The Second European Mediation Congress
International mediation
Parallel workshop session: International mediation
Karl Mackie, Chief Executive, CEDR:
… says there's a lawyer in international cases advising clients before you should really go into the mediation field from observing and sitting alongside mediators in California, and then phoning back to the UK and helping with all the information of CEDR and the ADR movement in Europe. So Eileen is going to start with some of the concepts and I'll continue with [inaudible].
Eileen Carroll, Deputy Chief Executive, CEDR:
Good afternoon everybody again. We're going to move through this quite quickly. The, what is mediation? Well I suppose the important thing, particularly in an international context, is to have no assumptions, so that you do need to be careful when you've got international counsel and parties that their understanding of the process is the same as your understanding of the process. And this is why I think the remarks that were made by a number of people this morning but particularly from Jeremy Sanderson, who may be here, I don't know whether he is, but from Clifford Chance, who was talking about the need to ensure that when we're mediating international cases, that we do take the time and the care to find out what the party's expectations are, the level of preparation, and whether indeed the things that Tim Hardy was talking about – very important in terms of the law of the contract and the law of the mediation agreement, the law of procedure. I mean, all the things that are pertinent to international litigation and arbitration are also as pertinent and relevant to mediation. I will lay down a marker now, that I would be quite disappointed if the European directive isn't enacted as originally envisaged, because I think although it wouldn't be completely perfect, it would at least put these things central stage and make them more, make them as relevant as they need to be.
These are just sums. Others in the room will have seen other challenges, but just to put up some of the factors that you will have seen. I've personally experienced in mediations, and indeed in international disputes, but obviously the monetary factors, what currency you are working in. I have often seen clients actually not knowing, arriving at a mediation, and having not decided whether they're going to actually be looking at their possible damages in Euros, in Yen, what currency are you in? And I mean, the whole issue, because a lot of this stuff is about money, that can't be underestimated.
The role of government bureaucracy. Again my own personal experiences both in mediation and in practice. In some parts of the world, of course, you have frequent changes of government, you have state industry, so there's a whole, another element that is often there. The threat of instability, well of course we're seeing that more and more recently, but looking back in the 90s, the wars that broke out, I remember with clients Bectel, when the war broke out in Kuwait. I mean, these things just happen, like boom! And suddenly and there's interaction, you weren't expecting it, and you've got to deal with the dynamics.
The cultural and ideological diversity. Again it may, it's kind of obvious. We know it's there. I would say it's also there, you know, if you go to the United States, the way you deal with things on the West Coast, the way you're dealing with things on the East Coast, or even between New York and Washington, so again it's back to no assumptions. And we know the importance of creating empathy, and proper communication is not just about language. It's very important, but it's actually how to deal with people so that you've got another heightened level to deal with when you've got the international dimension. And I'm sure some of those issues will come out in the case studies and may come back in some of your tips.
Language. I was talking the other evening to a very nice French lawyer from BAT, and she was telling me in mediation she did with one of our mediators, Laurence Kershen, where it was incredibly important, but one of the parties, she was there and able to speak in the mother tongue for this party. I mean, it just made all the difference that she could, as an assistant mediator, communicate in French with this party. And it was critical to reaching settlement.
Corporate pressures and structures, again, in infrastructure projects, power projects, all kinds of things that we've probably all had, some of us had experience of, the fact that you have these, the way that things are run globally, and how things are run on the ground. I certainly had experience of us working with Californian clients doing infrastructure projects in Asia. How they dealt with their management on the ground, how do those people work with the Indian managers and local managers, and just the whole kind of infrastructure of decision making, and that obviously has impacts as disputes unfold and how that's managed or not managed, and then what you need in terms of getting a resolution, particularly in projects which are going to go on. You know, the thing is, the relationship can't just end. It actually needs to continue.
Again, one could write down probably a whole book on why do negotiations fail, and why do people get into deadlock, but again different expectations, again between the, what the commercial, what the plant managers may expect, or the people on the ground expect, the commercial people, the lawyers. I mean, we have different measures of performance. So you have a contract measure of performance, but you may have other measures of performance, including budget. So it's not that different to domestic at one level, but it's just multiplied.
The politics of the organisation, the cross-cultural and organisational communication I've touched on. The no decision makers. I mean, I've seen that quite a lot. I mean, intentionally, no decision makers being there or available to you. This is not just at the mediation table, but in the dynamics of the international relationship, you can actually find that it's very hard to actually find out who is going to make the decision, who is going to take the responsibility. Particularly when you have state-owned organisations, and then, I think again, it just rolls out at another level, the whole issue where you have miscommunication, or bad communication, you just build up the levels of distrust and it just gets worse when you've got language differences, distance in time, place, and so I just think all those things can be multiplied.
Neglect of a skill set. For me, anyway, in my work both as a lawyer and a mediator, I do think that we could spend a lot more attention on the project management of how – particularly long term projects – are managed. And I think some of the things that we were talking about this morning, about getting alongside, forgetting about the third party neutrality, but getting alongside in some of these projects to actually get a better outcome with Bernie Mayer, was interesting to explore.
And then just plain, don't want to deal. And I think again, with one of my colleagues I used to work with in California, we used to talk about embracing the 'no'. I mean, sometimes, there is actually quite a lot of power in the 'no'. So not to be frightened of the 'no', and know that it's a matter of patience and persistence. But sometimes 'no' may be right, actually, and not being frightened by that.
