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?
There are no definitive answers to these questions, each mediation presents different considerations in fashioning the proposal. The questions only serve to provide a series of issues that a mediator should consider in making the proposal. In the end, the mediator’s gut feeling of what to propose is probably the best source for choosing the right amount to propose. The proposed number should be one that the mediator believes will be accepted, and not one that reflects the mediator’s evaluation of the merits of the case. The parties have already negotiated a range of how they value the case. The mediator’s proposal should reflect the parties negotiated valuation, not the mediator’s opinion based on a merits based evaluation.
Another consideration is how long the mediator’s proposal should remain open for consideration and acceptance. What have the parties said on the subject? Should it only be available until the end of the mediation session? A day? A week? Again, the circumstances of each mediation will dictate the answer. If all the decision-makers are present with the authority to settle the case, then perhaps the proposal should remain open only until the end of the mediation itself. Striking while the iron is hot is an important aspect of the mediation session. Does one party or the other need to discuss the mediator’s proposal with their supervisor or claims committee? Is a cooling off period a good idea in terms of allowing emotion to subside and rational thought to prevail. Again, these are only some of the many factors to be considered in connection with suggesting how long the proposal should be available for acceptance or rejection.
The mediator’s proposal is the most powerful impasse busting technique. It should be used with care and caution as it is likely to have a lasting effect on the dispute if it is not accepted.