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Victoria Pynchon

As the co-founder of She Negotiates Consulting and Training, I offer my services as a keynote speaker, trainer and consultant....

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She Negotiates

She Negotiates

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Mediators' Proposals: the Good, the Bad and the Ugly

At the close of the year, our good friend John DeGroote at Settlement Perspectives asked whether mediators' proposals had lost their utility.  Now that parties "know the mediator's proposal is coming," he wrote,

savvy negotiators angle for an advantageous impasse rather than a settlement. Compromise is no longer the goal of the mediation exercise; instead it becomes a play to the “neutral,” whose power to craft the mediation proposal will make her the real decisionmaker:

  • In cases where the mediator’s proposal will be based on who will pay what, the parties — or worse yet, one party — will spend valuable time and effort constructing an impasse when, in the absence of a mediator’s proposal as a fallback, he might have actually achieved a compromise settlement; or

  • In cases where the mediator’s proposal will be based on the value of the case, no one has an incentive to be candid with the mediator — so positions become more important than interests; or

  • In cases where the parties aren’t sure what will drive the mediator’s proposal, they dig into their positions and hope for impasse — with the most likely result being a mediator’s proposal predicated on those positions.

Just yesterday, a prominent local IP litigator, trial lawyer and deal-maker Robert J. Rose of Sheldon Mak Rose & Anderson graced the IP ADR Blog with a guest post on the utility of mediators' proposals here.  As Rose notes:

A reluctant plaintiff will make a large jump if the money is really “on the table.”  Defendants will come up with money they otherwise deny having, if it means that the case is really over.  It also eliminates reactive devaluation.

For those who skipped social psychology in college, reactive devaluation is what every lawyer is taught in the first year of practice, if not earlier.  "If the other side wants it," said my first mentor, "you don't, even if it seems like a good idea to you."  With that admonition ringing in the ears of every litigator, the need for mediators is obvious.  Given the dangers cited by DeGroote, however, the mediator's proposal may now be simply another way to "game" the mediator. 

I have two short stories to illustrate the reason I re-direct the parties to bracketing when they ask me to make a mediator's proposal. But first, let me explain that I am one of those mediators who used my "proposal" option to put a number on the table I thought both parties would accept even though it would be a stretch for both of them.  I usually tested these assumptions in separate caucuses by asking each side "if they came down to $X would you come up to $Y."  When the numbers didn't overlap, I'd gauge how much pain there might be for both parties to bridge the gap, along with other entirely subjective opinions such as:

  • how invested each side was in walking away with a settlement that day
  • how firm each side was in their assertion that they would not go below or above a certain number
  • whether either attorney needed help in bringing a little more reality to their clients before the parties would be ready to accept a proposal by the mediator; and,
  • how much "street cred" I'd developed with the parties personally so that they'd accept my estimate of the settlement price-point even if they wouldn't accept their own attorney's advice /*

The first time I felt manipulated into making a mediator's proposal that wasn't the best both parties could do occurred at the close of a particularly fractious commercial mediation. In the presumed Zone of Potential Agreement , my proposal was high on the side of the Plaintiff because I felt that the defendant had more "give" than did Plaintiff's counsel. 

I made my proposal and both sides accepted.  When I walked into the defense caucus to tell counsel that he had a deal, however, I was met with a burst of laughter, the clapping of hands and the following statement:  "I was prepared to take less; that's a great deal.  Thanks so much."

Everyone Lies to the Mediator

That was the hardest lesson I'd had to date in the truism that EVERYONE lies to the mediator.  You do not get to lie to the mediator twice, however, so I caution anyone who's feeling that she put one over on the mediator either to keep it to herself or never to hire that mediator again.

Still, I took a lesson from the attorney's merriment.  I realized immediately that he was not the only, nor the first, attorney to manipulate me.   He was simply the only one to let me know it.  I don't like being manipulated.  But that's what litigators are trained to do.  We call it "persuasion."  Still, I didn't like the look of my mediator's finger prints on that settlement, one that now appeared unduly influenced by my credulity.  

So that's reason no. 1 -- an extremely strong reason no. 1 - why I don't' like to make mediator's proposals and why counsel might ask themselves whether they want to continue asking for them.

"If We'd Wanted a Third Party to Decide, We Would Have Arbitrated This Case"

The quote above is from an attorney who represented one of the parties in the largest and most sophisticated commercial case I've mediated to date. We were at the end of day two and the parties -- who had traveled great distances to meet in a neutral city -- were nowhere near a landing point.  I was a sufficiently experienced mediator to land the case, but new enough to feel as if I'd run out of options when I suggested making a mediator's proposal.  

"I didn't hire you to have a third party make my decision for me," said counsel.  "If you want to get the parties closer together, why don't you suggest a bracket?" (for a explanation of bracketing, see my colleague Ralph Williams' article Introducing Deal Points - the Basics.)

I'd used brackets as a means of testing the parties' true distance before that day ("if he went to $X would you come down to $Y?") but I'd never made a mediator's proposal that was a bracket, i.e., "I suggest that the defendant put $X on the table if plaintiff will reduce its demand to $Y."

