A Fresno Mediator’s Observations On Effective Negotiations Skills and Techniques In A Mediation: Mediator's Proposal
Have you ever been in a mediation and the mediator or the other side throws around terms like "bracketing" or "mediator's proposal" or "high-low" or some other negotiating jargon? If so, you better know what it is and how to handle it in negotiations. Here, we will tackle the Mediator's Proposal.
A Mediator's Proposal
We have all heard about this one. When negotiations are bogged down, someone recommends, "Let's get a mediator's proposal."
As a mediator, I see this as a "last resort" method because it potentially can end the negotiations and it takes control from the parties and gives it to the mediator with limitations.
I know why the parties like it: Because it takes the control out of their hands. It allows them to use a mediator's opinion as a basis, excuse, or reason to settle, which can be very helpful at times, as we will discuss below but it comes with some caution.
So, what is a Mediator's Proposal?
This is a technique that is often mislabeled and used improperly, creating confusion. A Mediator's Proposal is NOT the mediator giving an opinion as to what a case is worth or the likely jury verdict. A Mediator's Proposal is a set of agreed upon parameters to relay a proposed settlement point with a confidentiality component.
A Mediator's Proposal operates as follows:
The mediator provides both sides the same, proposed settlement amount, which is based on a number he believes the case could settle for (not a jury evaluation)
He provides this number to both parties
He gives a deadline for when each party should respond
Each party provides the mediator with a confidential acceptance or rejection
If the mediator obtains acceptance by all parties, then he advises the parties, who now have a settlement
If one or both parties reject, the mediator advises a settlement was not reached at that number
If one party says "Agreed" and the other "Rejects" the offer, the party that Rejects the Offer does not know if the other side accepted or rejected.
"[A] mediator’s proposal is a settlement proposal that the mediator makes to all parties, and each party is requested to accept or reject it, on the exact terms proposed, in a confidential communication to the mediator. It calls for either an unconditional “yes” or “no” response, without modification, and the mediator is not permitted to disclose the responses that he or she receives unless both responses are “yes.” Thus, if one party says “yes” and the other party says “no,” the one who said “yes” will not be prejudiced if settlement negotiations (or subsequent mediations) occur at a later stage of the litigation."
How Is The Mediator's Proposal Number Derived?
The number comes from the mediator and is a value the mediator believes can or hopefully with stretch both sides but bridge the gap of settlement. It is not a Jury Evaluation. It is not a determination of the Case's Value. It is not what the other side will settle for.
The proposed amount is usually a number the mediator thinks all parties might be willing to reach to settle the case.
"This proposal can not be a proposal of any one party. Rather, it must be that of the mediator. The Mediator’s Proposal is not a suggestion of what the judge, arbitrator or jury will do; rather it must be understood to be in the context of the mediation. That is to say, that the Mediator’s Proposal is an effort to “stretch” both parties beyond that which they would otherwise move in a negotiated fashion, but not so far as to lose the opportunity of obtaining a resolution. In essence, it is a “Mediator’s Proposal” and not a proposal of a judge, jury, or appellate court."
The "Stretch" is key.
The proposed number is likely not within your targeted or hoped settlement range. It likely will be a bit outside, and should be for all the parties. This uncomfortable stretch is the amount that you were not willing to do on your own, but hopefully will do so with the prodding of the mediator and the promise of hopefully settling the case.
The Pros of A Mediator's Proposal:
It can help nudge a party to resolve a case
It can help a party justify a settlement by relying on the mediator
In can overcome a roadblock to resolution
In gives party time to mull over a settlement but keep the parties engaged and under a deadline
The Cons Of A Mediator's Proposal:
Once issued, little negotiation occurs afterwards (however, a skill mediator can revive negotiations, but it will take time)
It takes control from the clients
A party will attack the mediator for providing an "Unreasonable" number, breaking down negotiations
Cause delays
There could be residual feelings of leaving money on the table
Usually works with money, not non-monetary items, which may be just as valuable to a party (eg., commercial litigation situation)
Now, there is a "neutral evaluation" on this case, which might hamper either party from going below or above it to settle the case.
Many mediators discourage a Mediator's Proposal, and others flat out refuse to use it. However, it persists for a reason: It is effective. Mr. Quinn, Esq., a JAMS mediator, noted three reasons why it works:
"[First] Neurological research teaches that reactive devaluation – the tendency to reject any proposal from an opponent – diminishes greatly when a neutral proposes the compromise.
Second, attorneys with mediation experience have come to expect a mediator’s proposal and negotiate accordingly: intentionally leaving bargaining room open knowing that the mediator will propose the one final compromise. Thus cases that would likely have settled through party negotiation alone now arrive at impasse as each side anticipates a mediator’s proposal.
Third, a mediator’s proposal allows the party representatives to feel -- and to tell their bosses -- that they held firm but the mediator 'made them do it.'"
Next time someone proposes a Mediator's Proposal, you will know what they mean (or should mean). Plus, you will now know whether such a tool will be helpful. Some cases it will; others it will not. It is a tool, and one that can be wielded deftly and effectively. However, it can be over-used, distorting the mediating process and hampering a settlement. Use it wisely and it just may help you settle that nightmare case.
For a visual summary:
MORE RESOURCES ON MEDIATOR'S PROPOSALS
For more resources on Mediator's Proposals, check out these articles:
We plan on having more on Mediator's Tools Everyone Should Know. We will focus on Bracketing next. Stay tuned.
WHAT NEXT?
I am a mediator in Fresno who mediates throughout California and beyond. I will use the Mediator's Proposal, when needed, and I am available for all your mediations. You can reach me to schedule a mediation at:
PEEL | GARCIA
3585 W. Beechwood Ave., Suite 101
Fresno, California 93711
559-431-1300
--Troy
P.S.-Get a FREE printable PDF of our
TOP 5 NEGOTIATION TIPS
(throw it in your briefcase to read while that mediator is in the other room and impress him when it's your turn to negotiate)
**This publication is provided as an educational service and is not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.