By Layn R. Phillips, Tom Gregg and Clay Cogman

You would be forgiven for thinking that the field of commercial mediation in the U.S. is unrelated to the field of international conflict mediation and hostage negotiation. Mediator Judge Layn R. Phillips and Senior United Nations Negotiator Tom Gregg, both disagree; their fields are not unrelated, and are more akin to siblings than distant cousins at that.

This PADRE Insight is about two kinds of mediators with backgrounds that couldn’t be more different, and yet whose work is strikingly similar.

On one side is Judge Layn Phillips, former Federal Judge, U.S. Attorney, AUSA, and trial lawyer in private practice, now a mediator for 30 years, with Clay Cogman by his side for many of those matters over the last decade at PhillipsADR. Judge Phillips has mediated some of the largest and most high-profile litigations in the U.S., successfully resolving such matters as the NFL Concussion cases, the Petrobras Securities Litigation, and the PFAS/AFFF cases involving Public Water Providers, 3M and DuPont. The experience and results of Judge Phillips and his team of neutrals are often well publicized in legal circles and the national press, earned through a known track record of solving complex and protracted commercial disputes.

On the other side is Tom Gregg, a Senior Official of the United Nations who has spent the past 20 years negotiating between armed groups and governments on peace agreements, humanitarian access, and hostage recovery. He is frequently deployed on missions to the Middle East, Africa and Central Asia to navigate the complex world of international conflict, often negotiating with designated terrorist groups. When the Taliban took over Afghanistan in August 2021, Mr. Gregg was asked if he would set-up and facilitate the first face-to-face meetings between the United Nations and the Taliban leadership; days later, he boarded an aircraft operated by the Qatari Airforce being flown into Kabul. He is recognized globally amongst governments and a discrete community of actors.

This commentary sees these mediators reflect on the similarities of the skills they use to navigate their respective duties as neutrals tasked with solving complex problems for parties in conflict.

Universal Mediation Principles and Practice
Commercial and international conflict mediations are, at their core, transactions that operate within a known marketplace. In the case of commercial mediation, the marketplace is influenced by precedent and reputational considerations, and transactions are largely measured in dollars and cents. Mediating parties will more often than not advocate for their settlement valuation by reference to “comparables”—recent past cases with similar fact patterns and legal issues—making the case as to why a settlement should be higher or lower than that historical case.

In the case of international conflict mediation or hostage negotiation, the ”marketplace” is determined largely by political considerations, media attention, battlefield realities, and legal and/or policy constraints–for example, the U.S. doesn’t pay ransom for citizens held hostage while some other countries do. Individual transactions typically must be woven into a larger peace process. For example, in 2014, when five Taliban prisoners from Guantanamo Bay were released in exchange for a U.S. Army soldier, the deal–already unpopular in Washington–was only politically possible because it was linked to a wider effort towards a peace process.

Whatever the scenario, a mediation process represents high stakes for the parties to the conflict; emotions are often high and media attention only adds more pressure. The mediator must be attuned to the concern that the resolution brokered will be judged against a wider set of marketplace considerations by not only the constituencies present and the decision-makers behind them, but a range of market observers as well.

Any mediation, be it a commercial dispute, hostage recovery, or a peace process, requires structural elements to be in place as a pre-condition for a successful outcome. It is the mediator’s job to ensure that is the case.

Timing is Everything
The first question a mediator must ask is: are the two sides ready to make a deal? A mediator cannot want an outcome more than the parties. In commercial litigation, the right time to seek an agreement is when both sides have meaningful “skin in the game,” perhaps due to factors such as a pending ruling, brand reputation, heavy short-term transaction costs, or a mutual desire to avoid trial. Judge Phillips once settled a securities case only after three unsuccessful sessions over a period of several years. Even at the time of settlement, the parties held passionate, diametrically opposed views of the merits of the case. Why did they settle? Because the presiding judge was among the slowest and most permissive judges on the federal bench with respect to discovery, and the parties knew that resolution of the case through litigation—rather than settlement—would take many years and cost many millions of dollars in attorney and expert time.

Similarly, in an international conflict setting, a conflict is considered ripe for mediation if there is a “mutually hurting stalemate.” If one side feels it has the battlefield advantage, it is unlikely they will pursue a mediation. Conversely, if one side feels like its losing militarily, it may seek talks not to reach a compromise, but rather to buy time politically or tactically for military resupply and training. In Ukraine today, while there is a battlefield stalemate of sorts, neither side is hurting sufficiently. Russia will likely wait for the outcome of the U.S. presidential elections to better understand the strength of their position before even considering “talks about talks.”

Do we have the Right People in the Room?
For a commercial mediation, the mediator must assess, in consultation with the parties’ representatives, who is the person (or persons) that will maximize a resolution opportunity and commit to a settlement effort. That person may be outside legal counsel, in-house counsel, a trusted advisor or consultant, a business executive, or even an insurance representative. In international conflicts, titles are less defined, but the mediator must ensure they have identified the person who can truly effectuate an agreement.