Although we didn't settle the case that day with a bracket (it took four full months of follow-up telephone negotiations to do that) I took counsel's point to heart.  The parties don't hire me to make a decision for them.  They're much happier when they get to make the decision themselves.  Even though the parties do decide whether to accept the mediator's proposal, it hasn't come to them as the result of their own hard work.  That being the case, the agreement reached is far less durable (subject to failure based upon nit-picking deal points after the agreement has been reached in principle) and far less satisfying than one achieved without the mediator's thumb on the scale.

I decided to stop making mediators' proposals more than two years ago.  In all that time, however, I've never refused to make one.  Rather, I've suggested alternative ways of achieving resolution, at least one of more of which settled the case in every case where the parties asked for a mediator's proposal.  

I'd like to hear thoughts on these points -- manipulation and party satisfaction -- from my litigator readers as well as my mediator readers.

More mediator thoughts on mediator proposals here:  The Mediator's Proposal at Mediation Meditations.

________________

*  I say this with the following caveat:  I would never attempt to influence clients to do something other than what their attorneys advise.  From time to time, however, the attorney needs to make the mediator the "bad cop" in the negotiation so that the client will not feel as if the attorney is no longer fighting for his interests.  I only play "bad cop" with the attorney's advice and consent.  My job is to get the settlement concluded making the attorneys look good, not bad.

Comments (5)

Read through and enter the discussion by using the form at the end
Peter - July 13, 2009 9:10 PM

Victoria, as an experienced mediator, I never suggest a mediator proposal to the parties. To me, that is my own admission of defeat. Moreover, if as you rightly suggest, parties even game the mediator, our job is to never give up and to keep the settlement discussions and ideas moving in such a way that, sooner or later, the parties have nowhere to hide and a settlement just happens. True, I have had parties ask me to give them my suggestion for settlement terms - and I have done so - but I caution them that, from my prespective, that is the point of no return. From that point onward, it will be difficult for one or both of them to view me as a neutral and, the more discussion and debate we have over my proposal, the more I am forced into the role of defending it. Bottom line, I view mediator proposals as the absolute last resort.

That is not to say, however, that I don't occasionally give the parties tools to use to bridge the final gap in terms. In that circumstance, I am not giving them the final terms but suggesting a process they can use to achieve them on their own.

Peter

Sandra C. Upchurch, Mediation Counse, Upchurch Watson White and Max Mediation Group - July 14, 2009 2:07 PM

I do not endorse mediator proposals either. What is the idea of negotiation, communication and conflict resolution if the neutral mediator gets to add in his/her two cents worth and thereby change the entire landscape with yet another party's perceptions, biases, etc... I got "gamed" once and ended up relaying to one party's attorney in private my view of the value of the case - to my surprise the case settled at that number but that was far from my intention and I was uncomfortable with my role in the outcome. The attorney relayed that figure to the client, the client respected me and my thoughts served as confirmation of what he had been told by his attorney. It all worked out but I left wishing I had more diplomatically addressed the "What do you think this case is worth?" question.

Vickie - July 14, 2009 3:03 PM

Thanks for dropping by to comment Peter and Sandra. As Sandra notes, I too have regretted giving the parties my own opinion of the value of the case. You can never escape it and it does sour at least one side's view of your neutrality and tends to put the side who favors the evaluation to get his or her feet stuck in stone. The longer I practice, the better I am at asking questions and re-directing the parties back to what their view is after a little reality-testing on both sides. After all, we do not see evidence nor hear sworn testimony. I am a negotiation facilitator, not a judge.

Joe Markowitz - July 14, 2009 9:06 PM

Thanks for articulating some excellent reasons for being uncomfortable with mediator's proposals. I don't like them, either when I'm representing a party in a mediation or when I'm acting as the mediator.

When representing a party, I have found that the mediator's proposal can backfire because it leaves you no more room to negotiate. So if the proposal is for a number different from what your side or the other side will accept, you then have to undercut the mediator to settle the case.

When acting as a mediator, I usually resist making a proposal even when the parties ask me to. I am more comfortable telling them the range that I think the case could settle at.

My latest thoughts on resolving impasse are at http://www.mediate-la.com/2009/07/dynamics-of-impasse.html

John DeGroote - July 18, 2009 3:20 PM

Vickie--

A great post on mediator's proposals -- thank you for further exploring this important topic.

I was interested to hear about your personal experiences with mediator's proposals as a settlement tool. In one instance you were manipulated by someone who wanted a mediator's proposal, and in another case it appears you were criticized for offering one. But you offered a mediator's proposal in each of these cases for a reason -- lawyers and their clients ask for them. And lawyers and their clients ask for them because they work. Not always, but they work. As you mentioned, I have my issues with mediator's proposals, but that doesn't mean that I won't, or don't, ask for them.

Near the end of your post you say that, in lieu of mediator's proposals in the recent past, you have "suggested alternative ways of achieving resolution, at least one or more of which settled the case in every case where the parties asked for a mediator's proposal." At the risk of asking for the special sauce, I sure hope you'll tell us what some of those alternative ways have been.

Vickie, you really add to the conversation on some important topics. Thank you.

John DeGroote

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