There comes a time in every mediation when negotiations reach an impasse. Negotiations can stall at the outset of a mediation when the parties are unwilling to bargain with one another either because “it is the other side’s turn,” “we won’t respond to that outrageous demand” or “we won’t accept that insulting offer.” Later in…
It is a common understanding among trial lawyers that decisions are made emotionally and not rationally. We are always looking for the emotional hook on which to hang the case and sway a jury to see the case through that emotional prism. Now science is teaching us that decision-making is actually physical. In a recent…
We have all encountered the spiteful litigant. Maybe it’s the husband in a divorce who says that he is going to Las Vegas and putting the marital estate on red or black at the roulette wheel. If he wins he will split it with his ex; if he loses, neither of them get anything. Or perhaps it’s a partner in a dispute that says that he would rather the business fail then have to share its value with his soon to be ex-partner; or a litigant that states that he would rather drive the defendant into bankruptcy even if it means that he would not recover for his injuries.
How does one deal with spite in the context of a mediation? Recent scientific studies of spite provide the answer. Spite is defined as the urge to punish, hurt or humiliate another, even when one gains no obvious benefit and may well pay the cost. New research summarized in a recent New York Times article concludes that spite is both a vice and a virtue that may be linked. Not surprisingly, in one survey conducted by David K. Marcus, a psychologist at Washington State University, spitefulness generally cohabited with traits like callousness, Machiavellianism and poor self-esteem. Spite is not associated with agreeableness, conscientiousness or guilt.
The end of the day is nearing and the mediation has ground to a halt. The parties have narrowed the gap between them, but cannot close it. Is it time to suggest a mediator’s proposal? Does a proposed settlement amount coming from the mediator have a reasonable likelihood of acceptance? Are the parties interested in having the mediator make a proposal? If the answer to these questions is yes, then it is time to employ the ultimate impasse busting technique, the mediator’s proposal.
But what amount should the mediator propose? Splitting the difference between the last demand and offer has undoubtedly been discussed with the parties and rejected. Otherwise, a mediator’s proposal would not be necessary. How does the mediator avoid the appearance of favoring one side over the other when the contemplated mediator’s proposal is closer to one party’s last position than the other’s? Should the mediator have a reasonable degree of confidence that the plaintiff will accept the proposed amount?Should the mediator have a reasonable degree of confidence that the defendant will pay the proposed amount? Is one of these factors more important than the other?
The negotiation has ground to a halt. The parties have been at it all day and they are frustrated that there remains a big distance between them. The negotiations have proceeded in a traditional incremental way. Plaintiff’s last number is over $1,000,000 and the defendant is stuck at $100,000. At the rate things are going, it would take days to bring them into a zone of agreement. Again, this is an opportunity for the mediator to strut her stuff. Possible techniques to break the logjam include a consideration of ranges. For example, the mediator might suggest the following: Would you, defendant, settle the case in the low six figures meaning between $100,000 and $300,000 if the plaintiff would accept a number in the high 6 figures, $700,000 to $900,000?
If the parties do not like the mediator’s numbers, then the discussion turns to what numbers they would consider. This is an invaluable discussion from the mediator’s perspective. It gives the mediator information about where the parties are willing to settle and provides a means to determine whether and at what ultimate figure the case can settle. If the parties agree to the suggested range, the mediation has taken a big step forward toward settlement and compromise can ultimately be reached.
The mediation has gone on for hours. The parties have negotiated slowly and methodically, but remain far apart. The negotiations are not in the “zone of agreement,” the mediator’s term for closing in on a settlement amount. The negotiations have reached an impasse. Governing Impasse occurs to one degree or another in nearly every mediation. …
A famous trial lawyer welcomed his junior partner back from a hard fought trial. The lawyer congratulated his mentee on her win at trial. The junior partner responded that, “you must be mistaken, I lost at trial. The jury returned a verdict against our client.” The senior partner responded, “But wasn’t the verdict less than the plaintiff’s last settlement demand?” “Yes,” replied the junior partner. “Then you won!” said the senior partner, “It is all about how you define win!”
After the evaluative method has been exhausted, and the parties have narrowed the gap between them, the question on the table is what does it take to settle the case. Should the party with the stronger case, make a final effort to bridge the gap? Is there a settlement premium that should be paid or accepted?
I believe that there is a settlement premium that comes into play and should be seriously considered for a number of very important reasons.
1. The evaluation approach is not science. Reasonable minds can differ. There is the old adage that even the best case has no better than 80/20 odds attached to it and no one could quibble with the odds dropping to 70/30 or even 60/40;
In an informal survey of mediators, I have found that our collective experience is universal –the initial demand is extraordinarily high, bears no relationship whatsoever to the verdict potential of the case and is usually counterproductive to the mediation process. Since the initial demand is usually made only after lengthy discussion of the strengths and weaknesses of the case and the range of recoverable damages, it is even more perplexing that it bears no relationship to the recoverable damages in the case.