A riddle:
What’s the difference between a mediator’s proposal and cross-examination?
An answer:
In cross-X, you don’t ask a question unless you either know what the answer will be or don’t care. With a mediator’s proposal, though, we care deeply about the answer. So, we’d better know in advance what the answer will be.
The “mediator’s proposal” is the mediator’s invitation for all sides to agree, simultaneously, to terms of settlement. The sides respond confidentially to the mediator. If all sides accept, the mediator uncorks the champagne and announces a deal. If anyone rejects the proposal, the mediator simply announces “no deal,” and the rejectors never learn how anyone else responded. The utility of this device is that the conditional, confidential nature of an acceptance allows people to demonstrate a willingness to move in a negotiation without fear that they will be setting a new floor or ceiling which others can then use against them.
Why do we want to know in advance that the mediator’s proposal will succeed? Because if it fails, we are up to our hips in trouble. Let’s say one side accepts and the other side rejects. To the acceptor, the mediator’s proposal is then imbued with an aura of inspired wisdom. It’s daunting to get the acceptor to move closer to the rejector’s position, even if that’s what’s necessary to make a deal. We are stuck.
A solution:
Here’s an approach I commonly use to ensure success. I make the timing and substance of the mediator’s proposal the subject of negotiation between the sides.
First, the timing. When bargaining stalls, I commonly ask the lawyers whether it’s time for a mediator’s proposal. Sometimes they say yes, sometimes they say no. Either way, when I ask their thoughts, I learn valuable information about how the mediation should proceed.
Next, the substance. If it’s time for a mediator’s proposal, I commonly discuss with the lawyers what it would take for them to consider recommending that proposal to their clients, even if only grudgingly. These discussions almost always take place with the lawyers outside of their clients’ presence. Sometimes, the lawyers and I hash it out together; sometimes, I shuttle between them.
Sometimes, lawyers are taken aback by this approach. But once I ask “What’s the sense of making a mediator’s proposal you won’t even recommend?” and discuss our shared interest in having all sides accept whatever mediator’s proposal is ultimately made, we are generally able to proceed. Then, once we agree on terms all lawyers would recommend—voila!
I have never had this process fail.
The teaching point:
When you select a mediator, make this part of your due diligence. Ask about the mediator’s practices regarding mediator’s proposals. Does the mediator generally seek permission before making mediator’s proposals? Does the mediator consult with the lawyers in advance about the terms of mediator’s proposals, or does the mediator just pluck a number from his ear (or another aperture)? Make sure you’re happy with the mediator’s approach before you make your final selection.
We all know that questions typically ask who, what, when, where, why, or how. This essay puts forth a few tips relating to several of these in my mediator’s proposals.
The proposed resolution is not my evaluation of the matter and it is invariably a number disliked by all sides. It is a number that I believe to which each side will grudgingly agree to settle the case. This is also true of nonmonetary terms that are put into my proposals. If I were limited to only one tip it would be this: because lawyers and parties still believe that the proposal is my evaluation of the matter and they tell their negotiation constituents that it is my evaluation. Thus, my proposals expressly state that it is not my evaluation of the matter.
By email, I issue a written proposal with bullet points for key terms that may later become sticking points when parties are drafting their settlement agreement. The process of drafting such proposals sometimes takes just an hour and sometimes it takes days or weeks. I call the number only (traditional) proposal, “mediator’s proposal lite” because it usually issues during the mediation session with a response deadline during the session, lacks the comprehensive detail of an email proposal, and will be followed in the mediation session with either a short or long form settlement agreement.
I will not foist a mediator’s proposal on parties. Parties choose to go the route of mediator’s proposal, not I. Sometimes people select a mediator because they know that the person will issue a proposal at the end of the session even if the participants do not want to receive one. Some mediators will not ever make a mediator’s proposal. These are important mediator styles to know before you start thinking about the possibility of a mediator’s proposal being the way the negotiations get over the finish line.
I only issue a mediator’s proposal if the parties are unable to reach a negotiated resolution and there is a place that all might grudgingly go, but for various reasons they cannot do so through their negotiations. The reasons for being unable to reach resolution through negotiation can be that people need to preserve bargaining position just in case the matter does not settle, or they need to obtain authority to settle “there” and the way to obtain it is to know that the authority will settle the case, or other reasons for which we do not have time here.
Regardless of what approach your mediator takes, if you have a mediator who does do mediator’s proposals, then timing is key. Mediator’s proposals are helpful when the time is right. I only issue a mediator’s proposal after the concept of it and its likely terms have been explored with the parties and counsel. If I tell you that I cannot issue a mediator’s proposal in your case, it generally means that the time is not right for it.
Parties ask for a mediator’s proposal earlier in the mediation process and more frequently than five years ago. In April to September 2020 I did more mediator’s proposals than I had in the previous six years put together. This phenomenon has not abated in the following years. This may be the nature of the disputes that I mediate or it could be a shift in the way people negotiate in mediation.
