Peter poses an interesting and very common situation where the mediator believes he or she has knowledge about a legal issue that could affect the outcome of the case that neither side seems to have uncovered. In Peter’s example, he was dealing with a dischargeability case on a debt arising after a non-judicial foreclosure. Peter posits that California’s anti-deficiency laws would preclude collection on the debt.
Peter proposes four alternatives for the mediator to consider. One, disqualify himself; two, explain to the creditor’s attorney why the anti-deficiency laws kill his case and suggest creditor’s counsel come up with a more reasonable demand; three, mention the anti-deficiency laws to both parties and counsel in a joint session; or four, say nothing about the anti-deficiency laws to either side.
For different reasons, Peter rejects each of these alternatives and asks his readers how we might have handled the situation.
I would start by recognizing the proper role of the mediator. No one gave us black robes or gavels. It is not our job to do justice or see that justice is done as we may perceive it given our own idiosyncrasies. That is what the judge will do if the parties can’t settle. It is our job to help the parties find common ground to re-solve their dispute. It is our job to help them avoid bearing the risk of justice meted it out by an idiosyncratic judge.
I’m not in favor of alternative number one because that seems like a copout to me. The parties selected me as a mediator. I believe it is my duty to do my best to help them find common ground. Will they be better off with a mediator who doesn’t understand the issues? Probably not.
Peter rejects option four because it does not seem to be “doing the right thing.” I am not in favor of alternative four but for a different reason. I’m not worried that the parties may settle in a way that does not comport with my notion of the “right thing.” Rather, I am reluctant to say nothing because leaving everyone ignorant yields unpredictable results. One of the tools in the mediator’s toolbox is to help the parties form realistic expectations regarding possible outcomes. It would be tough for me to build rapport and credibility with the parties when in my heart I think they’re missing the boat.
I’m not in favor of alternative number three, trying to educate both parties. When a party has unrealistic expectations because ignorance leads them to overvalue their position, they are unlikely to make a settlement because they will demand too much. This is not necessarily true when a party undervalues the strength of their position because of ignorance. Educating the overconfident facilitates settlement. Educating the underconfident does not.
Educating the ignorant party who undervalues her position might appeal to my sense of justice, but it will be counterproductive to settlement. That would also potentially overstep the line between acting as a neutral and acting as an advocate for a party by giving them legal advice.
I recommend a variant of alternative number two. Rather than tell the creditor’s counsel that they missed something that I, in my infinite wisdom, will share with him, I would simply ask counsel, perhaps out of the presence of his client, whether he has considered the impact of California’s anti-deficiency laws on the ability to pursue the non-dischargeability claim. I’m likely to encounter one of three responses.
- “No, I haven’t.” If that’s what counsel tells me, I would tell him perhaps he should, and if I’m asked, I might share what I know about that issue.
- “No, I haven’t, but I don’t believe the debtor’s counsel has either. Therefore, as long as they remain ignorant, I have the upper hand and I don’t want to give it up.” If that’s what counsel tells me, I might ask what he thinks will happen if the debtor hires a different attorney who knows the law in this area.
- “Yes, I have, and here is why it doesn’t affect the outcome.” If that’s what counsel tells me, I might consider myself to be better informed after our discussion. The real point is that mediators should exhibit some humility in their communications with parties and coun-sel. Asking them probing questions is going to work a whole lot better than telling them what you think they don’t know.