Innovative Conflict Resolution

From Settle It Now: How Attorneys Value Your Claim …

In my experience, there are two general categories of church boards:  The first type is essentially democratic; board members are nominated and voted on by the congregation, and they serve for a specified term.  The second is where the members are hand-picked, either by the Pastor or through a process involving the existing board.  I have had had the privilege of serving on both types of boards. While they differ, they are similar in one very important aspect: They both involve conflict between the members. (There is one type of board where there is no apparent conflict, and I’ll deal with that later.)

A new way of looking at conflict

My definition of conflict might be a bit different from yours. I recently read an article by a mediator who went to great lengths to explain how ordinary differences of opinion are not conflicts.  I think he couldn’t be more wrong. The point he was making is that only real conflicts require a mediator; however, anyone who has served on a church board for any length of time can testify that these seemingly small differences of opinion can be quite costly in terms of both time and relationships. I can’t count the number of times that a board meeting has been “hijacked” by a small difference of opinion, sending the meeting into overtime. Of course, the author was correct in that not all disputes require a mediator – especially if boards and committees are trained in how to approach such differences of opinion and use them to become more productive, not less.

By my definition, conflict is merely what happens when two different points of view meet.  At its most benign, conflict is what we know as communication.  When we communicate, we encode both factual and emotional information into words, facial expressions and body language hoping that others will be able to decode the information appropriately.  Communication could be described as the process of overcoming any differences that exist between people.

Depending on these differences and the complexity of the information being conveyed, this process could be rather effortless (almost seeming like mind-reading), or it might prove to be quite difficult.  Factors impacting the success of communication include culture, age, sex, education, interests, personal tastes and the thousands of experiences each of us has had.  All of these impact how we interpret information, and explains why people can draw very different conclusions from the same information.

A Matter of Scale

Any time we try to communicate a thought to someone who doesn’t share a necessary frame of reference, we have conflict.  There is a barrier – perhaps quite small – that we must overcome.  The more complex the issue being discussed, and the more diverse the participants are from one another, the more conflict we will experience.

The difference between a friendly conversation about the weather and a heated argument over church policy is for the most part an issue of scale.  The problem is the same – differences in perspective – but the barrier(s) change.

However,  the inherent qualities of some relationships can also impact the type of conflict that will be experienced.  An issue which might ordinarily be an interesting intellectual exercise for two recent acquaintances might turn into something quite emotional in the context of a marriage.  Likewise, discussions between members of a church board can become quite emotional because they can involve issues of theology, Biblical interpretation, and personal conviction, all things about which people tend to feel quite strongly.  Conflict, it seems, is in the mind of the beholder.

The Importance of Conflict

There are many Christians who, in trying to follow Christ’s admonitions to turn the other cheek and forgive our enemies, have come to believe that any sort of disagreement and conflict among Christians is wrong.  However, there are New Testament examples of conflict indicating that not all conflict is wrong.  In 1 Corinthians 11:18-19, Paul writes

For, in the first place, when you assemble as a church, I hear that there are divisions among you; and I partly believe it,  for there must be factions among you in order that those who are genuine among you may be recognized.

Some translations imply that Paul was being sarcastic here, and he might have been; however, Paul himself was no stranger to conflict.  Acts 15:36-40 tells the story of Paul’s “sharp disagreement” with Barnabas over John Mark; they apparently didn’t employ the services of a mediator, and the matter was resolved by Paul and Barnabas splitting up. In Galatians 2:11-14, Paul tells of another conflict, this time with Peter:

When Peter came to Antioch, I opposed him to his face, because he was clearly in the wrong. …

And, according to Paul, there’s even a place for anger in the church:

Therefore each of you must put off falsehood and speak truthfully to his neighbor, for we are all members of one body. “In your anger do not sin”: Do not let the sun go down while you are still angry, and do not give the devil a foothold. Eph. 4:25-27

There are a couple of things we can learn from these passages. First, it is clear that even Apostles can have differences of opinion; and if they can, so can church leaders and board members.  Second, an open, frank discussion of the issues is beneficial – and even essential. If differences of opinion are not discussed, there are consequences:

1. The truth will not be revealed
2. Error will be allowed to continue
3. Anger, bitterness and resentment can take root

Furthermore, Church history shows us the benefits of a healthy approach to conflict (as well as many wrong approaches to conflict).  The Nicene Creed is a great example: if it were not for the dispute argued by Arius and Athanasius in 325AD, we might not have such a concise expression of the Christian faith.

