1. Definitive Creative Impasse-Breaking Techniques Molly Klapper, Editor New York State Bar Association, DRS Publication
American Bar Association
Section of Dispute Resolution
Spring 2012
Washington, D.C.
Topic of Impasse intrigues all mediators. At times we feel we have hit terrain where no man (or woman) has gone before. Other times, the problem is all too familiar, although the solution seems to be out of reach.
Simeon H. Baum, Esq., Resolve Mediation Services, Inc., New York, NY (212)

2. Sausage Making Laid Bare –
American Bar Association Section of Dispute Resolution Annual Meeting, Spring 2012, Washington, D.C.
Sausage Making Laid Bare –
The Consensus Based Risk Allocation Model & Other Approaches to Multiparty Naysayers
Today’s topic involves a familiar problem. I would like to share with you one approach to solving this problem. It involves a simple mechanism, although some of the knottier problems associated with implementing this solution bring to mind the best ignored art of sausage making.
Simeon H. Baum, Esq., Resolve Mediation Services, Inc., New York, NY (212)

3. Mutual Finger Pointing in the Multi-Party Case
Denial of Fault
Obsession with Percentage Share
Refusal to Pay More than X%
Insistence that other Party Must Pay Y%
Will pay up to X% if other Party Pays At Least Y%
Here is the problem. As mediators, we love to poll one another. How many of us here have faced this problem:…?

4. Go with the Flow
Give the Parties What They Want – Opportunity to Express Their Views, Needs & Assessments
Rather than Oppose, Use This Information
Rather than Impose (Mediator’s View) Develop Consensus Based Risk & Case Value Assessment
Ultimately, with Parties’ Permission, this can be used to Resolve Case
Now we turn to one solution. Now this presentation comes from one chapter I wrote for Molly’s book. There was another Chapter: Technique of No Techniques – A Paean to the Tao te Ching. That Chapter made the point that more fundamental than any single technique is the mediator’s presence. A deep, listening presence that responds to and is connected with the parties. That waits, listens and permits the matter to work itself out. That is there for the parties. At the heart of that view are centrist mediation values, of facilitation, non-coercion and party freedom, that I think are most beautifully articulated by the 2,500 year old classic: the Tao te Ching. The concrete approach described here also stems from giving power to the parties themselves.
Balancing Party Freedom, Letting it Happen, Using the Power of the Group to come up with a structure and direction to move talks forward.
“Consensus Based Risk Allocation Model.”

5. Poll the Parties Take Notes
What is the likelihood the Plaintiff will win at trial, and, if so, how much?
What percentage liability will be allocated to each Defendant?
How much will it cost to try this case?
Take Notes
Ask 3 Questions.
Put Answers into Excel Spreadsheet.
Examples to Follow.

6. % Chance Plaintiff Wins
Damages
Plaintiff's Comparative Share
Resulting Case Value
Party A
Party B
Party C
Party D
Party E
Party F
Party G
Party H
Party I
Party J
Average
Quite often in these cases, there is little doubt that the Plaintiff will win. The Question is how much and who is liable in what percentage.

7. Percentage Allocations
Party A
Party B
Party C
Party D
Party E
Party F
Party G
Party H
Party I
Party J
Average
So, here we see the % allocations.

8. Costs Through Trial
Party A
Party B
Party C
Party D
Party E
Party F
Party G
Party H
Party I
Party J
Average
Now we add in the costs.

9. Develop Three (3) Pots Trial Outcome & Transaction Costs
Probable Settlement Number
Graduated Lesser Offer Pots (GLOP)

10. Trial Outcome & Transaction Costs
A Collective, Predictive Exercise
Aided By Risk & Transaction Cost Analysis
Depends on Developing Trust in the Mediator & the Process

11. Divvy It Up Collective View of Percentages
Overcoming Bias of Single Party with Law of Averages
Overcoming Gamesmanship by Single Party

12. Convert To $$$ Move from Percentages
Shift from Comparative/Relational Contribution Analysis
Apply to Predicted Trial Outcome
Apply to Combined Trial Outcome & Costs
Why the bear with his head in the honey pot? By shifting to dollars, we can move defendants from looking over their shoulders at what the others are doing.

