According to a traditional dynamic in a case with multiple defendants, a plaintiff makes a demand (or a new demand), and then each defendant has to decide how much to indicate it is willing to contribute to a settlement (with that calculation being based in part on the plaintiff’s demand and in part on the defendant’s estimate of what the other defendants might contribute). The incentives for false signaling, delaying, and extremism are strong. Are there alternative approaches?
Just recently, the William Mitchell Law Review published an article by Minnesota attorney/mediator/arbitrator Mark Heley entitled, Mediation of Construction Cases Using ‘Blind Negotiations’: Can Providing Less Information Generate Better Results? (34 Wm. Mitchell L. Rev. 273 (2007)). I have not found the article on the web other than through for-fee subscribers, but I have emailed the author and will post a link if he can provide one.
The basic idea behind blind negotiations is summarized in the following passage from Heley’s article:
When the mediator and parties elect to negotiate under a blind or double blind format, they dramatically reduce the extent of information provided to each party regarding interim settlement positions. The mediator typically publishes the claimant’s opening demand to all defending parties. From that point forward, until either the case settles or the parties reach impasse, the mediator negotiates with confidential numbers from all parties. Under this approach, the mediator will not disclose a single party’s settlement offers or demands to any other party up to and through the final settlement or impasse.
In response to the opening demand, the mediator will speak to all defending parties to confirm the claimants’ opening demand and secure a contribution toward settlement from all defending parties. The mediator will then add up the contributions of all the defendants and disclose the total of these contributions to the claimant as the collective offer. The mediator will not disclose individual contributions from each defendant. After the plaintiff considers the opening offer and responds with a new demand, the mediator will keep the new demand confidential. Instead of disclosing the new demand, the mediator simply discloses to each defendant the gap between the claimant’s new demand and the defendants’ collective offer. Then, the mediator again meets with each individual defendant to determine if additional contributions can be secured toward settlement.
As the mediation progresses, the claimant will know the total amount offered by the defendants but will not know any individual contribution from a specific defendant. Each defendant will know the total amount it agreed to contribute toward a settlement and the gap between the demand and the collective offers. As the gap is reduced, each defendant can ultimately determine what contribution will be required on its behalf in order to reach a settlement point. If a settlement is reached, the claimant will know the total amount offered and ultimately accepted to settle the case. The claimant will not know, however, how the amount was raised or any individual defendant’s contribution toward the settlement. Additionally, each individual defendant will not know the total settlement amount, but instead will know only its respective contribution toward the settlement amount. Blind negotiation prohibits any single party from knowing what the other parties contributed to the final settlement. Further, no party other than the claimant will know what the claimant accepted as a final settlement amount.
The basic method reminds me very much of what has come to be called the “Fishy Calculator” approach to dealing with multiple defendants. I first learned about the Fishy Calculator from Bob Creo, and it was later described in Jeff Krivis’s book Improvisational Negotiation. Heley’s article also describes several variations on blind negotiations, some of which incorporate even greater levels of confidentiality or incorporate pieces of the One-Text Method or Single Negotiation Text method.
The author raises briefly the ethical challenges posed by the drafting role the mediator must take if the blind negotiations are to remain blind, and my suspicion is that in many jurisdictions, these challenges are significant. I’m sure the ethical waters can be navigated successfully on this point.
One of my first mediations ever involved a construction dispute. That was about 17 years ago. The last time I mediated a construction dispute was about 17 years ago. But I think the article’s title understates the applicability of this approach to the extent it appears focused uniquely on construction cases. (For example, I first heard of it in the context of a personal injury case.)
The article is troublingly clear and concise. It is obvious that the author is not a law professor.
Michael Moffitt
