Issues for Sophisticated Users of Construction Mediation: When, How, and by Whom? Prof. John Barkai William S. Richardson School of Law University of Hawaii Issues for Sophisticated Users of Construction Mediation: When, How, and by Whom? Prof. John Barkai William S. Richardson School of Law University of Hawaii

www2.hawaii.edu/~barkai

Handling of Problems designed by Liu Young Western - American Asian

Shichi Go San 7-5-3

“Even a sheet of paper has two sides” Japanese Proverb

Perspective View

"Then it's agreed. Watson, Smith, Teller, and Wilson go to Heaven; Jones, Paducci, and Horner go to Hell; and Fenton and Miller go to arbitration.

Common Forms of Dispute Resolutions Negotiation Negotiation Mediation - Conciliation Mediation - Conciliation Arbitration Arbitration Trial in Court Trial in Court

Common Forms of ADR in Construction Partnering Partnering Dispute Review Boards Dispute Review Boards Mediation - Conciliation Mediation - Conciliation Arbitration Arbitration

International Arbitration – NGOs – is not used often – 3,000 per year?

Why use mediation? Parties Faster, cheaper, confidential, control Lawyers Help with other side & clients Mediators Psychology of mis-evaluation, perception, over confidence, biases, etc.

Some Psychological Issues Affecting Perception 1. Attribution 2. Selective Perception 3. Framing 4. Anchoring 5. Reactive Devaluation 6. Risk Preferences (Prospect Theory) 7. Endowment Effects 8. Behavioral Traps

の検索結果 Okame Hatimoku (Japanese proverb) The onlookers see more than the players

Plaintiff’s View of the CaseDefendant’s View of the Case

Tendency to devalue offers and concessions made by made by the other side 25 Reactive Devaluation

Power Imbalances

Styles & Types of Mediation Facilitative, evaluative, transformative, narrative, etc. Community, commercial, construction, family, employment, probate, postal service, tort, peer mediation for school-aged children, etc. Narrow or broad Caucus or non-caucus

Mediation is a noun 名詞 meishi Focus on the adjective 形容詞 keiyoushi

Facilitative Evaluative Styles of Mediation

FACILITATIVE do NOT suggest solutions EVALUATIVE evaluate & suggest solutions TRANSFORMATIVE not concerned about solutions. They want to “empower” and “transform” the parties. United States Postal Service

Facilitative mediators ASK Evaluative mediators TELL

Evaluative Narrow Broad BroadNarrow Facilitative Narrow Broad Evaluative Facilitative The Riskin Grid

When to mediate? After critical discovery; before full discovery. Have enough facts to make good decisions. More information is not better information – selective perception

Tolanski Curve Illusion

Who can/should/does mediate? U.S. – lawyers Anyone who can build confidence and has the process skills Know law & facts, prepared, persistent, creative, ability to evaluate Goldberg & Shaw data later

How to mediate? Very much open to question Different styles can work ABA Task Force Report later

Goldberg & Shaw 2005 & 2007 Traits of Successful and Unsuccessful Mediators American Bar Association’s Section of Dispute Resolution 2008 Task Force on Improving Mediation Quality

Mediation Advocacy How to “Borrow” a Mediator’s Powers Problem-Solving Advocacy in Mediations Harold Abramson (2005) Mediation Advocacy How to “Borrow” a Mediator’s Powers Dwight Golann Problem-Solving Advocacy in Mediations Harold Abramson (2005)

Controls the format & process Is usually open to process suggestions Separates or keeps the parties together Moderates the negotiation Gathers data Keeps confidences Is seen as neutral Actually is neutral Can offer a “mediator’s proposal”

What does it take to be a mediator?

American Bar Association’s Section of Dispute Resolution Task Force on Improving Mediation Quality

The 2008 ABA Report on Improving Mediation Quality (civil disputes with lawyers) Preparation Customization Evaluation Skills Persistence

Preparation Pre-mediation discussions Joint v. separate Face-to-face v. phone With or without parties Users want input into the process Mediator’s approach Will the necessary parties be present?

Preparation - continued Understand interests How can it settle? Use opening statements? Joint or caucuses for certain issues Prior settlement discussions Clients v. lawyers speak

Customization Adjust mediation to fit the parties needs Opening statements Useful? Will entrench?

Analytical Input - Evaluation Sophisticated mediation users wanted mediators to provide analytical input (evaluate) 95% important to make suggestions 75% important to give opinions

Users said (it was helpful to) % Ask Pointed Questions That Raise Issues; Give An Analysis Of Case (Including Strengths And Weaknesses); Make Predictions About Likely Court Results; Suggest Possible Ways To Resolve Issues; Recommend A Specific Settlement; Apply Some Pressure To Accept A Specific Solution

Persistence 98% “very important” Keep at the table Exert pressure to settle Get them back to table When the going gets tough, the tough …

Construction Mediations Differ Pre-mediation activities Impasse breaking strategies Complex, commercial mediations with lawyers representing the parties

Pre-Mediation Activities Mediator selection Pre-mediation meetings Pre-mediation submissions

Impasse Breaking Strategies Facilitative v. Evaluative

Goldberg & Shaw 2005 & 2007 Traits of Successful and Unsuccessful Mediators

Study 1 "How do you account for your success as a mediator? “ 75% said: Ability to develop rapport with the disputing parties Develop a relationship of understanding, empathy, and trust

Why is that so important? Encourages the parties to communicate more fully with the mediator, often providing the mediator with the information the mediator needs to help the parties craft a settlement:

How to build that relationship? Empathic listening, which conveys the message that the mediator truly cares about the parties' feelings, needs, and concerns (substantial majority) The mediator’s reputation for being honest, ethical, and trustworthy (some mediators)

What does a mediator do after establishing rapport? Generate novel or creative solutions Generate novel or creative solutions Attribute the mediator’s own creative ideas to the parties Attribute the mediator’s own creative ideas to the parties Use humor Use humor Combine patience and tenacity Combine patience and tenacity Persistence Persistence

Other tactics Focus parties on consequences of not settling (BATNA / WATNA) Focus parties on consequences of not settling (BATNA / WATNA) Push at the appropriate time Push at the appropriate time Assist them to understand each other’s needs Assist them to understand each other’s needs Remain optimistic Remain optimistic

Study 2 Lawyers & Parties – What lead to success? Mediator’s ability to gain the parties’ confidence (friendly, empathic, likable, etc.) Mediator’s ability to gain the parties’ confidence (friendly, empathic, likable, etc.) Mediator’s high integrity (Honesty, neutrality, trustworthiness, protection of confidences, etc.) Mediator’s high integrity (Honesty, neutrality, trustworthiness, protection of confidences, etc.) Mediator was smart, well-prepared, or new the relevant contract or law Mediator was smart, well-prepared, or new the relevant contract or law

Study 3 Why did mediators fail? Lack of confidence-building attributes Lack of confidence-building attributes Lack of process skills Lack of process skills Lack of evaluation skills Lack of evaluation skills

Lack Of Confidence-Building Attributes Mediator lacked integrity, neutrality, empathy; did not understand the issues or law, or was not well-prepared Mediator lacked integrity, neutrality, empathy; did not understand the issues or law, or was not well-prepared

Lack of Process Skills Acted just as a messenger Acted just as a messenger Not persistent – quit too soon Not persistent – quit too soon Didn’t propose solutions Didn’t propose solutions Had bad timing Had bad timing

Lack of Evaluation Skills Faulty or no evaluation Faulty or no evaluation