It was a warm, sunny day in Los Angeles yesterday, so I decided to go for a stroll. A car passed me with a license plate that read, “PRODUCE.” In Los Angeles, the probability that the person inside that car is a film, television, or music producer is about 99.9%. But if I was taking the same walk in my rural hometown of East Liverpool, Ohio, the person driving that car would most likely be the owner of the local grocery store. And if I were in a major city that housed an insurance company headquarters, the car’s owner might be an insurance agent. The meaning of the “PRODUCE” plate will be wildly different, depending upon where you live and the context in which the owner works.

This is relevant to mediation for one very important reason: context matters! Parties need to understand each other in order to effectively communicate positions and interests. If each party says the same words, but those words have vastly different meanings, communication becomes difficult, if not impossible. Context informs a person’s perceptions, opinions, and needs. Within this framework, context can drastically change the meaning of a word.

For example, one party accuses the other party of not being “reasonable.” Reasonable is one of those words that can have vastly different meanings. The mediator must gather as much information as possible to determine the meaning of “reasonable” to each party. It’s then the mediator’s job to try to educate each party as to the other’s definition. The goal is for each party to understand the other’s definition of reasonable, even if they don’t ultimately agree on the definition.

In a personal injury case, “reasonable” to one party may be a full reimbursement for out of pocket expenses, pain and suffering, medical costs, attorney’s fees, future medical, lost earnings, future earnings, and property damage. This version of “reasonable” stems from plaintiff’s perception that defendant caused the accident and there would be no damages but for the accident. On the other hand, the defendant may feel that “reasonable” is limited to property damage and a small portion of medical bills. Delving into defendant’s reasoning may reveal that there are comparative liability issues, that the plaintiff is a poor witness, that the plaintiff has a prior medical condition, or that plaintiff’s medical treatment was not “reasonable” based on the fees charged or the amount of therapy given.

So where does this leave the parties? We go back to the element of context. In the context of mediation, the parties must decide what is reasonable based on the information at hand, their risk adversity and need for closure. But this still might not be enough to move toward settlement. In the context of a trial, which may be the next step after a failed mediation, who decides what is reasonable? It’s not the parties, their attorneys or their experts. The ultimate answer is that the jury must determine what is reasonable. With this in mind, no party should leave a mediation without realistically quantifying their probability of success in front of the jury. Mediators should not be afraid to ask the parties to honestly assess their arguments in front of a jury of “reasonable” people. This honest assessment should help parties adjust their offers and demands accordingly.

For example, I recently held a personal injury mediation with admitted liability. The defendant refused to pay full medical reimbursement because there was a two-month gap in plaintiff’s treatment.  Defendant had a good argument on paper that this position was “reasonable” and made the assumption that plaintiff was lying about her injuries based on the facts at hand. Defendant strongly felt that the jury would buy his argument regarding “reasonable” and negotiated accordingly. However, when plaintiff revealed she had moved back East for those two months to take care of her dying mother, the context of defendant’s argument changed. Which story would the jury buy as being more “reasonable?” Defendant knew that the jury would be sympathetic to the plaintiff under the circumstances and made an honest assessment of his likelihood of success. Knowing his arguments would sound cold and callous to a “reasonable” jury, he adjusted his position and the case ended up settling for full medicals.

Defining context is a key element to settlement. The goal is to develop definitions based both on personal context (how the parties define “reasonable”) and public context (how the jury might define “reasonable”). An understanding of both should help each party find positions more likely to lead to settlement. Doesn’t that sound reasonable?

by Terri Lubaroff

Terri Lubaroff, Esq. is a conflict resolution specialist, having honed her skills first as a film and television producer and later as a full-time mediator and arbitrator. She specializes in Entertainment, New Media, Employment, Consumer Torts and Business Disputes, and is adept at dealing with difficult personalities. She is a member of the Florida Bar and is a full-time neutral in Southern California with Agency for Dispute Resolution.