How many times have you bargained for that nice pair of shoes or that lovely dress, got the price right, but then changed your mind? Doubts like "Do I really need to do this?", "Do I really need it?" "Is this the right thing to do?" What if there is a better deal out there?" That is called "Cold Feet" and happens to us many times even in big ticket negotiations. After all, human beings are no strangers to the fickleness of the mind.
"Cold feet" can be defined as an apprehension or doubt strong enough to prevent a planned course of action. Mediators come across this phenomenon, when everything is agreed and then one of the parties develops cold feet! Albeit mediation being a simpler process when compared to litigation, the process is still arduous. After a long period of back-and-forth dialogue in mediation, some parties develop cold feet at the last moment. This moment of cold feet can be due to various factors. Some of these factors include background of the parties, emotional, psychological, and external influence. Parties could also have decision fatigue which impedes this process.
The role that lawyers can play in dealing with these cold feet situations in mediations was the topic of discussion at #WinThisTogether – the CAMP-IDEX Mediation Advocacy Fireside Chat series. It was an interesting panel of practicing litigation lawyers who have had experience in assisting their clients in mediation. The panel consisting Amit Mishra (Partner, P & A Law Offices), Goda Raghavan (Advocate & Partner, AK Law Chambers) Mithu Jain (AOR, Supreme Court of India) and Srishti Agnihotri (AOR, Supreme Court of India) brought in different perspectives of how to handle a cold feet situation in mediation, with the discussion being moderated by A.J. Jawad, an experienced mediator. The session was prefaced with a very insightful presentation by Charlie Irvine, Senior Teaching Fellow at the University of Strathclyde, UK.
The following interesting points emerged from the hour-long discussion:
Background of the Parties
After prepping the client, one of the main reasons for parties to develop cold feet during mediation, especially at the cusp of the settlement, is the background of the parties and the circumstances that have brought them to mediation. The Party that has been, or feels like having been affected more, tends to develop cold feet, more often than the party from a better background by double guessing the authenticity and adequacy of the settlement proposed.
Emotional Factor
The emotional factors in this situation would be general anxiety and lack of self-confidence around the entire process. Parties are left wondering whether a better outcome could be obtained through the court process. Often proposals are rejected on the apprehension that the settlement proposed is biased in favour of the other side.
Psychological Factor
The psychological factor involved during settlement talks is the long term professional or personal impact of such decisions, sometimes leading to a state of panic. Parties have decision fatigue after a long-drawn negotiation process and while, towards the end, they may agree on the broad issues, there would be disagreement in the details. A pretense of cold feet may sometimes be used as a mediation strategy, which is often referred to as posturing, in the legal fraternity. This is often evident when the parties are referred to mediation while in the middle of a litigation.
External Influence
Advisors, other than the lawyers, also influence the decision and the parties' thought process. Hence, in line with the principle of subsidiarity, the mediator must be one that possesses the skill, knowledge, and ability to balance these factors during the course of the discussion.
Challenges faced by lawyers
When mediation is suggested by lawyers or by the court and lawyers continue to be involved, there are moments when lawyers are placed in a tight spot between having to represent and advise their clients but unable to convince the client on the reasonableness of their ask. During such situations, lawyers should be calm and patient, yet maintaining objectivity. There would be a presence of trust deficit amongst the parties and the lawyers should attempt to be the voice of reason. On several occasions, it would help the client if the lawyer played the devil's advocate and take the emotion out of the situation in a pragmatic manner. The pressure on the lawyers in cases of mediation would probably be higher than in cases of litigation. During a situation when the parties have cold-feet, lawyers could consider requesting assistance from the mediator.
Role of the Mediator
In a mediation, the mediator adds value without affecting her neutrality. One way to effectuate the same is through provision of summaries, which aids parties to realise the issues. Another value addition that a mediator brings in, is positive reinforcement. A mediator is the only person who hears both the sides' strengths and weaknesses. She could be trusted to make a creative move and to diagnose the situation. Mediators bring experience and the sense of impartiality to the table. This gives comfort to the parties that there is a third party interested in the welfare of both the parties and hence mediators' stamp of approval brings in a lot of value. They should be neutral and make sure that the parties do not feel coerced.
Reactive devaluation is a cognitive bias leading to the tendency to not accept proposals put forth by the other side merely because the same was proposed by the other side. Mediators sometimes use the technique called "changing the messenger" by placing the proposal as an option before the party rather than as an offer of the other party. When it is cloaked in the mediators' words, the same may be better received, deliberated, and acted upon. The mediator is often the master of the ship, along with the able aid of the lawyers, when it comes to a successful mediation.
Bridging the gap between lawyers and mediators
Mediation necessitates a distinct set of skills than conventional legal representation. Deal-making abilities will benefit the lawyer and the process of mediation very much. A mediator's role is considerably different from that of a lawyer. A mediator can use her distinct role to make the parties more comfortable and reduce the propensity for developing cold feet. As a conflict resolver, the role of a mediator necessitates the competence to interact effectively with lawyers and parties and generate consensus on how to optimize the interests of both parties. In fact, it has been noted that, in the mediation process, the lawyer who is unprejudiced and amenable, would often deliver the finest assistance to the mediator. Hence, mediators and lawyers should view each other as allies for the purpose of arriving at a settlement for the parties.
Culture
In high context cultures like India, where deference to the authority of a superior or an elder is a norm, taking responsibility for decisions may be a huge challenge for a party and, sometimes, even traumatic. Here again, the position of trust enjoyed by the mediator and the lawyer can confer the status of that missing superior or elder and a party may look upon the lawyer and/or the mediator as a surrogate elder or superior who can give that last-minute assurance to overcome the cold feet.
Ethical perspective
The paramount duty and challenge of any professional is to maintain ethics. It is always a balance for the lawyers to tread the fine line of clients' interest versus professional ethics. Lawyers could attempt asking appropriate questions, gentle prodding, etc., to their clients to bring out reason and understanding for the client on the proposed settlement. However, if the ask of the client stretches beyond the ethical boundaries of the lawyer, then the lawyer should choose wisely between the long-term interests of the client rather than the short-term interests of the lawyer to retain the client.
Counterpart relations
Lawyers owe healthy and collaborative communication with their counterparts about their chances of a settlement. Lack of communication creates a sense of distrust among the parties during a mediation process which percolates to the already strained communication channels between the mediating parties. It is advisable to be upfront in cases of genuine problems. Healthy communications help the other party understand the genuine concerns and not consider them as a method of stalling.
In conclusion, there is evidence to show that the outcomes of mediation are better as compared to the outcomes of litigation. For any successful mediation to come to fruition, lawyers and mediators have to work hand-in-hand. There could be various factors that affect the parties' minds which leads to them developing cold feet. Keeping these factors in mind, lawyers should prepare their clients for such situations.
A J Jawad is a Senior Mediator and Partner at KD Lex Chambers; Goda Raghavan is an Advocate & Partner, AK Law Chambers.