Mediators, by our profession, are flexible and adaptable. The best mediators adjust the style of mediation to meet the needs of the parties and the particular case.

So when the pandemic caused a shutdown of much of the civil court system throughout the country, mediators were quick to adapt to virtual mediation.

Online Dispute Resolution (ODR) has been talked about at local, state, national, and international levels for more than a decade. Many trace the origins of ODR back to the PayPal and eBay dispute resolution programs, which have continued to evolve and take shape in our professional community. However, it took the pandemic to prove that necessity is the mother of invention for the vast majority of mediators.

The Winnebago Conflict Resolution Center

At the Winnebago Conflict Resolution Center (WCRC), we are a court-connected and community mediation center, performing roughly 500 mediations per year (in nonpandemic times). The vast majority of these come as court-ordered referrals from the courts of Winnebago County, but we perform a wide variety of mediation around the state.

The WCRC performed ODR for nearly a decade prior to the pandemic, although to a very select group of participants (less than a dozen cases per year). When the WCRC was forced to innovate due to COVID-19, we quickly adopted our ODR experience to continue offering mediations.

The WCRC has been performing mediations via Zoom for about nine months now. As of this writing, we have held 122 ODR mediations, with an additional three dozen cases referred to the WCRC that declined to take part in mediation.

What lessons can we take from these 150-plus ODR mediation attempts?

Increased Number of Parties Decline to Mediate

Per Winnebago County Local Court Rule 4.03(D), contested small claims cases are to attend mediation orientation prior to moving forward to a hearing with a court commissioner. Procedurally, this takes place after the small claims return date, but before the courts schedule a hearing date.

This mediation orientation is a mandatory court appearance (i.e., failure to appear results in default judgment or dismissal depending upon the non-appearing party), but it is not court-ordered mediation. At the mediation orientation, the parties receive an orientation as to the options and benefits of the mediation process, and are then offered the opportunity to mediate (with mediators who are there and immediately available to assist).

Historically over the past 20 years, these mediation orientation referrals result in the WCRC mediating about 60 to 70 percent of these cases. Approximately 15 percent of parties fail to appear, and the other roughly 15 percent decline to take part in mediation.

In looking at this new ODR dataset, we have seen a slight increase in the number of parties failing to appear, from 15 percent historically, up to about 20 percent. However, the statistic that led me to be interested in writing this article is the change in the decline-to-mediate rate. The traditional 15 percent decline rate has skyrocketed to nearly 30 percent.

We all know that there is a difference between correlation and causation. It would be very difficult to remove all the possible independent variables in this new format to determine causation. The information delivered during the mediation orientation is the same. The person giving the orientation speech is the same (spoiler alert – it is me). The mediators are the same individuals, some of whom have been mediating for the WCRC for 20-plus years.

So, what is different? One that I won’t be discussing in this article is what types of cases are moving forward during a pandemic. This should not be discounted, as a possible contributing factor to the change. However, in considering the anecdotal statements of the parties as they decline to mediate, two trends have emerged that I think are interesting to consider more fully.

Power Dynamic in Virtual Mediation

Mediation, when performed appropriately, naturally neutralizes the negotiation power dynamic. In mediation, each party has the same power – the power to say “no” to an offer and move forward with further litigation.

I am not saying that mediators need to neutralize the litigation power dynamic. This is natural and real. Mediators cannot, and should not, try to neutralize a litigation power difference. In order to do so, the mediator would necessarily begin advocating, something that is expressly contrary to the Model Standards of Conduct for Mediators and Wisconsin Supreme Court Rule 20:2.4.

Even though mediators must not attempt to neutralize the litigation power dynamic, we do see it. Often there is a party who is “right” under the law.

There can also be a third form of power dynamic in a mediation – a personality power dynamic. Often one party is more boisterous, more forceful in speech, significantly larger physically, more congenial, or some other physical or personality difference shows up that is significant. One party having a significantly louder voice and a gruff demeanor does create a power dynamic.

