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Managing Expectations-But, by the Defense?

January 22, 2013

One of the new buzz-words-phrases popular in mediation is “managing expectations”.  If you are not familiar with the subject-matter of the phrase, you should be.

Simply stated, managing expectations usually refers to the intentional efforts and methods of others to control the ultimate-outcome expectation of a particular target-party in litigation or any other dispute.

It is a common subject of one the necessary preparations for any plaintiff-claimant and their counsel.  However, the intent of this article is to shed light upon the role that this phrase-term often means with the defense.  The process is similar to that of the plaintiff, but much, much different in its target and in its methodology.

Normally, mediators initially confront (or observe) this conscious practice of  trying to manage/control expectations of any party in mediation caucus.

In the plaintiff-claimant caucus (and, hopefully prior-to), managing expectations normally refers to the efforts of everyone around that plaintiff-claimant to prepare them for an expected outcome at trial that is “reasonable”, should mediation not be successful.  A party’s “knowing” their alternative at trial, it is believed, will allow a much greater chance of mediation resolution/settlement, as options available at mediation are compared.

This pre-mediation and mediation management by their own counsel is a critical element of mediation preparation for any plaintiff-claimant.  See, “Rule One: Know Your Alternative(s) Should Mediation Be Unsuccessful”, December 19,, 2010.

If you represent the defense, however, or want to understand the defense perspective, you may want to reflect upon this phrase-term in its most common use by the defense.

In the defense caucus, although you would think that the defense’s use of this term would be to similarly prepare their own party for mediation negotiation, you would be wrong!  In actuality, the target of the defense for managing  expectations is not their client but their opposition!

And their methodology is to use as many techniques as possible to “reduce” those opposing expectations of the plaintiff-claimant:  about trial  alternative, the practicalities of litigation and thus, the real options at mediation.

First, the defense usually believe they know the alternatives to mediation so much better than their opposition that they wish to use certain methodology to simply adjust the thinking of their opposition.  In short, the defense intends to manage the alternative of trial expectations, not of themselves, but, of the plaintiff!

The defense also often has the advantage of the practicalities of the costs of litigation.  Plaintiff-claimants are normally seeking a net time and cost benefit to their claims.  The defense holds the ultimate control over both of these potential savings.

Finally, the defense, normally being asked to pay monies in return for a resolution, also have the ultimate control over settlement:  insufficient offer/no resolution.  And, they know that every plaintiff-claimant prefers a resolution.

Accordingly, the usual first defense method at mediation is to manipulate this desire for timely, less-costly, resolution comparable to reasonable trial alternatives by managing the expectations of any mediation resolution.  In short, they seek to reduce the plaintiff-claimant’s ultimate mediation expectation in exchange for early resolution.

And, often, if they perceive their efforts are not being achieved, if not addressed adequately by the mediator, any perceived “failure” of this technique can become a direct cause of failure of mediation.

The most common place a plaintiff-claimant will observe the rudimentary attempts of this attempted “outside control” an opponent’s expectations is in the negotiation technique of the defense.

If the defense perceives, for example, that the opening “demand” by the plaintiff-claimant is “unreasonable”, it is an all-too common practice to initially offer an equally unreasonable offer of settlement.  The intent being the message-sent that unreasonableness will be met by unreasonableness.

Another corollary method is found in “reward” negotiation;  changing from a pattern of low offers to more significant ones when the opposition’s position is perceived as “more in line” with their own expectations.

Another technique, a “punitive” measure, is continuing a pattern of very low proposals, regardless of the position of the proponent; knowing that the opponent will likely endure the process to at least await the final proposal to make their final decisions.

I fully understand the reasoning (and usefulness) behind these defense efforts to impact the oppositions’ perception of their own expectations.  From the perspective of the mediator, however, it is fraught with problems.  Some which can lead to mediation failure.

Not every plaintiff-claimant will choose to submit to such negotiation techniques, despite it being in their interests, usually, to do so.

And, many insurance professionals can simply become so frustrated with their inability to control the reasonableness of their opposition in negotiation that they simply quit trying.  See, Mediation Tip: Is “Fear of Failure” Ruining Your Negotiations, December 10, 2011

And, frankly, there are other useful defense tools that, I believe, would be of far greater impact upon the opposition; i.e., using the most critical tool  in mediation: positive negotiation technique.

For example, in many disputes, particularly in personal injury, it has become quite common for the defense to make no offer of any kind until mediation.  Thus, the opportunity to early, and inexpensively, set the pre-mediation tone of where the defense believes is a more reasonable area of discussion is lost.  A return to at least some pre-mediation negotiation would be a much more effective method of signaling the defense position.

And, of course, this new exclusive use of mediation for negotiation has, in many ways, taken out the depth of the direct pre-mediation discussions and communications that were the backbone of settlement long before the mediation procedures became so popular.

Likewise, the failure of many defendants to aggressively use Florida’s proposal for settlement procedures, for among other reasons, to force the plaintiff-claimant to evaluate their own position to return a similar proposal, is another opportunity, pre-mediation, often being lost.

Even at mediation, and before using this “hammer” of negotiation, often the defense misses setting the “reasonable” tone simply by choices made in their opening statement.

And, of course, prudent use, early of bracket negotiation, can be a far more gentle way of conveying one side’s “opinion” to the other, than low-ball/high-ball  or other “punitive” exchanges.

My suggestion is simple.  It is fair to wish to “control” your opposition, particularly if you are the one expected to write the check.  However, using other, easy pre-mediation efforts and better understanding the pitfalls of any unwise use of mediation negotiation, needs to be carefully considered.

Both sides need to manage expectations of their own parties.  However, there are better and more productive means for any side to manage the expectations of the other side than solely attempting control-negotiation at mediation.

Dan, from Sanford, Florida.

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