Spotting and breaking impasse in mediation

The mediator's job is not only to recognise when negotiations are drifting towards a stalemate, but to redirect the process so that settlement remains possible. 

It is important to plan to prevent impasse before the mediation commences. The more fully a mediator understands the business realities, personalities, and constraints of the parties at the outset, the better the odds of steering clear of stalemate. It is important to ensure the right people are at the table, those with true settlement authority. Being cognisant of insurance coverage, indemnity rights, guaranties, and any reservation of rights that may complicate authority should also be fleshed out ahead of time, as well as missing information. 

During the mediation there are key signs to watch for. For example, a party becomes reluctant to counter or adopts a hardline position. The mediator’s task is to work with the parties to help identify what is driving this and determine whether if important missing information can it be obtained during a short break, through a targeted exchange, or in a follow-up session. 

It may be, however, that the concern is merely perception-based – one party may be wary of the manner in which the other side is approaching the process, and develops a view that they are acting in bad faith. Parties often infer the other side’s intentions from offer patterns; if it looks like distrust is rising, say so, and test the perception. Explore what would signal genuine engagement. 

Reality testing is another tool. Encourage the parties to objectively engage in a structured discussion of BATNA and WATNA – best/worst alternatives to a negotiated agreement.  Invite counsel to estimate likely fees, trial timing, and to assign reasonable probabilities to key inflection points such as dispositive motions. Be sure to ask the parties to focus on other costs such as the cost of focusing on litigation versus business operations and opportunities. 

It's important to remember that non-monetary terms can be obtained in a mediation; courts cannot award an apology, a change to ongoing contract terms, ensure confidentiality or a non-disparagement commitment, a future business opportunity, or cooperation that solves a forward-looking problem. Identify what truly matters to each side beyond the economics of the matter and this will help broaden the set of tradable interests.   

A session that ends without agreement can still be a success. When parties leave with a clearer view of risks, costs, and priorities, they are better positioned to make decisions. If issues are crystallised and authority is better understood, the next conversation can be shorter and more productive. Mediation remains valuable because it compresses analysis, reveals what really matters, and creates forward movement even when the last step does not happen that day.

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Leslie A. Berkoff is a Partner at Moritt Hock & Hamroff LLP and Chair of its Dispute Resolution Practice Group. She concentrates her practice in the areas of Dispute Resolution serving as a mediator and arbitrator, as well as, Corporate Restructuring work working in both arenas nationally and internationally. Leslie is also Regional Chair North America of the GGI Debt Collection, Restructuring & Insolvency (DCRI) Practice Group.