Our article in the New York Law Journal 4/12/17

Revisiting Agreements After Unforeseen Changes Occur

The current political climate has encapsulated what we have longed recognized: that unpredictable—even outlier, low-probability events—happen. This unpredictability and volatility, when mirrored on a micro level in the lives of parties to a conflict, can be similarly jarring. Faced with such stresses, some parties to conflict seek to regain a measure of control and autonomy in an otherwise chaotic moment. In mediation, a vital aspect of the role of the mediator entails reality-test decisions. And a facet of that effort is to contemplate with the parties various reasonable hypotheticals. This is not merely an attempt to use one’s crystal ball to foresee the future but an opportunity to help craft a flexible and durable agreement. When we work with parties we also discuss likely shifts in their lives, whether personal or financial, that may test the implementation or sustainability of various decisions. And, as with substantial changes in the world order, adjustments must be made. Writ small, in personal contracts, how can mediators help parties achieve their mutual and thoughtful goals while the ground beneath them has shifted unpredictably?

The extent to which we explore with parties various eventualities depends in large part on their dynamic. Some parties are cooperative with each other and do not wish to be locked into a particular way of problem solving, relying instead on deeply shared values and goals; others are looking for a blueprint to guide them should conflict arise with a change in circumstances. Still others, harboring deep mistrust or differing perspectives as to how to problem-solve, need predictability and a codification of their maximum exposure in order to come to final agreement. A prime example of this process comes into play in the mediation of prenuptial agreements when couples, independent and self supporting, are eager to waive spousal support rights and obligations. We may push back: What happens if one of you becomes ill? If you have a special needs child? Wish to retire early? Life happens in all sorts of ways, good and bad, that we try to anticipate.

The very fact that parties, or even lawyers, are coming together voluntarily to problem solve around challenging issues and legal conflicts indicates a desire not just to achieve one’s own goals but also to take into account the other’s perspective. Inherent in this is the hope that there are mutually beneficial solutions and, at a minimum, an ability to prioritize one’s own goals and to understand and work with the other party’s goals as well. As the process moves forward, an important by-product is the building of trust that results from communicating, collaborating and analyzing information with full understanding and disclosure. We often observe that parties arrive at agreements which reflect their intentions as stated during the negotiations and, perhaps, are outside of a legal framework. In the context of divorce mediation, it is common practice for parties to agree to refrain from filing for an uncontested divorce for a period of time after signing their separation agreement, fully understanding that this provision is unenforceable and either may in fact file at any time. This agreement may be, for example, driven by a desire to maintain health insurance for one party. What we learn anecdotally from our clients is that such clauses have a positive effect on their ability to work together and rely on one another even while going their separate ways. The statements of intent effectively reflect the spirit of the mediation and their goals at the time of the writing.

A good many changes are reasonably anticipated: Income shifts may prompt the modification of support numbers or parents imagine re-negotiating a schedule as their child grows up—and often parties work through details of how to adjust various terms of their agreement over time. Though the law, too, provides some framework for modifications, we have worked with couples who craft their own individualized formulas for considering support recalculation, for example. And yet, even with the most thoughtful efforts, the unexpected may and occasionally does occur.

We have learned: When parties who have mediated detailed agreements confront unforeseen and complex changes in circumstances, they will choose to return to mediation to work through a new conflict. Having experienced direct and thoughtful facilitated conversations, they have the history and tools to continue to work together. Perhaps most remarkable, these clauses and conversations help parties through some exceptionally challenging circumstantial shifts. The default, rather than girding for battle, is a faith that perspective-taking and listening while also asserting one’s priorities, can yield results.

So, what happens when parties return to mediation, facing a difficult and unforeseen change? Imagine: business partners in a thriving practice and one wants to retire early and be bought out; an agreement to provide health insurance and the law shifts underfoot; a dream job arises overseas, upending a parenting and financial agreement. Or even, less dramatic and less of a win-lose proposition: An adolescent child is going through a difficult stretch and the parties are at odds as to how best to see “junior” through the challenges; a business partner is going through a divorce and the business planning needs to be re-evaluated because of separate divorce obligations. How does a mediator address the shifting circumstances, if not the shifting goals and values?

In essence, we conduct the process, all the while asking: Are the goals and values the same? Often, while circumstances have changed, the parties’ dynamic has not. In such a case, the conversation flows around how to achieve mutually agreed upon objectives given the new reality. More complex cases may entail a divergence from the parties’ previous intent and values. There, though mediation is a forward looking process, we must focus on what has caused conflict in the interim, just as history informs decisions the first time around. By understanding where the prior agreement has not held up, mediators help parties use that information to inform new agreements. While they may be at impasse, where certain aspects of the agreement have not worked, “failure” is examined to glean essential details that serve to create better terms going forward—thereby obviating future conflict. Has the dynamic of the parties contributed to the difficulties (usually, yes)? If so, is there a motivation to try to shift the dynamic to one that will mitigate the source of ongoing differences?

An ever-present component of nearly all mediations is the weight given to prior agreements. When parties first come to mediation, they often have a history of making promises to one another, particularly on the eve of splitting up. Then, upon further exploration in mediation, these promises may turn out to be impracticable or unenforceable. This comes into particularly sharp focus when parties return a second time to mediation and one is holding on to prior agreements, though they may no longer serve the mutual goals of the parties—or even be viable. The reliance on prior agreements in such circumstances must be plumbed: first explore the implications of strict enforcement and, second, broaden the consideration of how to view and solve the current breach. Parties work toward a more nuanced point of resolution that veers between the letter of the agreement and litigation.

And, of course, the law is an essential frame of reference always, particularly when the change of circumstances gives way to impasse. Indeed, appreciating the range of likely legal results narrows the gap between each one’s perspectives. So too does a detailed examination of the alternative forum should the history leave the sides entrenched. One aspect of the law that arises from time to time is how to address a change in the law when parties too are facing shifts from what they had agreed upon. For example, as all citizens contemplate how access to medical care may shift in the coming years, agreements made last year, with assumptions drawn from the Affordable Care Act, may need to be renegotiated given a likely change in the law.

Finally, there are some specific ethical considerations for mediators when parties return to re-negotiate the terms of an agreement. Just as the law and prior agreements are standards against which to assess terms, mediators are often called on to recall previous confidential conversations and weigh in on prior intentions—thus empowering the mediator in a way that may challenge neutrality. When that happens, best practice entails the mediator sharing the past notes with the parties in much the same way the mediator might present legal information. In other words, without judgment or commentary, but in a matter of fact manner, allowing the parties to evaluate what weight, if any, to give to previous sessions, the content of which was not fully captured in a final agreement. Another ethical quandary may arise if the parties seek to pierce the confidentiality of the mediation sessions while litigating a change in circumstances or a breach of contract. As we have written previously, confidentiality is an essential tenet of the process and must be preserved to ensure open, transparent negotiations and should not be compromised, even if both parties wish the mediator to testify.