When navigating the turbulent waters of a dispute, mediation offers a beacon of hope. As an experienced mediator specializing in complex mediations, I understand the intricate issues, high stakes, and emotional intensity (yes, emotions play a part) that accompany these disputes. One of the most powerful tools I employ to guide parties toward resolution is reality testing. This technique is instrumental in helping a party evaluate how likely the other side is to accept a proposal given the alternatives to agreeing to a compromise settlement proposal.
What is Reality Testing?
Reality testing is the process of helping parties critically assess the strengths and weaknesses of their positions, along with the practical implications of their choices. This involves considering the best alternative to a negotiated agreement (BATNA) and the worst alternative to a negotiated agreement (WATNA). By exploring these alternatives, parties can gain a clearer understanding of potential outcomes if a settlement is not reached.
Why Reality Testing Matters
Managing Expectations: Often, parties enter mediation with high hopes and sometimes unrealistic expectations (or worse – no hope and unrealistic demands). Reality testing helps manage these expectations by providing a clearer picture of what is realistically achievable.
Clarifying Risks and Benefits: By examining the settlement alternatives, parties can better understand the risks and benefits of pursuing litigation or other dispute resolution methods versus accepting a proposed settlement.
Encouraging Flexibility: When parties see the limitations and risks of their positions and alternatives, they are more likely to become flexible and open to compromise. This can pave the way for creative solutions that meet the needs of all involved.
Reducing Impasse: Reality testing can break through deadlock situations by highlighting the uncertainties and potential downsides of not reaching an agreement. This can motivate parties to move from entrenched positions toward a middle ground.
How I Conduct Effective Reality Testing
Asking Probing Questions: I use open-ended questions to encourage the parties to think critically about their positions and the possible outcomes. Questions like "What do you think will happen if you don't reach an agreement today?" or "How do you think the other side will react to your offer?" can open up new perspectives.
Evaluating BATNA and WATNA: Together, we identify the parties’ best and worst alternatives to a negotiated agreement. We discuss the likelihood of these alternatives materializing and the impact they would have on their interests.
Analyzing Legal and Practical Outcomes: We will discuss the legal merits of the case and the practical implications of continuing the dispute. This includes potential court decisions, the costs of litigation (and its always more than out-of-pocket expenses), the time involved, and future ramifications.
Presenting Hypotheticals: Hypothetical scenarios help illustrate possible outcomes. For example, "If the judge rules in favor of the other party, what will that mean for you?" or "If you win, how likely is an appeal?"
Providing an Evaluation: Sometimes, you may need to hear an objective opinion from an independent, neutral third-party. I will give my assessment of the ultimate outcome or of some smaller milestone decision if and when the party is ready to hear it.
How You Can Use Reality Testing
It may be helpful for you to share with the mediator the reality testing efforts you have expended with your client before the mediation and how well those have been received. This will equip the mediator to better use reality testing at the mediation. Even if the mediator isn’t using reality testing, that doesn’t mean that you cannot use it in your negotiations. You might be able to help the mediator by providing the tools necessary to effectively use reality testing given the unique facts or case history involved with your dispute.
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