How can settlement prospects be improved by the early use of our emotional intelligence/quotient (EQ)?

Construction disputes often involve complex facts and law. The potential commercial effects of such disputes can put jobs, reputations and profit margins at risk. Those involved operate under considerable pressure, which only increases when court/arbitration proceedings start.

People react to this pressure in diverse ways depending on their personalities and circumstances. Some might pursue/defend their position aggressively. Others might simply ignore requests to talk. Personal relationships can soon deteriorate and the parties’ positions become entrenched.

The Construction Pre-Action Protocol promotes early settlement, before the issue of proceedings, by requiring parties to exchange sufficient information “to understand each other’s position and make informed decisions about settlement and how to proceed” as well as to meet formally at least once.

Lawyers tend to focus on the facts, legal issues and evidence in these meetings (which sometimes take the form of a mediation). However, learning more about the human dynamics early on in a dispute could lead to a deeper understanding of the parties’ respective positions and result in an earlier and more appropriate settlement. Of course, most lawyers tend to know their clients well, but they might not necessarily spend much time learning about the client’s relationship with the other party – or about what might lie behind the dispute.

Consider these suggestions:

  • Treat odd behaviour as a cue to dig deeper. A debtor might respond aggressively to a debt claim to cover up his cash flow issue and buy time. A steelworks contractor might rigorously defend a strong defects claim because it could, if established, damage the contractor’s reputation and potential sales. Knowledge in these cases could lead to a payment plan or confidential remedial works plan.
  • When preparing for a meeting/mediation, take time to understand the personalities involved on both sides. What drives them? Are “behind the scenes” issues influencing their behaviour? Is the business solvent? Are individuals covering for someone (or themselves)? Are directors too busy or unaware of the situation’s gravity (or effect on staff)? Are they unwell? What effect is the dispute having on them and their families? Are they angry, hurt, embarrassed or vengeful? Will the outcome affect anyone’s job/livelihood?
  • How are the parties communicating? Would a change in tone open up discussions that are more positive? Would an apology, acknowledgement or acceptance of responsibility release tension? Is there a practical solution?
  • Is a party nervous of facing the other party? Why? Is it ignorance of the process or is there a more personal reason? Manage expectations. Explain the process. Explain the potential effect of an emotional outburst on that process. Prepare for dealing with such outbursts from the other party.
  • In the meeting/mediation, use your senses proactively: be mindful of both your and others’ tone of voice, reactions and body language. Does the communication style match what is being said? Actively listen and observe during the meeting. Reframe others’ statements to demonstrate understanding – or ask for more explanation.
  • Acknowledge emotions where appropriate and allow people “timeout” if emotions take hold. Can you find something positive to say? Avoid embarrassing anyone. Find a way to help “save face” if necessary.
  • If hosting, be a good host. Do not use lack of food as a tactic: most people do not function well when hungry/cold etc.

While there is no right way to approach a mediation, switching on your EQ as part of the process can open up your understanding of what lies behind a party’s stance. It could improve the chance of finding an early, mutually acceptable resolution that preserves the commercial relationship.

This article was first published in Construction Law on 3 December 2019.