Now this I took from a book when I was at Harvard, when I was about one month of having my child, and I was staying with wonderful people who were teaching at the Harvard Business School, and they gave me a wonderful book on negotiation, and I found this chapter. And this man here, Janos, is actually a Hungarian diplomat, so he never actually dealt in the world of commercial mediation, but when I read his list of what he had learnt from all of his years in the world of international diplomacy, I thought it was really very heartening, and 'Enjoy and cherish negotiation', I think that's really rather important, really. And having courage. I think, if you have courage and intelligence, that will actually come through and it will actually help you in terms of very difficult situations.
Having an eagle eye. Yeah, pay attention to the detail. I mean pay attention not just to the words but to what is going on around you. Being optimistic may seem somewhat a repeat of number one. I think honesty and integrity, at the end of the day it may be difficult, you may not feel that you're being dealt with in that way, but I think in the end that that is very important, and therefore feeds into the issue of professionalism. Putting yourself, we know, the putting yourself in their shoes, again, it may be very, very difficult, but I think it is certainly worth doing.
Making your opposition your partner. I saw a very good example of this recently when I was reading some materials when the Americans, when they were negotiating with the Russians over the SORT 2 Treaty, in fact a very young American senator, he was sent to Moscow and he wasn't particularly well armed to deal with this Russian negotiator, and what he did, actually, to deal with the no there, was he said, help me, you know, you have a lot of experience. You know, tell me what it is I should say to Senator Goldwater when I get back to Washington. And amazingly, [Russian name?] did exactly that. He sat down and told Senator Boyden exactly what he should say and how he should deal with it, and out of that came actually a completely different result.
And then, you know, absolutely try and understand what your partners aims are, and definitely never, ever, particularly I think in international situations, particularly third world countries, it's appalling, but you may just think, well they're not as smart and sophisticated. That is a terrible mistake to make. So please don't. We should never make those mistakes and I'm sure you wouldn't. So I just thought that was encouraging, but it doesn't come from our field, it comes from a field which is different, and I just like that list.
Let me now pass onto Karl.
Karl Mackie:
When you turn to what the good mediator does, which you'll be familiar with, of course many of the same qualities emerge as on Janos' list. We're often asked, is international mediation qualitatively different? And it can feel qualitatively different, but I think the true answer is in the commercial mediation world, many mediations are very similar to domestic commercial mediations. But the differences in the degree of stretch that you have in terms of your capabilities and skills, so in terms of being a good and attentive listener, for example, it's much harder when you're not so used to the cultural cues, that much harder when you're not so used to the language, much harder when you're not actually hearing what the person has to say because they're talking through an interpreter. Similarly, emotional and psychological awareness. We know even in this culture, knowing emotionally what a Yorkshire man may be thinking may be different from what a Glaswegian may be thinking in the same context. And you need a degree of cultural awareness to read that. Far more so if you're talking about Sri Lanka or somewhere else. And the same is true, most of the qualities that apply to good mediators, they are just stretched in a cross-cultural context.
We often talk about mediation adding, and I think this relates back to Bernie Mayer's point about mediation as a bridge. You can either use it to offset some of the things that begin to go wrong on projects, of negotiators not quite matching in terms of their expectations. One being more focused on the wording of the contract, one being more focused on the relationship. A typical situation in Asia. Different barometers for measuring effective performance, the politics of communication. All of those things can start the negotiations going adrift, and sophisticated companies should be able to bring in mediators early on to begin to offset that and create a bridge through mediation.
Equally, and perhaps more often of course, we find ourselves at the dispute end of the spectrum, where the parties are already clashing, there's already been a breakdown of expectations, there's a breakdown in communications, the lawyers are called in because of the huge blame factor. And there may be strong political pressures on one side or the other to perform commercially or politically. And mediation, as we all know, can offer other avenues, other ways of complementing some of those problems.
In the international context, I think one of the key ones is the word or the term project management, because generally they are more fragmented, they are more complex. The parties are from more jurisdictions, there are geographical problems about getting together. So a good mediator ought to have an eye on the logistics of how best to manage this negotiation project, this particular difference, both for the day of mediation, or days of mediation, but even more so for what happens if this doesn't work, how do we do follow up with this kind of situation. Most of the others you would find for virtually all normal commercial mediation.
This is a slide I like to play with arbitrators, just to provoke them and upset them about the differences. [Laughter] But we'll try to be balanced, and actually, there's a number missing. Probably the cost of mediation if one was being more realistic about commercial parties and law firms, we'd probably be 125,000 rather than 25,000. But even if you put in 125,000 there, what we're trying to show is the offset of savings, and there is often for advisers a real issue about the balance, getting the balance right between, you might actually get more from the process of adjudication and arbitration than you would from a mediation, where there's more pressure to get an earlier settlement, but also a compromise settlement. But then you have a trade off between what's more important. Is it waiting through to the end point as the arbitration, or is it getting some money in much more quickly and getting a more modest settlement? I think, by the way, when we did this, we based this on a real arbitration case, and then we sat down with the partner involved with the papers and talked through what could have happened if it got to mediation, when it would have got to mediation, what the likely cost would have been. They actually had gone to arbitration, and I think it was a 12 million claim for which they got a 4 million award after 26 months. So there are serious issues for choice and timing. We don't want to minimise the expertness of the issue about when arbitration, when mediation, because that's, I think, a typical distinction between the benefits for the two processes.