Mediation – Practical Guidelines, Part 2: The mediator – role and limits as the moderator of the process of reaching an agreement

While part 1 of these guidelines addressed the basic principles of the mediation procedure in general and, above all, the logistical issues of “who, where, how,” part 2 deals mainly with preparing for the conflict before the mediation hearing and the specifics of conducting the hearing as such.

I. Moderating the process of reaching an agreement

Every mediator will have his or her own style and basic concept regarding the sequence and structure of a mediation hearing, which he or she is then required to adjust to the respective individual case.

1. Written narrative summary by the parties to the conflict

The mediator cannot reasonably be expected to work his or her way through what may be mountains of files on a lengthy conflict, nor is it certain that he or she would in fact discern the true core of the conflict even so. Both parties must therefore be asked to summarize the facts of the matter and the status of the dispute from their standpoints, in a manner appropriate to the complexity of the case. To this end, the mediator should, after consulting with the parties to the conflict, set out clear rules for the maximum scope and submission deadline and potentially establish an organizational structure that applies to all sides with regard to the subjects to be addressed. Within a further time limit after that, each party will then have the opportunity, after taking note of the opposing side’s submissions, to submit supplementary written remarks on the statements made therein within a certain time window and maximum scope.

These clear and easily understood summaries – which are termed “narratives” hereinafter – form the basis for the mediator to familiarize himself or herself with the substance of the conflict and plan the mediation process.

2. Opening phase of the mediation hearing

At the start of the mediation hearing, the mediator should provide an introduction to mediation in general, the planned process of the talks, and the procedural rules that must be observed.

After that, one option is to allow the parties to the conflict to present their respective standpoints orally within a certain speaking time. Instead of that, and often preferably, the mediator, who is now quite familiar with the matter from reading the written remarks, can outline his or her understanding of the status of the dispute and the issues that are especially relevant to the conflict and ask the parties to the conflict to add to or correct these remarks. This method has one major advantage in that it precludes potentially heated debate between the parties right at the start of the talks, instead offering an avenue of introduction to the subject matter of the conflict through the mediator’s presentation and with the mediator’s distance from the case.

3. Looping and paraphrasing

One factor that is absolutely crucial to the success of the mediator’s work is ensuring that all parties to the conflict have a firm sense at all times that the mediator is paying attention to and considering their submissions and actually understanding them as intended by the presenting party. The technique of “looping” or paraphrasing is an excellent way to do this. What this means is that the mediator repeats or paraphrases the parties’ submissions on an ongoing basis to ensure that he or she does in fact understand both parties’ submissions and arguments accurately. Having the mediator summarize the written narratives is another side of this same technique, which is why it is an excellent way to start the discussions and negotiations. In this way, the parties’ representatives can build the necessary fundamental trust in the mediator’s impartiality and understanding of the facts of the matter.

4. Interests/needs versus positions

The positions and demands or denials expressed by the parties to the conflict are obvious and clearly apparent. They are generally quite easy to ascertain and name. In terms of looking for possible solutions that involve an amicable agreement later on, however, it is highly important to “see through” these positions and discern the actual interest or need on which the party to the conflict bases the position. Although a position is generally expressed in the form of a monetary amount, in the vast majority of cases even a monetary position is backed by an identifiable interest or concern that does not have to do primarily with money. Finding out these underlying interests or needs on the part of all of the parties to the conflict (not just the claimant) is very often the key to identifying the best possible alternative solution in the further course of the negotiations.

5. Evaluating and weighing the parties’ interests/needs

In many cases, the matter concerns not just one need on the part of one of the parties to the conflict, but rather several, which generally vary in their importance to that party. But the other parties to the conflict also have needs and interests of their own, and they also vary in relevance. For mediation purposes, it is important for the true interests/needs of everyone involved in the conflict to be identified through open discussion and then evaluated or categorized jointly by the interested parties in terms of their importance and significance to the parties to the conflict. In many cases, the interests of those involved in the conflict have more aspects than is initially apparent. This can open up possible avenues of reaching an agreement, as accommodating a need that has been acknowledged as being especially important to one party may generate greater value for that party than conceding the point “costs” the opposing side – so a kind of added value with regard to one aspect or another can be generated through these kinds of elements of mutual agreement, making it easier to reach an overall solution.

The process of designating and attaching values to the interests and needs of other interested parties (and not just one’s own) openly and through shared discussion creates a negotiation atmosphere of consideration toward the other interested parties. It is much more difficult to reach an amicable agreement without this kind of cooperative negotiation atmosphere.

