Beware the 'Sunk Cost Trap'

The ' Sunk Cost Trap' is a concept that interests me because it helps to explain behaviour that causes us to cling to something because of our investment of time, effort or money in it rather than to cut our losses and move on.

According to Investopedia, the 'Sunk Cost Trap' is the tendency of people to irrationally follow through on an activity that is not meeting their expectations because of the investment of time and/or money they have already spent on it.

Although an economic concept, the Sunk Cost Trap is also a psychological phenomena and applies to many aspects of life including dispute resolution. It causes individuals to stay the course or even invest more time and money in a bad decision or course of action in a futile effort to make their initial decision seem worthwhile.

In mediation, we often hear the plea that " I might as well go to court. I have nothing to lose as I have already spent $60,000 on it, why would I give up now". Of course, if it was the wrong decision in the first place then throwing more money or time at it will simply make it worse.

The rationale behind it is that we have a genuine interest in making our efforts worth our while and even if we consider our efforts, time or money spent to be in vain,we are reluctant to abandon them.

Somehow we believe that by continuing , we can recover sunk costs but the reality is that they are gone and we can't.

Similarly in life, it would be like persisting with an unfulfilling job just because we had invested so much time in it or a country persisting with a war so the lives already lost are not wasted.

Allowing ourselves to admit mistakes and move on is far better than entrenching ourselves in a situation just to save face.

The fact that we have already invested a lot in legal costs can never be a good reason for persisting in going to court if the better decision  in the circumstances is to cut our losses. Cutting our losses, means admitting that we have made a mistake  and we all find this hard to do but ultimately it may be the more productive decision.

For all inquiries about the benefits of Mediation phone us at Brisbane Mediations on 07) 38397400 or visit our website www.brisbanemediations.com.au. You will be pleased you did!!

Family and Relationships Mediation

Separation is never easy.   

Talking to your ex is especially difficult when you first split up. 

If you have kids there are lots of things to sort out. Both of you will want to stay close to the children and have a lot of involvement in their day to day lives, but it is often difficult to reach agreement because of all the hurt, pain and anger that is normal at the time of separation.

Even if you and your partner got along fairly well in the past, conversations about the kids and money can result in arguments.  In some cases, communication can completely break down, making it seem impossible to move forward. 

Mediation can help. 

What is Mediation?

At it’s simplest, mediation is a chat assisted by a neutral, independent and professional mediator - about the children, splitting up the assets and how you and the kids are going to manage financially.   

Mediators work with couples involved in family breakdown to help them communicate and agree on arrangements.

Mediators can help you reach agreement about how much time you are each going to have with the kids, how the assets are going to be split and lots of other things as well.

Mediation is designed to save you the cost and distress of having to go to Court.  The court process is expensive with long delays.   It is also highly stressful.  Naturally, it is to be avoided if at all possible. 

How does Mediation work?

Usually one member of the separating couple will decide he / she wants to mediate and their chosen mediation service can then invite the other person to mediate.

Each of you will first up attend an introductory session with the mediator to help you feel comfortable with the mediator and the process.  This session also helps the mediator to understand both sides of the story. 

Each intake normally takes one hour and the mediation itself will usually takes at least half a day.

Mediation provides an opportunity for each of you to put forward your point of view and to be heard by each other in a safe environment. Mediation can help you express feelings without this leading  to arguments, as the mediator will encourage both of you to listen quietly whilst the other is speaking.

The mediator  may, according to his or her training and experience, explain legal principles and possible court outcomes as well as the benefits or disadvantages of various options.

At the end of the mediation, if agreement is reached, the mediator will help you write up a document reflecting the agreement, or if lawyers are present, the lawyers will normally do this.

It is always your right at the end of a mediation to ask to receive legal advice (if your lawyer is not present) before you sign.  Most people who attend mediation do not, however, request this.

Mediation  is the preferred option to use when you split up as it encourages and enables you to maintain amicable relationships with each other into the future.  This is especially important when you have children to consider. After all, they will be your babies as long as you are alive! They want the two of you to be able to get along - at least to the extent needed to make them feel comfortable when they are around you both.

Contact us at Brisbane Mediations

EMAIL resolve@brisbanemediations.com.au

PHONE 07 3839 7400

Where do I go when I am in dispute with someone?

For a long time the answer to this question has usually been to engage a lawyer and file court proceedings. This often results in a dubious outcome, obtained after long delays and very substantial costs that disputing parties can't afford. Relationships are further harmed and if the dispute is one between parents, children are often caught in the crossfire.

Some disputes need a court solution, but many, particularly in the area of relationships are better dealt with without the delays and costs of court proceedings.

Brisbane Mediations offers a new way of resolving disputes in a cost effective, timely and above all respectful way.

Brisbane Mediations is only a phone call away and has the expertise to guide you through the dispute without the disadvantages of court proceedings. In fact, our aim is to keep you out of court and to help you find constructive, cost effective solutions.

Call us- you will be glad you did!

Finders,Minders,Binders and Grinders

When de-cluttering in my study recently, I came across Nick Farr-Jones's story about asking his first boss:" What kind of law do you think I'd be good at?".

The answer was, "don't worry about the sort of law you should do, work out what sort of person you are. There are finders, minders, binders and grinders".

" I've never forgotten that" said Farr-Jones who classifies himself as a "finder" of new business and a " minder" of existing relationships, as opposed to a " grinder," who doesn't like going to client meetings but loves sitting behind a computer doing financial modelling, for example.

The message is clear, find out what role you like and are comfortable with and you are likely to be happier with your job and of greater value to the business.