Posted on April 10, 2008 by Victoria Pynchon

Live Blogging from Straus Conference Negotiating, Mediating and Managing Conflict: Evolution in a Global Society

9:00 a.m. sesstion:  Culture, Tradition and Language in Cross-Border Negotiations and International Conflict presented by Professor John Barkai, University of Hawaii; Andrew Aglionby, Baker & McKenzie; and, Michael Zacharia, Former Exec. VP of Bus. Development General Counsel, DFS group., Ltd., Hong Kong.

Here in Los Angeles, mediators deal with cross-cultural negotiation issues every day of the week.  Today, the Straus Institute in Malibu is hosting a conference to equip us to deal with the issues that arise in those negotiations.

ASIAN CULTURES

  • relationship essential
    • business cards:  give with both hands; take with both hands; read or you will be considered disrespectful -- you are not interested in who this person is
  • comfortable with uncertainty
  • principal to principal negotiations:  negotiators need to be of equal status
  • high context culture, i.e., the context is as important or more important than what is said
  • lack of transparency
  • 50 ways to say "no"  -- ambivalent answers
    • perhaps
    • I'm not sure
    • I'll think about it
    • We'll see
    • there are many difficulties
  • 36 Chinese Negotiation Strategies, i.e.,
    • Deceive the sky to cross the ocean.
      • Moving about in the darkness and shadows, occupying isolated places, or hiding behind screens will only attract suspicious attention. 
    • Create something from nothing.
      • You use the same feint twice. Having reacted to the first and often the second feint as well, the enemy will be hesitant to react to a third feint. Therefore the third feint is the actual attack catching your enemy with his guard down. 
    • Startle the snake by hitting the grass around it.
      • When preparing for battle, do not alert your enemy to your intentions or give away your strategy prematurely. 
    • Remove the firewood under the cooking pot.
      • When faced with an enemy too powerful to engage directly you must first weaken him by undermining his foundation and attacking his source of power. 
    • Replace the beams with rotten timbers.
      • Disrupt the enemy's formations, interfere with their methods of operations, change the rules in which they are used to following, go contrary to their standard training. 
    • The honey trap.
      • Send your enemy beautiful women to cause discord within his camp. This strategy can work on three levels. First, the ruler becomes so enamoured with the beauty that he neglects his duties and allows his vigilance to wane.
  • constantly question your assumptions:  am I really understanding what this person is saying or their body language is communicating
  • exercise patience, persistence and humility
  • show respect
  • Americans have different cultural backgrounds even when they "look" American because  cultural background is not always apparent from physical appearance, accent, gesture and the like
  • suing Asians
    • very difficult thereafter to settle
    • very public -- impacts "face"
    • NEGOTIATE FIRST
  • people will always find ways of working together 

IN CULTURES WHERE COURTS ARE CORRUPT (AND THE SPEAKER IS NOT SPEAKING TO ANY PARTICULAR CULTURE, BUT THERE ARE MANY WHERE COURTS ARE CORRUPT) YOU DON'T RELY UPON CONTRACTS, YOU RELY UPON RELATIONSHIPS 

11:15 Session:  The Global Evolution of Business Mediation with John Hinchey of King & Spaulding; Paul Grossman of Paul Hastings; Jay Welsh, General Counsel, JAMS; Madame Wang Hongson, Secretary General, Beijing Arbitration Comission; and, Professor Hal Abramson of Touro School of Law (Long Island).

