Not long ago my wife and I went to a movie at our local theater. Halfway through the movie I stepped out to the popcorn counter. I asked for a bottle of water. The clerk retrieved one, handed it to me and said simply “Five dollars.” I paid her, took the bottle and returned to my seat.
Several weeks ago, I found myself at Costco. There was a large refrigerator case with a glass door. I could see it was stocked with water bottles. The sign on the door said “25 cents.” It was the same product being sold in my local theater – but at one twentieth the price.
Why the difference? It seems clear. The movie theater had a captive audience where there was no competitor selling bottled water. As a result, the theater could charge whatever price the traffic would bear. They had a drinking fountain where water was available at no charge. But if you wanted to sip your water in the movie, you were going to pay five dollars.
But Costco? There was a free fountain there as well – and Costco only charged twenty- five cents for their bottled water. Why was the Costco price a small fraction of the price for the same product at the movie theater? Because Costco wasn’t trying to kill it on their bottled water sales.
As a young person I thought every transaction was only about price. Now, many years later, I know that price is an important consideration, but it’s by no means the only one. Sometimes it’s not even the most important one.
Sometimes people involved in a legal dispute will say “I’m prepared to pay hundreds of thousands of dollars in legal fees rather than pay money to someone based on a claim that’s unjust.” Fine. If you have that kind of money, go ahead. Those kinds of economics would bankrupt some people – but not all. That statement confirms a fundamental truth about negotiations: It’s not always about the money. The only reason money is so important in most negotiations is because we place such a high value on it. If there’s not much value on money and there is instead a high value on other things, then the importance of non-monetary considerations can rival or exceed money in some disputes. In these situations litigation based on these disputes can take a direction that makes little or no economic sense.
One of the first things I have to do as a mediator is to discover, as quickly as possible, the values of each side. When the parties value different things, or value the same things differently, possibilities open up for creative discussions that can result in a resolution. If one side places the highest value on money but the other side values control, respect, acknowledgment or something else, then it’s sometimes possible to blend those different values into a settlement package that works.
Courthouses are filled with people who have suffered wrongs. That’s the very reason we have courthouses – to acknowledge wrongs, either civil or criminal, and address them. Where there is a wrong, there is hurt, frustration, wounded pride, a lack of fairness, a lack of appreciation, a lack of respect. I regularly mediate personal injury cases where money is important, but where a sense of validation, respect and acknowledgment is also important. How do you explain a comment from a plaintiff who says what they really want is to be validated? The amount of money paid in a settlement is often viewed by the plaintiff as an acknowledgement by the defense of the wrong suffered by the plaintiff. I see this consideration in all kinds of disputes: personal injury, construction defect, trust litigation, medical malpractice and real estate lawsuits.
Sometimes a plaintiff doesn’t have in mind a specific amount of money they want in order to acknowledge or validate their injuries (or their wounds). Instead, they are looking for a whole package that not only compensates them for out-of-pocket losses but which also just seems fair and acknowledges the wrong that was done.
This can be frustrating for defendants. For some defendants a plaintiff’s claim seems to be about dollars and cents; expert costs; litigation costs; costs of repair, replacing lost or damaged property and a reasonable amount for pain and suffering. Those things are important but there can also be a very significant validation component to the plaintiff’s position. In truth, this validation component is often never openly expressed by the plaintiff. As a result, a plaintiff’s position can seem puzzling, mystifying, or excessive to the other side, especially when that plaintiff’s position doesn’t match up with the economic dollars and cents that seems to form the basis of their claim.
Mediators are in an excellent position to uncover and identify these “non-monetary” considerations. Counsel who are keyed into this can ask their mediator about the atmosphere, the tone and the motivations in the other room and can then shape settlement discussions to address and meet those non-monetary considerations. When the mediator and the defense are keyed into these non-monetary considerations, positive things can happen in unexpected ways – and they often do.
Robert Jacobs is a neutral with Judicate West. He litigated cases throughout California for more than 30 years. He serves as a mediator and arbitrator in Real Estate, Business, Construction, Personal Injury, Wrongful Death, Medical and Dental Malpractice and Trust Litigation cases.