In mediation, it is always a delicate question how much the mediator should try to shape an agreement, or leave it entirely to the parties.
This is especially true when the parties the parties are very close to agreement and reach an impasse. I think most mediators would agree that the impasse can often be broken by challenging the parties’ assumptions – and their assessments of positions and interests – that lead them to say: “This far and no further.”
Maybe one side feels that it has been making more concessions than the other. And, usually, each side believes its concessions are more “real” or more valuable than the other’s.
Maybe one or both have simply run out of negotiating room and feel there’s nothing more to give.
Or maybe it’s the end of a long day (or days) and they’re just tired.
Often, all it takes is another small step by one side or the other to renew movement to an agreement. Mediators have a lot of tools to encourage parties to take that step.
But if neither is willing move further, should the mediator make a proposal to break the impasse? If so how?
A recent mediation reminded me that mediator proposals can often lead to a settlement, but they need to be handled with care. Here are some thoughts on three ways to do it.
“What If” Proposals
The mediator can float a trial balloon to see if the parties are willing to take a further step towards a deal:
“If I can convince them to do [X] would you be willing to consider [Y]?”
The mediator puts the same question to the other party in reverse.
The suggestion may be based on something one or both parties have mentioned in private caucus, but have not been willing to offer formally. They may fear that the offer would not be accepted. Or, even worse, that it would be accepted, but not reciprocated.
By having the mediator float the idea, it is not coming from the other side – at least, not officially – and the mediator is not asking for acceptance or rejection, just consideration.
The important thing is that it’s all conditional. Neither side loses any face if the other side refuses.
The parties also have flexibility to modify the proposal – “No, we can’t do [Y], but we’d be willing to do [Z].” – though that complicates the mediator’s task, if she already has a tentative commitment from the other party.
But even that much discussion may break the impasse and signal both parties’ willingness to continue negotiating.
If they are still unable to reach agreement, the mediator may want to suggest…
Blind Final Offers
When the parties are close, but unwilling to move any further, the mediator may ask each of them to submit a final offer to her in secret.
If the offers match, they have a deal. If not, neither will know how much the other was willing to offer.
There are some possible complications.
It’s fairly simple if the only issue still to be settled is a number – how much one will pay the other – and all of the other terms have been settled and agreed by both sides.
If not, both offers must contain all of the same terms and conditions. The more terms involved, the more risk of a mis-match between the offers. If one side includes something that hasn’t been discussed, the mediator will have to go back to the parties for clarification, or to one asking for a change to address the new term. This creates a big risk that the whole thing falls apart.
The mediator also needs to agree with both parties what happens if the offers overlap. For example, the plaintiff offers to accept less money than the defendant offers to pay.
In some cases, there may be good reasons for both parties to agree that either the higher or lower amount will be chosen. For example, in the interest of achieving a settlement and an immediate payment, a plaintiff may be willing to guarantee that the defendant will not pay more than the amount the plaintiff was willing to accept. That may be the only way to get a reluctant defendant to put their best offer on the table – or participate in a final offer at all.
Likewise, there may be situations where the defendant is more motivated to settle and is willing to make an equivalent offer to the plaintiff.
In most cases, though, the simplest thing may be to agree that the mediator will split the difference and that will be the final number. Both parties may see that as the most fair result. They should be glad that the agreement is better than the one they were willing to make
But after the fact, they may regret offering too much or leaving money on the table. By then it’s too late. The deal is done.
If there is a fear that someone will back out at that point, they can go so far as to sign the minutes of settlement with the payment amount left blank. The mediator will fill in the blank if the final offers meet the conditions that have been set.
If the parties aren’t willing to make blind offers, they may be willing to try…
The mediator, with the agreement of the parties, may propose a final settlement which can either be accepted – without change – or rejected by both parties. The responses are given to the mediator in confidence. If either one rejects it, they will not know whether the other would have accepted.
This can work if the parties are very close to an agreement and the mediator believes that there is a settlement both might accept. This is most often a question of money, but it can be used for other terms as well.
Throughout the mediation, the parties will have signalled – explicitly or implicitly – where they expect the matter to settle. Of course, each side thinks their position is reasonable; the other side’s is not. They over-estimate the strengths and underestimate the weaknesses of their positions (and vice versa when asked about the strengths and weaknesses on the other side). The mediator’s job is to challenge those expectations and help parties re-evaluate them.
In the course of those discussions – usually in separate, private caucus sessions – the mediator may form an idea of the range in which the parties are likely to settle. This may happen early on, but it will take the parties themselves a lot longer to get there.
But once they get very close to agreement, the process is likely to stall. The parties may still be thinking about their initial expectations, and how far they have moved, not about how small the gap has become. It is at that point, and not before, that a mediator proposal may break the deadlock.
The mediator must be wary about suggesting this too soon. This is the last tool in the mediator’s toolbox. If it fails, there is probably nothing else left to try.
The mediator must also be careful about framing the proposal.
If the idea has been suggested by one of the parties, I think the mediator should be candid about that with the other party. She might simply say it’s been suggested and she thinks it’s worth a try, if the other party has nothing else to suggest.
The mediator should make the proposal only if neither party has a strong objection and there’s a realistic prospect that it could be accepted by both parties.
And I’d be very reluctant to say that any proposal is what I think the settlement ought to be, based on what I’ve heard. I would simply say that I think the proposed amount is likely the best you are going to do today. At this time, it’s probably the most the other side is willing to pay – or the least they are willing to accept, depending who I’m talking to. And it’s a number that I think is worth considering. It’s up to you…
I would avoid any discussion about the merits of the proposal, the reasons for that number versus some other number. At this point, the actual number is rather arbitrary, relative to the most recent offers on the table. It’s a number the mediator thinks both sides might be willing to accept.
And one that both sides may agree is be better than the alternative: not settling and continuing the dispute.
Yes or no?