Saturday, April 2, 2011
Mediation and “Bad Faith” Bargaining
I remember, during my mediation training, asking for a clear definition of “bargaining in bad faith” and being disappointed not to receive one. Having now myself done a little research I can understand why the concept is so hard to define, despite many people’s claim to “know it when they see it.”
Most of the legal discussions of bad faith bargaining that I have seen come from the area of labour relations. For example, the Alberta Labour Relations Board advises that, “parties must make every reasonable effort” to reach an agreement. They also list some examples of bad faith bargaining techniques, including refusing to meet the other party, refusing to respect the other party’s representatives, reactivating proposals that have already been settled, adding new areas of discussion late in the dispute, and “surface bargaining.” I would guess that “surface bargaining” is what most people have in mind when they think of bad faith bargaining. It is basically a form of stalling. In surface bargaining one of the parties “goes through the motions” of bargaining, but has no intention of ever coming to an agreement. The BC Labour Relations Board defines bad faith bargaining somewhat more strictly, saying that it is the “deliberate strategy by either party to prevent reaching an agreement.”
Bargaining in bad faith is not the same as “hard” bargaining, but the two can be very difficult to tell apart in practice. Imagine a dispute in which party “A” has made what they consider a reasonable offer to settle. Party “B” refuses to accept it and has not moved very far from their opening position. Did party B never intend to settle, or are they simply convinced that party A’s offer isn’t yet good enough? How would a mediator (or anyone else) be able to tell, short of a private confession by party B? Or imagine a dispute in which party A spends a lot of time going over relatively trivial yet highly detailed matters. Is party A deliberately stalling, or taking reasonable care to protect their interests? And who is to say what counts as a “trivial” issue?
Yet despite the difficulties in characterizing bad faith bargaining, it represents a real problem for mediators and for the mediation process. It is a particularly troubling possibility when one of the parties has greater resources (time, money) than the other. The more powerful party can stall, drawing out the process and using up the other party’s time and money. When the mediation process is declared a failure, the stronger party is in an even more favourable position. The weaker party, having depleted their resources, may agree to an unreasonable offer because they no longer have the money to defend their rights in court.
What should you do as a mediator if you suspect that one of the parties is bargaining in bad faith? I don’t think that there is any way to be sure that parties intend or do not intend to come to an agreement, and it is important not to jump to conclusions. If one of the parties won’t move from what looks like an unreasonable position, try to find out why. Their view of the dispute may be such that their own position is reasonable. How does it differ from your view, and from the other party’s view? But there may come a point in a mediation when the mediator begins to suspect that the process is not serving either party and that prolonging it would not be a good use of their time or money. In this event, the best thing for the mediator to do may be to explain their concerns and then exercise their right to end the mediation.