The use by mediators of what has become known as a “mediator’s proposal” can be controversial. A mediator’s proposal is generally understood to be an “end of the day” effort by a mediator to bring closure in a case by suggesting an outcome to the parties that the mediator thinks will have the best chance of both sides being able to agree to. These are often framed as, “Can you live with it?” Some mediators find this kind of intervention to be extremely effective and use it in many if not most of their cases. Others express concern that if parties expect that mediators will end up at the end of the day suggesting a number to resolve the case, they will rarely confide to the mediator their true settlement range.
In the course of discussing this subject with colleagues, it has been fascinating to discover the myriad ways in which mediators actually “do” mediator’s proposals. This article explores some of these ways.
The “traditional” mediator’s proposal occurs after many hours of mediation when the parties are at apparent impasse. Typically, the mediator will suggest and explain the concept and obtain the parties’ approval before intervening in this manner. An explanation might sound something like the following:
There is one more thing we can try in an effort to help you reach settlement, and that is a mediator’s proposal. What this involves is my trying to come up with a number that has the best chance of both sides saying “yes” to. It is not a number that necessarily reflects my own evaluation of the case, it is rather a number that I think may be one you both could “live with.”
The way the process would work is that I would come up with a number and communicate that same number to each party. You would have some time to think about it, then you would tell me in confidence whether that is a number you could accept as a settlement. The other party will not know your answer unless you both say “yes.” If you accept the mediator’s proposal and the other side rejects it, they will never know that you accepted it. I will simply announce that we do not have a settlement.
If all parties agree to the procedure, some mediators make their proposal right then and there. Others like to ponder the appropriate number overnight and call the parties by telephone the next day. Still others provide their proposal in writing several days after the mediation, accompanied by a detailed rationale.
In an informal survey of my colleagues, almost all of them indicated that mediator’s proposals are effective, although sometimes not on the day the proposal is made and sometimes not at the exact number proposed by the mediator. Reports as to the frequency of use of the technique varies among mediators, with one mediator reporting use in 40 to 50 percent of his cases, another in 10 percent or less of his cases, and others somewhere in between.
Variations on the Theme
One of the simplest of the variations of a mediator’s proposal involves the issue of keeping each party’s answer as to whether or not they would accept the proposed number confidential. One experienced mediator I spoke with theorized that if one party has accepted the proposal, it might sway the other party to also say “yes” if they knew that their own “yes” answer would end the case. In fact, this particular mediator has experimented with this form of mediator’s proposal and found that his theory works in practice. He has taken care, of course, to ensure that he has the permission of the party saying “yes” to disclose that fact to the other side. It should also be noted that he does not tell the parties in advance that if he gets one “yes,” he will ask if he can disclose that “yes” to the other party. In this way, he hopes to prevent each party from awaiting the other’s response before it responds.
Another colleague said she sets up the process for a mediator’s proposal by floating not only the concept of a mediator’s proposal but also the range in which that proposal would fall. She will say something like the following, to each side in turn:
I’m thinking about making a proposal in the range of, say, 1.3 to 1.7 million. I don’t want a reaction from you right now, and I am not fishing, but there’s no sense in my making a proposal that will be dead on arrival. Is this at least a range that you could seriously consider?
She reports that once both parties have had the opportunity to think, without pressure, about such a range and agree to it, a mediator’s proposal within that range is almost always successful.
Another well-known mediator in I spoke with articulated his view of how a mediator’s proposal should be formulated as follows:
I believe that the dollar number that the mediator proposes should be based on the mediator’s independent judgment as to the value of the case based on an objective decision tree analysis and not on the midpoint between what the parties claimed to be their respective bottom lines. Ideally, the mediator should propose a number in the middle of what s/he believes is the win-win range… I would not be comfortable … proposing a number…merely because I thought it might be accepted by both parties. The issue is not what the mediator believes is fair (a totally objective standard), but what the mediator objectively believes is better for both parties than their litigation alternative.[i]
This approach, of course, differs from that of some other mediators’ proposals in that it is based on the mediator’s objective view of a settlement that he or she thinks is better for the parties than their litigation alternative, as compared to his or her subjective belief as to a proposal that will be acceptable to both parties.
