One of the issues that mediators learn about is power imbalance: one party may have more power during a negotiation than the other party. This may be due to any number of reasons. One side may have more money to fight the good fight, may have more information, expertise or knowledge about the matter at issue. Or, perhaps, the law is clearly on one party’s side and/or clearly against the other party. Similarly, one party may have a strong moral conviction based on “principle” that she is right, and the other side is wrong. Or, perhaps, one party is a better debater, a better advocate for her cause than her adversary. As we all know, there are some folks who are hesitant to speak up or stand up for themselves. Thus, they may be very accommodating to the other side contrary to what they are really thinking and want. Then there are those that make themselves such a nuisance, that the other side agrees to what the nuisance wants just to get ride of them and “to be done” with the matter and the nuisance.
The Covid-19 pandemic has made me realize that there is also another source of power imbalance: the pandemic itself or outside forces of life over which we have no control.
This was brought home to me in an Americans With Disabilities Act mediation that I conducted the other day. The plaintiff went into a store owned by a sole proprietor and found that there was no lowered counter so that one in a wheelchair would not have reach up to complete the transaction. The lowered counter would allow such a plaintiff to simply reach across the counter. (The defendants did remedy this subsequent to the lawsuit.)
Before the pandemic, such cases would usually settle for statutory damages plus attorney fees, typically in the range of $10,000-$20,000. And typically, the power balance would be with the plaintiff since it is the plaintiff who has control of the lawsuit and is the one who decides whether to settle or forge ahead to trial.
Surprisingly, the plaintiff appeared to view this case as she would in pre-shelter in place days. Her demand was for statutory damages and attorneys’ fees in the range stated above.
The defendants- the sole proprietor of the store and the landlord of the commercial property wanted to settle but the “safer at home” orders had turned their lives upside down. The store owner advised that because she had to close her business since she was “non-essential”, she was forced to go out of business altogether. Thus, she had a minimal amount of available funds with no readily identifiable source of income. The landlord advised that not only had that tenant and the other tenant not paid the rent, the landlord had not paid the mortgage and was likely facing foreclosure in the coming months.
Despite this, the defendants did offer a minimal sum to settle and authorized me to explain the vast amount of future uncertainty that the defendants were facing. They were acting in good faith in the worst of circumstances.
The Plaintiff did not care. Evidently, she thought she held the balance of power. I tried to point out that assuming plaintiff won at trial, she would very likely be filing a motion for fees against two insolvent defendants and thus never collect a penny. The response evidenced a refusal to accept that we have entered a “new normal” and that the balance of power in this negotiation had clearly shifted to the defendants who were facing much dire consequences than losing a lawsuit and an adverse judgment for attorney’s fees. I thought to myself that if I were the defendants and had to choose between using the money to buy food and pay plaintiff some attorneys fees, it is an easy choice.
But plaintiff did not realize this massive shift in balance of power due to the pandemic. She did not heed the adage that “a bird in hand is worth two in the bush”.
Given the predictions of the “experts” that it will be quite a while if not years before the economy (and life as we knew it) gets back to “normal”, I seriously doubt that plaintiff will ever have her settlement demands met. But who knows?
I do know that the pandemic has caused a massive balance of power shift in negotiations of which we must take notice.
…. Just something to think about.
Stay Healthy and Safe!
And for those of you who wish to mediate, I am conducting mediations by telephone and video conference.
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