent with these Standards, a mediator shall take appropriate steps including, if necessary, postponing, withdrawing from or terminating the mediation.