Yet another practice difference relates not in the formulation of a mediator’s proposals but, rather, to the way in which they are presented to the parties. One colleague presents his mediator’s proposals to the parties in writing with a detailed, reasoned analysis of why the number makes sense in the context of the particular case. Depending upon the situation, the writing will vary in length from three or four paragraphs to two to three pages. In his mind, the number he recommends is generally justified both by a risk analysis and the likelihood that it will succeed in settling the case. He said that a written analysis can be particularly useful in cases where a “higher up” individual who did not attend the mediation will be the one making the ultimate settlement decision.
As is common among mediators with respect to practice issues, there is a countervailing view. Another mediator with whom I discussed this approach said that she did not provide reasons for her number because “the parties can always pick apart your reasons, each finding an argument with which it disagrees. I think that the chances of a mediator’s proposal succeeding are considerably greater if one provides the parties solely with a number to which they must say ‘yes’ or ‘no’, rather than with a reasoned opinion in which they can always find flaws.”
There are doubtless other variations in the ways in which mediators make mediator’s proposals although the variations described here seem to be among the most common. Let us consider, then, how mediators handle the variety of possible responses to their proposals. What happens if one side says “yes” and the other says “no”?
In theory, if one side accepts the mediator’s proposal and the other side rejects it, the mediation is over and the parties are left to face their alternative, whether litigation or arbitration. If this were not the case, parties would try to game the process, and the finality of the procedure, at heart its basic appeal, would be compromised. However, at least one mediator has approached this kind of situation in a different vein. He has gone to the party who has accepted the proposal and said something like the following:
I know that we agreed upon the ground rules going into this process, including the promise that I would not tell the other side you accepted the proposal unless they, too, agreed to it. But here I think it might make a real difference if they knew you had accepted it and, I will really lean on them. I think it’s highly likely that if they know you accepted they will go back to their decision-makers and get a different answer.
This approach, he reports, generally results in resolution, even though it does not adhere strictly to the traditional “rules of the game.”
Risks and Rewards of a Mediator’s Proposal
There appears to be general agreement among mediators and parties alike that while a number of years back the concept of a mediator’s proposal was not well-known, the more widespread use of this technique has led to its more common usage as a potentially useful settlement technique in appropriate circumstances. At the same time, the more widespread use of this technique has its downsides. If parties expect that the mediator may make such a proposal at some point, they may intentionally mislead the mediator about their true intentions in an attempt to set the range of the ultimate proposal.
So, where does this leave us? To answer simply that this leaves us between a rock and a hard place seems like a dodge. I have always advocated for use of the technique sparingly for the reasons articulated, but the cat is very clearly out of the bag, and there is no going back. Indeed, despite the dreamy ideals of the early mediation adherents, as mediation has become more and more an accepted part of the litigation process, it is not surprising that litigants have come to “game” this part of the process as well. Mediator’s proposals are very alive and well and an increasingly accepted – and often anticipated – part of the mediation landscape. Perhaps one can do no better than to advocate that mediators be thoughtful about whether, when and how they use this very powerful technique. Such a perspective, I believe, would truly benefit the mediation community as a whole.
Margaret Shaw has maintained an active mediation practice for more than thirty years. She joined JAMS when a firm she co-founded, ADR Associates, merged with JAMS in 2004. She was also for more than 25 years an adjunct professor of law at NYU Law School, where she taught ADR and negotiation. Contact her at firstname.lastname@example.org or www.jamsadr.com
[i] Stephen A. Hochman, A Mediator's Proposal— Whether, When and How it Should be Used, in Definitive Creative Impasse-Breaking Techniques in Mediation 223 (Molly Klapper ed., 2010).