The Conflict Conversation

The process of working through differences of opinion in a church board setting is not difficult from a technical viewpoint; it is really just a conversation.  Once again, the main difference is in scale.  For example, you might meet someone from a different culture at one of your church functions. Knowing that they will have very different frames of reference than you do, you go out of your way to understand them, and help them to understand you.  You try to use context clues to define words they use, and you ask questions to clarify what they are saying. You also choose your words wisely, and make sure that they are understanding what you are saying.

This is essentially what we need to do in conflict situations.  The key word is understanding.  People hold opinions for reasons; the stronger the opinion, the more important it is that we make an effort to understand why they hold that opinion.  We may find that the real issue is something else entirely.   It has been said that an obstacle can either be a stumbling block or a stepping stone; we should learn to approach conflict as a learning and growing opportunity, a chance to progress rather than as an obstacle to progress.

Reality and Church Boards

The reality of church boards is that they are usually comprised of ordinary people, most of whom have no training in managing conflict. They may be skilled in various aspects of business, and they may be managers and CEOs – but that doesn’t mean they are skilled at dealing with conflict.  The reality is that even in the business world, including experienced managers, have very little if any understanding of how to deal with conflict.

The good news is that it’s not difficult to learn how to work with conflict. With a little understanding of some basic elements and how different people respond to conflict, and some work in building a collective approach to working with conflict, a team can learn to use differences of opinion – conflict – to build each other up and strengthen relationships, not to mention saving time and making better decisions.

Next: Some free tips about conflict management, and the dangers of no conflict.

I often write about the benefits of conflict, and how avoiding or resolving conflict may not be as important as benefiting from it.  In looking at conflict, we find that it is not just an unfortunate situation we need to make the best of, but rather, it is essential.  As well-known mediator Ron Kraybill has said, “no meaningful change takes place in the absence of conflict.”

Regardless of your opinions on President Obama and his policies, today in meeting with Republican leaders he made a statement which echoes what I’ve been saying:

Having differences of opinion, having a real debate about matters of domestic policy and national security, that’s not something that’s not only good for our country, [it’s] absolutely essential. It’s only by the process of disagreement and debate that bad ideas get tossed out and good ideas get refined and made better, and that kind of vigorous back and forth – that imperfect but well-founded process, as messy as it often is – is at the heart of our democracy. (emphasis is mine)

At least on this point, he’s hit the nail on the head.

Continuing from here, this post will provide some helpful tips on how to get the best from an insurance claims mediation.  For a very basic introduction to mediation, you can review What Does Mediation Look Like?

One of the distinguishing characteristics of an Insurance Claim mediation is that it is a classic David vs. Goliath scenario.  More than likely, the insurance company is a large possibly Fortune 500 company and you are not. And, there is the simple truth that the insurance company holds the money that you want.  One of the wonderful benefits of a mediation is that it has an equalizing factor; the mediator has promised to treat the parties as equals (to the best of his ability).

In a mediation, you have a couple of other things in your favor as well.  For one thing, in most situations the fact that you have come this far implies that your claim is – at least to some extent – valid.   Another factor in your favor is that the fact that an insurance company is participating in a mediation usually means that they are willing to pay you money; going to a mediation with no intention of compromising is not negotiating in good faith.

Which brings me to Tip #1:

Tip #1: Be prepared to compromise.  Mediations are not a forum for proving you are right.  Mediation is, under any model, a forum for compromising. Even in a problem-solving approach to mediation, the parties must be prepared to give something in order to resolve the claim. (This does not mean that the parties must settle, only that they should be willing to compromise something beyond where they are.)

If you are determined to fight for what you believe you are owed, don’t waste time mediating, just file a lawsuit and fight your way through the system (or as an alternative, request arbitration).   However, litigation is an often dark and treacherous road, fraught with risk; don’t start down that road without first counting the cost.  However, if you believe that settlement is what is best (within reason, of course), then decide prior to the mediation to have an open mind and be prepared to compromise – perhaps significantly.  (Don’t worry, the insurance company is making that assessment, too.)

Tip #2:  Know your bottom line. Make an accurate (to the best of your ability) assessment of your claim and your position, and have a fixed point in your mind (or better yet, write it down) where – given that no new information changes your evaluation – you know you will stop negotiating.  This is often called having a “drop dead” number.  The Claims Person will more than likely have one as well – and may need to go to a manager to go past that number.  As I’ll mention below, if you know what the best alternative to settlement (such as filing a lawsuit) is, you’ll have an easier time knowing what your true “bottom line” is.

