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December 28, 2017 Practice Points

The “Mediator’s Proposal”

Two national mediators discuss how close parties need to be to consider this approach to settling a case

by Jeff Kichaven and Paul Van Osselaer

Jeff Kichaven: The mediator’s proposal is like cross-examination: The best cross-examiners never ask a question unless they know the answer. The best mediators never make a mediator’s proposal unless they know it will be accepted. How do mediators do this?

First, there’s timing. When most of the gap has been closed and you sense the aroma of settlement, but the bargaining stalls and nobody wants to blink, that’s the best time for a mediator’s proposal.

Then, there’s planning. I like to get counsel’s permission to make a mediator’s proposal. I also discuss possible numbers with counsel and don’t like to make a mediator’s proposal unless all counsel agree to recommend the number to their clients. With those recommendations, we’re likely to succeed.

If a mediator’s proposal is rejected, it can kill the negotiation. That’s why it’s so important to make mediator’s proposals skillfully, at the right time and in the right way.

Paul Van Osselaer: Many of my mediations settle with a mediator’s proposal, but I only do mediator’s proposals when it appears that a mediation session will otherwise clearly fail. I require consent of all parties to do one; there have been times I decline to do a proposal despite urging by one party when I think reasonable follow-up has a better chance of a settlement based upon what I may know in confidence.

For a mediator, it’s important not to let a mediation fall into the trap of parties trading numbers but holding back toward to end figuring that I’ll do a proposal anyway. I do that through dialogue with the parties, just not being a number-passer. A mediator’s proposal is only useful when we’ve gotten even beyond the stage of “If I can get them to do ‘X”, can you get there?”

I have two rules about a mediator’s proposal, which I tell the parties: If I use a number by way of example in discussing the concept (or any counsel or party uses one), my proposal is never that number. And it is never the mid-point. I find that parties appreciate those rules; it signals that my number can’t be privately negotiated and keeps them focused a bit longer on trying to strike a deal in other ways.

In setting the response deadline for a proposal, sometimes I press for an answer that day if I believe that creates the best chance for a deal. But other times, I recognize that the stretch will either take more time to get serious consideration or may just require an evening away from the pressure of the mediation proceeding. I determine the response time in consultation with all counsel and make that determination before announcing any number. I also never want to receive an answer that says “yes, subject to [a previously unmentioned deal point].” So, whether I am doing a mediator’s proposal or even when I see parties getting closer to deal in traditional bargaining, I get counsel together to outline either orally or in writing the non-monetary terms of what the deal would look like.

I must admit I occasionally do a mediator’s proposal that counsel and I know may be a “Hail Mary pass” (I’m still searching for an equivalent sports expression for my London parties not familiar with American football). Obviously, I prefer to have a high degree of confidence from all parties that my number will be accepted and that happens in most cases, but sometimes in American football the desperate pass is caught, or here when mediation parties retreat to think about it or speak with others. Finally, every once in a while I learn of a benefit to a failed proposal I am prohibited from sharing with all parties after I announce there is no deal: On more than one occasion—where there has been a party saying “yes” and one saying “no,” thus yielding a simple “sorry; no deal” report from me—I have learned of a later settlement where the “yes” counsel later privately advised me that the client’s earlier stretch for my proposal, while failing to get a deal then, psychologically was instrumental in getting the client part of the way to what it ultimately took to resolve the case after months of further legal wrangling. That’s obviously never shared with the other party, but it is a good reminder that mediation is a process and sometimes it takes beyond the session itself to get to a settlement.

Jeff Kichaven is with Jeff Kichaven Commercial Mediation, Los Angeles. Paul Van Osselaer is with VanOsselaier Dispute Resolution PLLC, Austin, Texas. They are cochairs of the ICLC Alternate Dispute Resolution subcommittee.

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