What the WCRC has recognized is that those parties who have less power have been more willing to engage in the ODR process, and those who have more power have been less willing to engage in the ODR process than pre-pandemic.

The WCRC performs our mediations inside the Winnebago County courthouse. This is not ideal for some parties, as the courthouse is often the site of some pretty bad events in people’s lives. So, when the more timid party is asked to come to the courthouse, be placed in a room (if even for just the mediation orientation session) with the more forceful party and offered an opportunity to work on a resolution, this can be very intimidating.

With ODR, the more timid party is located wherever they may be, often a safe space that they feel comfortable. They are not physically present in the same room as the more forceful party. They have some control over what the other party can see (by turning off their camera), what the other party can hear (by self-muting), or what they see and hear (by choosing which screen view to focus on or even reducing the volume when the other party is talking). These more timid parties are more willing to engage in the ODR process than when they were asked to do mediation in person.

It appears that these more timid parties are agreeing to mediate at a higher rate than pre-pandemic (this is a very hard thing to quantify – we do not keep statistics on parties demeanor and “more timid” is a clearly subjective determination).

So, while we see the more timid party agreeing to mediate more readily, the decline-to-mediate rate has nearly doubled – and it is the more forceful parties who are declining to mediate.

More Forceful Parties Have Less ‘Sunk Cost’ Prior to Mediation

When the parties were ordered to attend mediation orientation pre-pandemic, there were a few costs associated with that appearance. Time costs, travel costs, maybe even a monetary cost in missing work or hiring babysitters. Even the nearest attorneys had a 5-minute drive and a 5-minute security wait prior to the mediation orientation.

As we have maintained the content of the mediation orientation across formats, the time cost there is a wash. There is then the 5-minute drive back to the office. I consider this time spent the “sunk cost” of the mediation orientation.

“Sunk cost” is an economic and business term that refers to costs that have already been incurred and cannot be recovered. Economists often point out that spending more money just because you already spent money is irrational – it is “throwing good money after bad.” This is true, but as mediators we know that “rational” is not always how decisions are made.

Consider this example. You find a snazzy new gizmo that you want to purchase is available at a store on the other side of town. You drive 20 minutes across town only to find out that they actually do not have any in stock. After you get over your anger or disappointment, you think to yourself, “I spent 20 minutes getting here and it is another 20 minutes getting home, I might as well look around the store for a bit.” That’s sunk cost affecting your behavior. Your lost time cannot be recovered. Walking around the store is literally throwing good time after bad. But we do it.

This same concept applies to mediation. Even the 15 minutes of sunk cost to the nearest attorneys has an effect. “Well, I’m here. I might as well look around the mediation for a bit.”

Those parties who are further away get drawn in even more. “What’s the harm of spending an hour in mediation when I am spending an hour in the car anyway?”

Even when they were the party in the “right” legally (those with the litigation power), they were willing to engage in the process in person. And the WCRC has a resolution rate of approximately 80 percent – so they weren’t just walking around the store and leaving, they were buying the process and resolving these cases too.

But in the ODR process, the sunk costs are the 1-2 minutes of making sure your webcam is set up and clicking on the link. The ODR process has essentially removed the entire sunk cost from the calculation of whether to engage in the process.

“Why should I spend an hour trying to work this out? I can just click ‘Leave Meeting’ and go back to my day. I’ll spend that hour preparing for trial and wipe the floor with him in court!”

Conclusion: All Factors Come Into Play

As mediators, we have to be aware of all of the factors that play into the parties’ decision-making. This should include the decision-making of whether or not to engage in the voluntary mediation process.

Mediators have benefited from the sunk costs that parties have felt prior to deciding whether to engage in the process, but virtual mediation and ODR have removed many of those costs.

As mediators, we have innovated our process to meet the pandemic times. What changes do we need to make in our ODR process or explanation to recoup some of the buy-in that has been lost due to the changes in sunk costs?

This article was originally published on the State Bar of Wisconsin’s Dispute Resolution Blog. Visit the State Bar sections or the Dispute Resolution Section web pages to learn more about the benefits of section membership.