Tip #3: Ask the mediator to verify that the adjuster has “full settlement authority.” The adjuster will typically represent that they do indeed have complete authority to resolve the claim (usually up to the policy limits).  However, much of the time they only have the authority which their manager feels is appropriate to resolve the claim.  If the adjuster will need to call someone else to make any decisions, you have the right to know that (and the mediator will want to know, too).

Tip #4: Trust the mediator. Give the mediator a chance; that is what you are paying him for. You may not understand what he is doing, but he more than likely has a plan that is designed to facilitate a resolution. If it appears as though the mediation is at a standstill, tell your concerns to the mediator, who may need to try a different approach. In some ways, a mediator is like your physician; if you’re not being honest with him, he can only do so much.

Tip #5: Don’t put complete trust in the mediator. Yes, I know what I just said.  But, mediators are only human.  You know your claim better than anyone else, and you should always trust your own instincts. At the end of the day, the decision to settle or not settle is always yours.

Tip #6: Many mediators will hate this tip, but here it goes – Don’t reveal your “bottom line” to the mediator too early. Some mediators will instantly go to the bottom line numbers, and push you to go further than you intended.  However, if the mediation has reached a plateau, it may be time to reveal your “drop dead” number. Chances are, the mediator will also sense when it’s “fish or cut bait” time, and ask you for it.

Tip #7: Don’t take it personally if the mediator challenges your position. While you may at times feel like the mediator is taking the insurance company’s side in his conversations with you, the chances are that he is taking your side when he talks to the insurance company.  Playing “Devil’s advocate” with each side, while it can be somewhat frustrating and even disheartening, does help to “test” each side’s position.

Tip #8: Listen. Talk and make sure the mediator understands your position, but don’t forget to listen. Make sure you hear and understand the position of the insurance company.  You may hear something that changes your position, or it may reinforce your position. Even if the claim doesn’t settle that day, you may gain some important information.

Tip #9: Be Flexible. Sometimes the mediator will try a rather unorthodox-sounding approach to settlement; here is where you need to trust the mediator a bit.  For example, one of the more unusual, but effective, mediator “tricks” is the double-blind offer, sometimes called the “mediator’s pick.”  When the parties are too far apart and settlement seems hopeless, sometimes the mediator will pick a number that he thinks the claim should settle for.  This number will be a stretch for both parties, and they will have a day or so to think about it.  If both say “yes,” then the claim is settled. However, if one person says “no,” it doesn’t.  It is surprising how often this will work.

Tip #10: Always keep the alternatives to settlement in mind. What is the alternative to settlement?  Realistically, it is that you give up your claim, or you file a lawsuit and proceed to trial. However, also realize that very few cases actually go to trial. The process is often stressful and expensive, and you will probably end back up in another mediation down the road.  As I’ve said before, litigation may be the best option for you; just be aware of the risks and your options.  Again knowing your best alternative to settlement will be of great help in making settlement decisions.

Tip #11: Don’t be pressured. If you need time to consider an offer, don’t feel pressured to accept it then and there.  Chances are the insurance company will give you at least 24 hours to think about it.  The mediator can be of assistance here, and will probably agree to continue in his or her role as mediator.  If the mediation is making progress but you’re running out of time, chances are you can schedule a continuation of the mediation.

Tip #12: Don’t stress if it doesn’t settle. Claims don’t settle for a number of reasons; sometimes the differences are irreconcilable and you really need an arbitrator or jury to make the decision.  Other times, one or both parties may realize they need additional information.  In the latter case, make sure you leave with a plan for going forward, including scheduling a follow up mediation if that is in order.

If I had to pick the most important tips from the above list, I’d have to say numbers 1 and 2 are probably key in any negotiation, as are 8 and 9.

If you are having difficulty settling your claim, whether it is due to a communication issue, or a difference of opinion, a mediation is a wise investment. Certainly it costs some money – the cost is typically split equally between the parties to ensure the mediator stays neutral – but it is far cheaper than litigation.  If you choose to mediate, be prepared to spend at least 3-4 hours, and be patient with the process.

To conclude my series, How to Negotiate an Insurance Claim, these last two posts will concentrate on Mediation as a settlement tool.  Insurance claims can, at times, be difficult to resolve for a number of reasons.  There may be honest differences of opinion on liability or the amount of general damages. There may be more serious issues involved, including coverage, available policy limits, or the insurance company may actually question the extent of your injuries or damages.  Whatever the issue, mediation is a fairly risk-free and low-cost next step.