13. Power of Numbers
Collective Sense Overcomes Individual Party Skewing – Spinmeister, Hardball Negotiator, Low Profiler, Finger Pointer
Tyranny of the Majority? The Target Defendant
Finding “Fat”
Interesting Questions on Mediator’s Role, candor, transparency, quality of the process, long term impact on repeat users of the mediator and on mediator him or herself, interparty fairness.

14. 20 Parties Percentage Allocations Party A (Hardball Negotiator)
Party A (HN)
0.05
Party B
0.25
Party C
Party D
Party E
Party F
Party G
Party H
Party I
Party J
Party K
Party L
Party M
Party N
Party O
Party P
Party Q
Party R
Party S
Party T
Average
0.24
We can see in these three slides, the power of mass numbers to reduce the impact of aberrant views.

15. 10 Parties Percentage Allocations HN Party A (HN) 0.05 Party B 0.25
Party C
Party D
Party E
Party F
Party G
Party H
Party I
Party J
Average
0.23

16. 5 Parties Party A (HN) 0.05 Average 0.21 Percentage Allocations HN
Party B
0.25
Party C
Party D
Party E
Average
0.21

17. Probable Settlement $$$
Based on Conversations with Plaintiff
Guided by Conversations with Defendants, Crystallized through Caucuses and Spreadsheets
Can Be Seen As Percentage of Averaged Trial Outcome & Transaction Costs
Interesting to Compare to Predicted, Averaged Trial Outcome

18. Graduated Lesser Offer Pots (GLOP)
Permit Incremental Increases
Made as Percentage of Predicted Settlement Pot
Builds Trust with Defendants
Creates Sense of Control
Offers Stepped Approach to Gaining Contributions From Reluctant Defendants

19. Joint Defendant Conference Call
Explain Process
Get Permission - Confidentiality
Consensus Based Risk Allocation
Questions on Mediator Adjustments
Time for Consideration
Telephone Caucuses
Further Adjustments
All At Once or Pot by Pot

20. OUT TAKES

21. Assumption: Plaintiff Wins Every Time
Damages
Plaintiff Share
Resulting Case Value
Party A 1
$ 2,800,000.00
$ ,866,666.67
Party B
$ 2,300,000.00
0.25
$ ,725,000.00
Party C
$ 2,775,000.00
0.2
$ ,220,000.00
Party D
$ 2,500,000.00
$ ,875,000.00
Party E
$ 2,250,000.00
0.33
$ ,507,500.00
Party F
Party G
$ 3,250,000.00
$ ,166,666.67
Party H
$ 3,750,000.00
$ ,812,500.00
Party I
$ 2,000,000.00
0.5
$ ,000,000.00
Party J
$ 3,100,000.00
$ ,100,000.00
Averages
$ 2,702,500.00
$ ,999,833.33
Case Value Rounded Up:
$ ,000,000.00
So this is what it looks like with the numbers plugged in.
Here we have average damages of 2.7MM. After deducting the average Plaintiff’s share of .27, it produces about 2MM in projected award to Plaintiff.

22. Assumption: Varying Views of Plaintiff's Likelihood of Getting Any Damages/Winning Anything
Plaintiff Wins
Damages
Plaintiff Share
Resulting Case Value
Party A
0.75
$ 2,800,000.00
$ ,400,000.00
Party B
0.8
$ 2,300,000.00
0.25
$ ,380,000.00
Party C
0.9
$ 2,775,000.00
0.2
$ ,998,000.00
Party D 1
$ 2,500,000.00
$ ,875,000.00
Party E
$ 2,250,000.00
0.33
$ ,507,500.00
Party F
0.66
$ ,138,500.00
Party G
0.5
$ 3,250,000.00
$ ,083,333.33
Party H
$ 3,750,000.00
$ ,812,500.00
Party I
$ 2,000,000.00
$ ,000.00
Party J
$ 3,100,000.00
$ ,790,000.00
Averages
0.801
$ 2,702,500.00
$ ,648,483.33
The prior chart shows a 100% likelihood of Plaintiff’s winning. This one posits some chance of a defendants’ verdict.
Likelihood of Winning At Trial can itself be used as basis for negotiation with Plaintiff and Defendants.

