Victoria Pynchon lays down the gauntlet (read: politely, generously and substantively replies) in response to my post about opening you and your client up to ‘social influence’ both as a comment and as a blog post.

I’m honored! I’m a big fan.

Pynchon writes (I’m mixing both her comment and blog post here):

The "trick" is to help the lawyers find where their bottom lines OVERLAP. It’s a shame when the parties fail to find that point of overlap because it’s a missed opportunity to make a mutually beneficial deal. It’s also a shame when, for example, an apology or an expression of feeling can cause the parties to move close enough together to cause one or both of them to close the gap between bottom lines.

A friend of mine who is a psychoanalyst once told me that patients get better in therapy despite their analysts’ "technique."  It’s the relationship that’s curative, she told me.  A patient in need will find the water of healing in the desert of a therapist’s theory.  If the same can be said of mediation — that it’s the relationship that’s curative — the question that naturally arises is whose relationship?  

Why the disputants of course, which is why I recommend joint sessions.  Not stylized adversarial position-based, chest-thumping, shoe-banging joint sessions ("we will bury you") but interest-based, inquisitive, collaborative, reality-testing mediator-and-attorney directed negotiation sessions. 

It’s a great point — but, in my opinion and experience, the application of the idea will fail more often than it will work.

Why ZOPA Doesn’t Usually Apply to Lawsuits

First, the zone of potential agreement ("ZOPA") is a major concept in business negotiation, no doubt, and it’s an important intellectual tool.

When it comes to settling lawsuits, though, I think applying it will more often than not lead people astray. In business or commerce, the parties usually have goals that don’t align per se, but do intertwine. E.g., buyers and sellers both have the same goal: the transfer of the property in question. They’re just figuring out how to do it.

The parties to a lawsuit do not have intertwined interests: they have directly adverse interests. Unless there’s some possibility of a future relationship, the defendant doesn’t want to resolve the conflict: they want the plaintiff to drop their frivolous claim. In their mind, their best alternative to a negotiated agreement ("BATNA") is for the plaintiff to crawl in a hole and die.

Same with the plaintiff. Unlike buyers and sellers, who usually don’t get much joy out of their ‘conflict’ as a conflict, the plaintiff usually prefers imposing a conflict on the defendant (who the plaintiff believes cast the first stone) in pursuit of justice, an imposition they will only relieve for at least "full" compensation.

That is to say, ZOPA works best when the parties consider their claims to be assets like any other; if there’s emotional baggage around the assets, so be it, we can deal with that, too, with sufficient venting.

The problem is that most parties don’t consider their claims to be assets; the problem isn’t that there’s emotional baggage around the economic understanding, it’s that the parties interpret their dispute as fundamentally non-economic.

I understand why plaintiffs do that (they feel they have been wronged, not that they’ve acquired an asset for sale), the part that gets me is why defendants and even insurance carriers don’t think of their defenses as an asset. I’ve seen more cases than I can count where an insurance carrier gleefully paid 50% or more — sometimes over 100% — of the final settlement amount in legal fees before even humoring real settlement. If everyone’s behaving rationally, that should not happen. IMHO, the biggest stumbling block in most cases is the defense refusal to acknowledge the validity/possibility of plaintiff’s claim. That refusal encourages and reinforces the non-economic aspects of the claim.

Then, after years of pain, and hours of bull at a settlement conference, the defendants finally make a real offer that’s framed as take-it-or-leave it. Little wonder so many walk and keep going until they get a better offer, regardless of the merits of the initial offer.

The Unicorn Settlement: How Do We Find It?

I’ve heard of a mythical beast, which I’ll call The Unicorn Settlement, where two hostile parties on the verge of a lawsuit get lawyers, almost file suit, and then, through deft representation, settle their differences peacefully and move on.

Let me exclude from The Unicorn a particular class of dispute, where two businesses with an ongoing relationship have a big dispute. I exclude that because, while I’ve seen many such disputes resolved pre-litigation, it has always been in the context of an ongoing relationship the value of which exceeds the value of the dispute. So I don’t call that a "settlement of a case," I call it a "continuation of a business relationship."

I entered the law expecting The Unicorn to be rare but real; by this point, I have been trained by defense lawyers not to bother to check for it. I still usually do, throwing out what I think is a perfectly reasonable offer early on, which is routinely ignored or dismissed by a letter that gratuitously refers to my claims as baseless, frivolous, or made in bad faith.

So that’s my biggest question to you: how do you suggest I get defendants, prior to the courthouse steps, to even enter the mindset that there’s a valid claim and mediation / settlement should be considered? Reframed in words closer to your post: what can I do to (a) get the joint session to happen and (b) ensure everyone’s in the right mindset?

I start every case telling the plaintiff, "this is about money." The civil justice system can’t give you anything else; it can use money to fix what can be fixed, help what can be helped, and make up for the rest. (Cf: David Ball on Damages). It’s crass. It’s unfair. It feels cheap. All true: but either keep your eye on the ball or at least start looking for it, because the judge and jury can’t give you anything else.

Not too long ago I attended an all day settlement conference in front of a Federal judge in a case involving three defendants. Discovery was done, expert reports were in. Defense counsel recognized the likelihood of plaintiff winning at trial and the possibility of substantial liability. Judge had ordered the parties come not just with settlement authority, but with the actual person who had the authority.

Defendant #1 had a reasonable offer and was ready to talk. Defendant #2 had a reasonable offer and was ready to talk. Defendant #3 "didn’t know." Their answer wasn’t "no," it was "don’t know." "Don’t know" if they want to settle, and obviously "don’t know" any numbers. [You can imagine the judge’s reaction.]

Point is: their ZOPA wasn’t "zero," it was a null value, even after we were almost trial-ready! We were light-years away from the Unicorn Settlement problem and we had the same problem anyway, despite even a court order designed to avoid it.

What do I do about D3 and others like D3 in the future? The Judge got them to come to the table and to move; not sure how I would have, or why I should bother. I would have taken them to trial. They can come to me, on the courthouse steps, with a solution.