Mediation is often referred to as “ADR,” or Alternative Dispute Resolution, because it serves as an alternative to simply filing a lawsuit and heading down the long, pricey road of litigation.  If you’re new to the concepts, here’s a brief glossary of terms:

• Litigation: Litigation is the process between filing a lawsuit and the resolution of the lawsuit, whether it be settlement or a trial.  Typically litigation involves a process of formal discovery, which is the exchange of information including providing deposition testimony.  A trial can be in front of a jury, or before a Judge only.
• Arbitration:  Arbitration is an alternative process to formal litigation.  There are some arbitration forums, like the American Arbitration Association, which follow a process similar to the court system. However, an arbitration does not involve a jury.  Arbitrations can either be binding or non-binding, by agreement of the parties, and are held before an arbitrator (or sometimes a panel of arbitrators) chosen by the parties.  Many contracts have clauses which require disputes to be resolved by arbitration rather than through litigation, as they are typically much less expensive.
• Mediation:  A classic definition would be “an intervention between disputing parties.”  However, the process of mediation has evolved over the years so that a more accurate definition (in my opinion) is “A process of guided or facilitated negotiation or collaboration.”  Under either definition, mediations are informal, non-binding meetings between parties of a dispute under the guidance of an impartial mediator, agreed to by the parties.  (More thoughts on what mediation is here.)

The Judicial Mediation Model

Mediation, being an informal process, can take many forms.  I will focus  here on two general models of mediation.  The first is what I will call the Judicial Model, which is quite similar to how a Judge would conduct a Settlement Conference during litigation, and also the most common form of mediation used in resolving insurance claims.  In this model, the parties are kept separate for the most part while the mediator relays demands and offers back and forth in shuttle-diplomacy fashion.  In this model, the mediator plays devil’s advocate with each side, essentially negotiating each side into where the mediator thinks the case should settle.

In the Judicial Model, it is not unusual for the parties to feel like they have lost control of the negotiation, because in a sense they have.  However, in a situation where one or more parties have entrenched themselves, this might be a necessary approach.

Another downside to this model is that it typically creates what is called a zero-sum negotiation, where a gain by one party is a loss to the other.  With an insurance claim, the issue is typically limited to money, and the parties already find themselves some distance apart.  Obviously, for the Claimant to receive more, the Insurance Company must give more.  To resolve such a claim, typically both sides must move from their position into the the space between; in a sense, both parties “lose” a bit.

I’ve heard many mediators tell parties that if they both leave unhappy, it was a fair settlement.  There is a sense in which this is true, but it reveals another flaw in this model: It lends itself to settlements in which the parties perceptions never catch up with the negotiation.  What I mean is this: You may think your claim is worth $50,000 at the least, and the Insurance Company thinks it is worth $30,000 at the most.  A settlement at $40,000 may be the proper amount, but you may leave still believing you should have received $50K, and the Adjuster leaves feeling they overpaid the claim.  Many mediators using the Judicial Model fail to see the value in negotiating perceptions, focusing only on the dollars.

The Facilitative Mediation Model

The Facilitative Model (also known as the Problem-Solving or Transformational Model) is what you typically find in neighborhood, workplace and small-claims mediation programs.  In this model, the mediator sees his job as facilitating a problem-solving conversation between the parties.  While occasionally it is beneficial to separate the parties for individual caucuses with the mediator, this process only works if the parties are in direct communication.  The model is also called the Transformational model because a focus of the conversation is to transform the parties perception of what is a proper resolution.

One of the theories behind this Problem-Solving Model is that by helping each party see the problem (the Shared Goal) from the other party’s point of view.  Theoretically, the more the Adjuster sees things from the Claimant’s point of view, the more apt he or she is to recommend a higher settlement amount, and vice-versa.

However, this model has it’s share of problems, too, as pointed out by John Wade in this article.

A Creative Approach

A good mediator should have more than one trick up his sleeve, so to speak.  Often a blend of these different models is helpful in resolving Insurance claims.  While an insurance claim is essentially a business issue where the Claimant and Adjuster should have no personal issues between them, it is important to realize that negotiating an insurance claim is still a conversation between two human beings.

If you find yourself mediating an insurance claim, watch the mediator for clues as to his strategy and mediation philosophy; it can be of great help in knowing how to respond to various aspects of the mediation process.

NEXT, some tips and tricks of mediating your claim.