6. Separating the factual level from the relationship level

It is not uncommon for conflicts (such as those between shareholders or partners in a business) to be based not primarily on factual issues, but rather to have their true roots on the relationship level. If the mediator is not successful in identifying and understanding these root causes – which are often not clear from the exchange of written narratives – it will be very difficult to resolve the conflict. Where the conflict exists on a relationship level, achieving a certain level of satisfaction, or at least airing of concerns, on the part of the affected parties is even generally the primary goal. Since relationship conflicts are very difficult to categorize, it is nigh impossible to generalize about how to handle them, except to say that the most promising path is generally to gently and carefully identify and name the deeper-seated areas of personal dissonance. It may be necessary to hold a large number of individual discussions, or even to call in an appropriate expert. In many cases, even simply allowing the affected parties to voice their concerns with the mediator’s guidance can lead to a greater understanding of the opposing side’s views and feelings. In addition, naming and identifying the deeper-seated root causes of a conflict often points to ways that the parties could consciously avoid or handle the problematic relationship in the future, for example by agreeing to change the processes by which information is shared or matters are coordinated, making changes in responsibilities, involving external persons of trust, and so on.

7. Determining and evaluating the alternatives in case an amicable resolution is not reached

Before beginning to look for approaches to achieve an amicable resolution, it is advisable to openly discuss all of the conceivable scenarios in which an amicable resolution is not reached as a group and evaluate their effects on the interested parties. It is certainly a good idea – and a matter of course before reaching an amicable settlement – to identify, assess, and weigh the prospects and risks associated with continuing the conflict.

Although this sounds like it goes without saying, there are nonetheless many parties who do not go through a clearly structured process of weighing these factors. Holding open discussions to assess the various alternatives for reaching or not reaching an amicable resolution means that in factual terms, part of the process of weighing the various factors takes place in the presence of the opposing party, and most of all, in the presence of the mediator. That means the mediator can more readily influence the evaluation of the alternatives and the process of weighing the options than if these consultations were to take place among the parties’ representatives themselves, confined to their own delegations, without the mediator taking part. In particular, the mediator can ensure that all interested parties have a clear sense of the scenarios in which an amicable resolution is not reached as they make their decisions.

During the discussion that follows within a negotiation delegation, there are often different assessments and perspectives, and different personalities also affect the process of forming an opinion. Holding an open discussion as a group beforehand may shift the dynamics within the delegation and enhance the members’ willingness to compromise, because the scenarios for what will happen if an agreement is not reached are probably clearer to them at that point than they usually are.

8. Identifying possible solutions

The task in the next stage of the process is to identify as many conceivable approaches that can be taken to achieve an amicable resolution as possible. Aside from the obvious options, there are almost always less obvious ones, which are more likely to be found in joint brainstorming sessions. For all kinds of brainstorming, the main point is to elicit as many thoughts and ideas as possible, refraining for the time being from making any value judgments or ruling anything out. The mediator’s role is to ask the parties to the conflict to think about possible solutions from the other side’s perspective as well, regardless of their own situations. During this process, the interested parties should be urged to be as creative as possible so that no theoretically conceivable solutions are overlooked. In this regard, the mediator should act as a catalyst for the parties’ creativity. The mere fact that they are considering, at least in part, ways of arriving at an amicable agreement while taking the interests and needs of the other side into account fosters greater understanding for the opposing side’s concerns, whether they are purely financial in nature or involve communication challenges, financial problems, or something else. The important thing is to set down all of the possible solutions so that they can be referred to anytime later on.

9. Assessing the possible solutions

After all of the conceivable approaches to achieving a resolution have been found, designated and set down, the next step is to identify the solution models that are realistic and merit discussion. In this situation, it is beneficial for all interested parties to have been involved in preparing the full overview of all possible approaches, so all sides are aware that resolving the conflict – if it is in fact possible to do so – will require them to select, adapt, and combine the various elements from this list.

The list of possible solutions will very likely include approaches in which the added value discussed above is created by giving something to one party that is more important to that party than conceding it costs the other. Special attention should be paid to seeking out these kinds of elements and including them in an overall concept. If at all possible, a good overall solution should address all of the matters involved in the conflict and, beyond that, all other connecting factors between the parties, since a full package solution makes it much easier to balance out points of contention with concessions or promises made elsewhere, thereby crafting an overall solution that is suitable for consensus and advantageous for all of the parties involved. This means that all levels and topics, whether factual or personal in nature, should be included in the package in order to arrive at a solution that appeals to all sides and establish a relationship that is as free of tension as possible for the future.

As part of this process of identifying a solution, it is occasionally a good idea to refer once again to the alternatives that have been identified in the event that no agreement is reached in order to maintain the parties’ interest in achieving an amicable resolution and ensure that they do not give up their efforts prematurely. Mediation negotiations often seem to have failed conclusively, but can then be started back up again successfully, for example if the parties take a break so they can resume the discussion with renewed energy and after reconsidering the alternatives that will apply if an agreement is not reached. In these kinds of situations, it is crucial for the mediator to retain firm control of the course of the hearing at all times, intervening in situations of escalating conflict or where a breakdown seems imminent and taking procedural measures to affect how the negotiations proceed. This is one reason that mediation involving a strong, experienced mediator has significantly better prospects of success than normal bilateral settlement negotiations.