23. Costs Through Trial
Party A
$ 250,000.00
Party B
$ 200,000.00
Party C
Party D
Party E
$ 150,000.00
Party F
$ 175,000.00
Party G
Party H
Party I
$ 75,000.00
Party J
Average
$ 205,000.00
Rounded Average:
$ 200,000.00
Here we are with numbers plugged in for transaction costs.
Worth weighing against risk of loss at trial. Collective costs can outweigh risk of loss at trial.

24. Assumption: Plaintiff Wins Every Time
Trial Outcome
Costs through Trial
Combined Case Exposure
Party A
$ ,866,666.67
$ ,000.00
$ ,116,666.67
Party B
$ ,725,000.00
$ ,000.00
$ ,925,000.00
Party C
$ ,220,000.00
$ ,470,000.00
Party D
$ ,875,000.00
$ ,075,000.00
Party E
$ ,507,500.00
$ ,000.00
$ ,657,500.00
Party F
$ ,000.00
$ ,900,000.00
Party G
$ ,166,666.67
$ ,416,666.67
Party H
$ ,812,500.00
$ ,062,500.00
Party I
$ ,000,000.00
$ ,000.00
$ ,075,000.00
Party J
$ ,100,000.00
$ ,350,000.00
Av/Total
$ ,999,833.33
$ 2,050,000.00
$ ,049,833.33
Now we see the combined Case exposure.
Compare Average predicted Trial Outcome to Cumulative Costs Through Trial. Costs can be averaged where it appears certain defendants might be low balling estimate of trial costs.

25. Percentage Allocations
Party A
Party B
Party C
Party D
Party E
Party F
Party G
Party H
Party I
Party J
Total Percentage
0.2
0.25
0.15
0.1
0.05
0.025 1
0.3
0.35
0.075
0.125
Average
So, we can see that with the law of averages, aberrant numbers are minimized by the other parties’ views. Power of group numbers is hown in greater detail in Slides

26. Trial Outcome
Party A
$ ,000.00
Party B
$ ,000.00
Party C
$ ,000.00
Party D
$ ,000.00
Party E
Party F
$ ,000.00
Party G
Party H
Party I
$ ,000.00
Party J
TOTALS:
$ 2,000,000.00
When we apply the collective assessment of each defendant’s percentage of liability to the trial outcome, we can get the hard dollars that keeps the bear from looking over its shoulder at the others.

27. Trial Outcome & Costs
Party A
$ ,000.00
Party B
$ ,000.00
Party C
$ ,000.00
Party D
$ ,000.00
Party E
$ ,000.00
Party F
$ ,000.00
Party G
Party H
Party I
$ ,000.00
Party J
$ ,000.00
TOTALS:
$ ,050,000.00
Same for combined trial outcome and costs.

28. HOW GLOP WORKS Here is an Example of 3 GLOPs. Trial Outcome
Trial Outcome & Costs
Projected Settlement
Smallest GLOP
Largest GLOP
Party A
$ ,000.00
750,000.00
375,000.00
250,000.00
$ ,500.00
Party B
$ ,000.00
600,000.00
300,000.00
200,000.00
$ ,000.00
Party C
$ ,000.00
550,000.00
225,000.00
150,000.00
$ ,500.00
Party D
$ ,000.00
400,000.00
100,000.00
$ ,000.00
Party E
350,000.00
Party F
$ ,000.00
275,000.00
75,000.00
50,000.00
$ ,500.00
Party G
Party H
Party I
$ ,000.00
125,000.00
37,500.00
25,000.00
$ ,250.00
Party J
TOTALS:
$ 2,000,000.00
4,050,000.00
1,500,000.00
1,000,000.00
$ 1,250,000.00
Here is an Example of 3 GLOPs.