Paul Grossman on What Objectives are And What He Wants from Mediators

  • early evaluation of objective
  • who should the mediator be?
    • subperb mediator will settle almost everything
    • arbitration:  retired judges:  preferences
    • mediations:  prefers professional non-judge mediators
      • judges judge
      • are used to being obeyed
      • professional mediators are good at persuading
    • he prefers to use mediation organizations to convene the mediation after telling the mediation organization who he wants to use
    • best way to get the mediator you want is to call the mediator's organizations
  • prefers confidential and extensive legal briefs
    • facts and law
    • but also pressure points on the other party
  • he brings settlement agreement, lap top and printer
  • believes in using a mediation book
    • contains deposition excerpts, cases, exhibits
    • everything he'll use in his opening statement
    • gives it to everyone in the joint session
    • aids the mediator in persuading the other side (or reducing party expectations)
  • believes in joint sessions where both parties get to address the mediator
    • like mediators who will "speed talk" the presentation back
    • likes mediators who take notes
    • builds confidence that the mediator "got it."
  • tone:  mediation statement is to the mediator but truly it's a presentation to the party on the other side
  • mediators he uses use psychological techniques to persuade the other side
    • I'm dealing with an impressive opponent
    • I need your help
    • build confidence
  • He like mediators who charge flat fee for a really long day
    • he pays an enormous fee for a long day
    • so that the parties will see it through without worrying about hourly rates
    • once the other side is invested in the process, they tend to settle
  • How does mediator get party to settle
    • persuading the other side
    • interim mediator's proposal or bracketing
      • he thinks the mediator should say if the parties aren't willing to negotiate in that bracket, the mediation is over
      • requires great skill of the mediator -- guts 
  • most of his mediations settle with a mediator's proposal
    • a good mediator develops an unerring sense of where he can get two "yeses."
  • if settlement is truly impossible, good mediators go for partial settlements
  • sometimes agree on a binding med-arb with a retired judge
    • baseball arbitration and mediators' proposals (described here)
    • work within bracket

John Hinchey of King and Spaulding

  • was present at the famous Pound Conference on Judicial Reform where the idea of the multi-door courthouse was hatched
  • he's involved in construction litigation and construction contracts are "dispute generating machines"
  • PREVENTIVE DISPUTES RESOLUTION IN RELATIONSHIP CONTRACT
    • contract carefully, anticipating what might go wrong -- the contract itself is an "early dispute resolution mechanism"
    • partnering:  hot-tubbing:  align objectives
    • allocating risk in a thoughtful, fair and appropriate way -- don't load all of the risk on any one party
  • RESOLUTION OF DISPUTES DURING TERM OF THE CONTRACT
    • the contract requires the parties to negotiate before they mediate, arbitrate or litigate
    • designate who will negotiate -- project manager or executives for instance
    • mediation or conciliation:  required by contract 
    • some people see mediation as water-carrying & others say conciliation involves an more active role of the mediator -- reality-testing
    • AAA says mediator works to bring the parties together
      • help the parties engage and communicate so they understand real interests and real positions of the other side
      • when parties are invested in a dispute, business people need help
      • mediator is a reality-tester
      • once you start representing a client, you look for everything to strengthen client's position
      • thought important to understand the other side -- often need help to take the other side's arguments seriously
  • DISPOSITIVE:  SOMEONE HAS TO DECIDE DISPUTES

JAY WELSH OF JAMS:  HISTORY

  • in 1990s, venture capital company invested in JAMS wanting it to be the next FED EX
  • led to growth of JAMS
  • Straus, together with JAMS, taught claims adjusters about the potential for mediation
  • JAMS did the convening
    • the defense was instrumental in starting the business
    • JAMS would convene -- call Plaintiff's attorneys at the end of the month when they needed to pay their bills to suggest mediation
  • the mediation of cases is static but training is growing worldwide
    • EU promoting a universal dispute resolution method that won't have cross-border jurisdiction fights
    • many EU companies are vying for this training business
  • NOW 22 offices -- new office in New York City to do international dispute resolution
  • industry has to grow faster and larger than it has:  10% per year
  • got here because courts clogged & people dissatisfied
    • true in other parts of the world
  • built cadre of trained mediators
    • when began, used Judges
    • lawyers came in in mid-90's
    • the Judges in Europe aren't held in the same esteem in Europe as they were in the States
  • mediation had to be sold and marketed
    • that will have to be done in Europe and the Far East
    • awareness training
    • taught in the law schools
    • in 1990, maybe 4 lawschools in the country with ADR courses
    • now nearly every American law school has mediation courses
    • managing partners in worldwide law firms has dramatically changed
    • nearly all managing partners had ADR courses available to them

Madame Wang Hongson of Beijing Arbitration Commission

    • interest-based mediation of any type of dispute brought to them
    • values
      • party autonomy:  mediators chosen from inside or outside the BAC panel
        • facilitate settlement
      •   more freedom in payment options and less costly than arbitration
      • confidentiality
      • voluntary:  parties may terminate process at any time
    • independent procdure: no relationship to arbitration
    • the parties may make mediation agreement an arbitration award if they wish
    • the BAC conducts a training program