This is not always straightforward. Representatives of businesses involved in high exposure litigation may have personal motivations that do not align with quick resolution. This type of mediation player could be a talented attorney eager to impress a potential long-term client, or an in-house representative with his or her own career goals in mind. Empowering those who are there to make a deal versus who are there to fight requires diplomacy, tact, and building credibility with both types of actors.

For parties to conflict mediations, the primary problem is often the lack of reliable information. (MI6, the British intelligence service, once paid $100,000 for meetings with the leader of the Taliban in Pakistan, only to learn later that ‘their man’ was an imposter.) In the case of hostage negotiations, credibility is established through a “proof of life” with a “time-stamp”, such as a video of the hostage speaking a sentence that speaks to the time of the video but without compromising the kidnappers. In one of the hostage cases Mr. Gregg was involved in on behalf of the U.S. government, he requested the hostage state on a video: “I am also concerned about the famine in Somalia”. When he received this video one week later, it was both a proof of life but also evidence that his interlocutor was credible.

In both settings, credible representatives with delegated authority are perhaps the most important indication to the mediator that the parties are serious and acting in good faith. Determining the credibility of both sides and assuring the parties that the mediator has discerned good faith, likewise builds the mediator’s own credibility.

Credibility Born from Empathy and Experience
A former U.S. Deputy Secretary of State once referred to international conflict mediation as a form of “cognitive therapy” to the parties. In the case of war and kidnappings, the “enemy narrative” often clouds both parties’ ability to understand the motivations, interests, and threat perceptions of one another. This is equally true for commercial disputes where competition in business is fierce and high-stakes, and the legal counsel involved often have a long, and sometimes bitter, history with each other. It is beholden upon the mediator to understand and discreetly identify these prejudices, not necessarily to verbalize them, but rather to ensure that these prejudices don’t feed further misperception or miscommunication during the mediation process. This is especially true in the case of cross-cultural mediations, where the mediator must “hear” what one party is saying while also considering how this might be interpreted, or misinterpreted by the other party, and clarifying if need be.

The mediator must also look out for displays of raw emotion in a mediation process and quickly deal with it whenever it arises. While “venting” can be a useful form of therapy, unchecked emotion will most often derail a negotiation. Professionals will usually strive to stay professional, and diplomatic norms are generally upheld in international conflict settings, but conflicts by their nature have the potential for aggrieved parties to leave reason and practicality behind in favor of emotion. While the mediator may occasionally use some emotion to tactically nudge one side or the other toward agreement, more often than not, raw emotion risks undermining a crucial but fragile ingredient of a mediation: trust.

The first casualty in any commercial or international dispute is trust; if trust was present, the parties would likely not require a mediator in the first place. From the outset of all mediations, it is paramount that the parties trust the mediator and the team they assemble. It is then the job of the mediator to ensure that this trust is transferred into the mediation process.

A mediator in international conflict and hostage negotiations will identify a series of “CBMs” or confidence building measures that have a practical value but also lay the foundation of trust building for the mediation process. In one of Mr. Gregg’s dealings, a modest CBM was allowing the hostage to record a video message that was transmitted back to their family. In return, the armed group requested that one of its members being held in a detention facility in Afghanistan have a call with his mother and receive a doctor’s visit for his eye condition. A mediator like Mr. Gregg may sometimes be asked by both parties to provide a “security guarantee” as both delegations may fear for their personal safety. Being able to deliver on such a guarantee relies on the trust and experience of the mediator with both the respective government(s) and the armed group.

While personal safety is not typically a concern in commercial mediation settings, the trust placed in Judge Phillips by mediating parties is just as important to a successful outcome. Parties must have faith in Judge Phillips’ ability to advance their interests, while keeping their secrets and not compromising their goals, and a good mediator similarly lays the groundwork for that trust at the first opportunity. A commercial mediator’s CBM may be an early private caucus well in advance of the mediation, or brokering a location for the mediation that makes all constituencies equally comfortable. In one mediation, an attorney asked to have a meal with Judge Phillips before agreeing to mediate with him. This extended meeting in a more intimate setting allowed this individual to “size up” Judge Phillips, and he has since been a frequent user of PhillipsADR.

Whether the stakes are the monetization of a lawsuit or someone’s freedom, being a mediator is about more than knowing the facts; the negotiator needs both a comprehensive understanding of the external influencing factors and a well-honed skill set in dealing directly with the players. Success in mediation is achieved where the mediator looks outside of the core facts of the dispute to structure their approach and adhere to a set of guiding principles. Mr. Gregg’s world is more chaotic, less structured and features higher stakes but at the end of the day, Mr. Gregg and Judge Phillips are both compromise artists tasked with building solutions acceptable to parties often with diverse backgrounds and diametrically opposed goals. Their circumstances are different, but their handbook is much the same.