II. A generator of limitless agreement?

That brings us to the question of what limits the mediator needs to observe. The goal of this section is to shed some light on the borderline issues that typically come up. In general, of course, any mediator who works close to the limits of his or her actual role makes himself or herself more vulnerable to attack, so one side or the other might assert that the mediator’s neutrality has been lost – with the result that the mediator should recuse himself or herself immediately. However, the mediator can guard against this risk to a certain extent by coordinating any activities that could leave him or her open to attack with all of the parties to the conflict in advance and engaging in these activities only if all parties have agreed. For the typical activities in question (such as individual discussions with one of the parties to the conflict), this can already be set out in general terms in the mediation agreement (agreement between the parties to implement mediation) or the mediator agreement (agreement between the parties and the mediator on various points, particularly describing the engagement, compensation, liability and possibly also the nature and limits of implementation).

1. Clarification of facts by the mediator?

Can and should a mediator make himself or herself available to clarify disputed facts (e.g. by examining witnesses), and is the mediator even allowed to do this? This kind of activity clearly does not fall within the scope of the mediator’s role. If the parties wish it, however, it is not prohibited; the parties’ autonomy in determining the course of the mediation allows it. After all, the parties have the option of withdrawing from the mediation process entirely at any time, and events that form part of the mediation process cannot be used in court proceedings concerning the dispute (Article 7 of Directive 2008/52/EC). However, it must be clear to the mediator in such a case that he or she is playing with fire. There are two reasons for this. First, examining witnesses, for example, would pose an elevated risk that one of the parties could allege that the specific nature of the questioning constitutes the mediator’s taking sides; and second, it is questionable whether clarifying factual issues (or supposedly clarifying them, at any rate, as they often remain disputed even afterward) would truly improve the prospects of reaching an amicable agreement or would actually tend to worsen them instead. After all, uncertainty on certain issues – regardless of the nature thereof, and wherever possible, regarding as many open issues as possible – can be viewed as building blocks for an amicable resolution. It is therefore recommended that mediators not be available to clarify the facts of the matter as a basic principle. At most, the mediator should only state that he or she is willing to do this if there is pressure to do so from all of the parties to the conflict, and only if it is extremely unlikely that an agreement would be reached otherwise.

2. Assessment of factual, legal, evidentiary questions?

In principle, the mediator should refrain from expressing any opinions of his or her own on these kinds of questions that are relevant to the conflict, but instead should view the mediator’s role as lying solely in pointing out which questions should be viewed as open and without a certain final answer. Uncertainty in questions of all kinds, especially those concerning the facts of the matter, witness statements, matters of credibility, expert opinions, legal questions, and issues of solvency is a particular reason why it is possible to achieve solutions through agreement and compromise, and why these solutions should in fact logically be achieved in most cases. The mediator must resist any temptation to assume the role of deciding the matter or permitting others to place him or her in such a role; in principle, this applies even if all parties turn to the mediator with this in mind. Before acceding to such a request, the mediator would have to be firmly convinced that the mediation is unlikely to succeed otherwise.

3. Individual discussions?

Individual discussions should be an option, and for the sake of clarity, specific rules on this point should be set down in the mediation agreement or the agreement with the mediator. If one party suspects that a mediator would act unfairly during an individual discussion, that party would be best advised to reject the mediator immediately.

Without violating his or her obligations in any way, a mediator can address the risks that arise for one party in a conflict better and with greater emphasis if the mediator is meeting one on one with that party. This kind of treatment could be viewed – possibly even correctly – as a violation of the obligation of neutrality if it occurred in a discussion attended by all parties. If the parties accept their mediator, they will assume that he or she applies the same standards on both sides. Naturally, the mediator must live up to these expectations and cannot allow himself or herself to be made into a tool for one side.

4. Suggestions for reaching an agreement?

These kinds of suggestions should exist – but only as a last resort. There is no doubt whatsoever that one of a mediator’s main tasks is to be creative in seeking out potential approaches to take in order to reach an agreement and introduce any approaches not identified or designated by the parties themselves into the discussion on a hypothetical basis. However, the mediator should fundamentally interpret his or her role as being merely that of a catalyst for the parties to reach an agreement between them, and not, like an arbitrator, making a suggestion that he or she perceives to be fair as an intermediary. As a precaution, it is a good idea to insert a provision in the mediation agreement and/or the agreement with the mediator stating that the mediator is entitled to make suggestions regarding possible agreement between the parties at his or her own discretion, but the mediator should not exercise this right except if all parties specifically wish it and if the mediator believes that in all likelihood, the parties would not reach an agreement otherwise.

III. Outlook

It appears that there is so far no widespread practice in Europe of using mediation to settle conflicts in economic matters. In the interests of the overloaded justice system and with an eye to settling conflicts faster and at lower cost and conserving resources in general, and in the fundamental interest of dealing with one another in a spirit of cooperation, this should be changed for the good of all.