KEYNOTE SPEAKER:  MARY WALKER, GENERAL COUNSEL, U.S. AIR FORCE on Effective Conflict Management and the Commitment to an Ethical Culture. (see also here)

  • 60,000 contracts in 2007 between air force and its contractors
  • contracts include an ADR pledge
  • new way of approaching business partners and employees
    • shared values
    • fostering relationships
  • suspension and debarment for contractor wrongful conduct
  • she asked the various divisions that worked under her supervision to collaborate
  • connection between dispute resolution and ethical culture
    • Sarbanes Oxley Act
      • hasn't addressed root causes of malfeasance
      • doesn't provide sufficient guidelines to corporate world
    • Reliance on legal framework insufficient to change an unethical culture
    • foster genuine ethical conduct
      • necessary to trust
      • trust necessary to collaboration
    • market value of trust
  • air force pioneered conflict management system
  • conflict management system should empower employees to resolve dispute at the lowest level
  • "ethics"
    • service before self
    • excellence
  • values-based training helps air force to negotiate in gray areas and make ethical decisions where there are no rules
  • dispute resolution initiatives
    • commitment to dispute resolution in all contracts -- buy in or opt out
    • pursuing written commitments to
    • cross-cultural training
    • inter-space negotiations
    • expedited review of employment discrimination complaints
      • goes to root causes
    • embrace and teach negotiation skills at every level of air force
      • inter-space models
      • 2005:  Air Force Negotiation Center for Excellence
        • not a lawyers program
        • not at JAG school
        • not just a problem for lawyers
        • training for acquisition work force
        • special focus on cross-cultural negotiations
          • any communication where parties don't have common frame of reference or common cultural understanding
          • this includes other American cultures
      • new civil service system for defense department
        • employees must negotiate performance objectives and salaries
        • provided interpersonal skills training
        • equip managers, supervisors and employees to manage change
        • 30,000 air force supervisors trained in interspace negotiation and communication skills
    • employment discrimination complaints
      • mediation:  2006:  EEO complaints resolved in 59 days with voluntary dispute resolution compared to 2 years
      • resolved 73% of the cases
      • stepped beyond allegations of the complaint to the root cause (which is often not discrimination but something else that is disturbing to the relationship)
      • improves morale
      • resolution can affect entire work group
    • dispute resolution for contractors
      • contracting officers should offer dispute resolution in every contract dispute with limited exceptions
    • contractors accused of misconduct or sub-standard performance
    • want to know that the contractor has a commitment to an ethical culture
      • need to trust contractor to tell the truth when asked
      • examples later
  • "war" story
    • pursue disputes central to individual's core beliefs
    • policies regarding religious expression
      • free exercise vs. non-establishment
      • forced to resolve in light of day (publicity)
  • arose at AF Academy
    • senior leadership examined scope of dispute
    • executive staff served as mediators
    • town hall meetings
    • members of congress
    • small focus groups
    • attorneys involved to interpret the constitution but lawyers were not at heart of this process
    • one page policy on religious expression
    • rooted in cultural ethic -- respect for the dignity of each person
    • sought wide range of views:  religious and legal scholars; public; officials; individuals

(above:  Kathleen Bryan, CPR President and CEO)

EARLY AND EFFECTIVE CONFLICT MANAGEMENT FOR ORGANIZATIONS with Phillip Armstrong, litigation attorney for Georgia Pacific; Kathleen Bryan, President and CEO, International Institute for Conflict Prevention & Resolution; Stephen Gates, Former Senior Vice Pesident and Group General Counsel ConocoPhillips; Deborah Masucci, V.P. AIG and Chargle Morgan, Managing Director of FTI Consulting

  • corporation isn't one mind:  must recognize everyone asks same question -- how will the resolution of this case going to affect my career; my relationship with the CEO or General Counsel or shareholders
  • CPR certified experts in electronic discovery to assist with arbitration or mediation
  • one thing that's pushing counsel is electronic discovery
    • see federal rules
    • have to get together with other party to discuss information about electronic systems and how to get at them and exchange that information with one another
  • what about discovery's effect on early mediation?  Kathleen Bryan addresses "how much information is enough?"
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