Do you dare open the box?
A request for a proposal may signal a problem with client control, and maybe the mediator should explore this first. Some conferring with client and counsel may be preferable to ramming a proposal down the client’s throat.
I should state at the onset that I am an overall advocate of the Mediator’s Proposal as a [usually] late-in-the day method to move a mediated claim toward resolution. I would estimate that about 75% of the cases I mediate that conclude with a Mediator’s proposal, resolve at the proposed amount. The Mediator’s Proposal is nonetheless fraught with potential pitfalls and should be employed with all of these in mind. Let’s look at the Mediator’s Proposal, both conceptually and practically.
A Surrender of Self-Determination?
Self-determination is the cornerstone of mediation. While the Mediator facilitates, he/she is not supposed to take sides, make pronouncements, and predict outcomes. Yet, arguably, in recommending a settlement figure, our Mediator has stepped into a role more akin to a decision-maker.
Even a proposal replete with disclaimers and delivered with all humility is likely to be received as originating from a higher authority. After all, the parties have either agreed on a given Mediator based upon merit, or the Mediator was assigned with the imprimatur of the Court. While self-determination is ostensibly still preserved by the voluntary nature of the proposal, the proposal on its face seems more like an evaluation or ruling than a traditionally bargained-for settlement.
Some “Rules” for the Mediator’s Proposal?
1. The Parties Must Jointly Agree to the Proposal. In keeping with the concept of self-determination, I believe the Mediator must approach a proposal with caution and only with informed consent. As an advocate, I have had mediators impose proposals spontaneously, and I did not like it. In one case, the Mediator declared his settlement proposal in a mid-mediation joint session. Neither party accepted the proposal, and all momentum was lost.
Although I favor continued negotiation even after a declined proposal, a proposal injected into a negotiation is entirely lacking in self-determination and is more likely to kill the mediation if rejected. In addition, the mediator may irreparably lose credibility in this situation. Once the mediator unilaterally inserts a proposal into the negotiations, a party being asked to accept a less favorable figure may [understandably] resent the mediator’s efforts to push them beyond the number the mediator had recommended minutes before.
2. The Mediator Should Explain the Methodology. I have a particular method to a proposal that I explain to the parties. In essence, it is a figure within a range of a reasonable settlement that I believe will be equally attractive/equally challenging to both sides. I often describe it as a point of equal pain and a number that I hope is within a “zone of temptation” for both parties. This is more alchemy than science, and as much feel as it is calculation. It is also, of course, fallible, and imperfect.
3. The Proposal Should be Shared Simultaneously. I usually present my proposal in a joint session and then close the mediation for the day. By presenting it jointly, the mediator knows that both parties will be the recipient of precisely identically-worded proposals – right down to the inflections. It is not uncommon for participants to have questions about the proposal, and answering all questions in a joint session prevents misunderstandings. Bringing the parties together also has some symbolic cache and serves as a fitting bookend to the joint session that began the mediation.
4. The Mediator Should Encourage Communication. Very often the parties interpret the Mediator’s Proposal as if a gag order to which the parties have no resource of refuge other than a yay or nay. It need not be so. There is absolutely no reason for the parties to suspend communications while they consider the proposal. If they confer and agree to a settlement – adopting the proposal or not – self-determination has alas won the day, and the proposal has likely served as a catalyst to the settlement.
5. The parties must Consider the Proposal Over Time. The mediator should ask the parties to quietly listen to, but not respond to, the proposal when it is delivered. A Mediator’s proposal is intended to allow time for reflection. A party declining it on the spot, or openly responding negatively, undermines the temporal aspect of the process. The idea is for both sides to reflect on the proposal and let the lure of closure work its magic.
More on Proposals: Perks, Peeves, and Process
Blind Results? A common approach to mediation proposals is that a party declining the proposal will not know what position the other side took. While this has some appeal on its face, it can create the impression that the rejected proposal is the final word. I doubt the party declining the proposal loses much sleep wondering what the other side did, and it would be rather shortsighted for the Mediator to stop negotiations simply to keep one or both parties in the blind as to the other’s decision. There is life beyond the rejected proposal.
In two recent mediations that concluded with proposals, one party eventually accepted it, while the other declined. In one instance it was the plaintiff declining, and in the other, the defendant. In both mediations, I procured the consent of the accepting party to tell the declining party that the other had accepted. My hope was that the additional tangible of knowing that an agreement was “one yes away” might make the figure more tempting. Both cases settled at a figure incrementally close to the proposal, one with very little mediator intervention and the other with a lot of it. In both mediations, forging beyond the rejected proposal paid off with a settlement.
Timing and Subtext? In most cases, the Mediator’s proposal comes late in the day when things are at or near an impasse. Of course, there are exceptions. Why might a proposal, or more frequently, a request for a proposal come sooner? The answer may have more to do with the dynamics on one side of the negotiation. It may be that counsel needs the proposal to bring her client out of their current settlement comfort zone. A request for a proposal may signal a problem with client control, and maybe the mediator should explore this first. Some conferring with client and counsel may be preferable to ramming a proposal down the client’s throat.
Even when both parties request a Mediator’s proposal, the mediator still has a vote. Early in the mediation, with a large chasm to bridge, the mediator simply may not have enough information [and intuition] to formulate and issue a proposal. Alternatively, with the benefit of submissions, pre-mediation teleconferences, and the mediation itself, a mediator may have a very good idea for the parties’ settlement tolerances and believe that there is no proposal he/she could conjure that would settle the case then.
Query: Should the mediator offer a proposal in this situation? Perhaps not. The better solution might well be to simply close the mediation for the day and work with the parties to garner some additional movement from both sides. No proposal at all, is better than a proposal that will do nothing more than aggravate, alienate, and demoralize. If you are in an 11th hour quickie mediation, you may not have the flexibility to take a break and confer further. If you are a regular reader of my commentaries, you know I advocate a more thorough, holistic, and immersive mediation process.
The Mediator’s Proposal is but one of many mediators’ tools. It should not be foisted or bullied upon the parties. The parties should know how the Mediator formulates the proposal and should take time to consider it. Even if not initially appealing, time and the hope for closure can work wonders.
Of course, remember, we mediators are imperfect humans, not divine oracles. One or both parties may find the proposal really misses the mark. Settling above or below a proposal is a valid, self-determined settlement that should be pursued and embraced; don’t allow a declined proposal to be a stop sign, and, if you are the party accepting a proposal declined by your opposite number, don’t use your acceptance as a presumption of reasonableness that precludes further negotiation. Continue to look, listen, and apply all of your mediation advocacy skills to try and reach a good faith settlement.
Good luck, and keep negotiating!
Rick Alimonti, October 2021