By Steven G. Mehta

Recently the topic of the mediator’s proposal came up in a topic of conversation.  Several people had different views on how the proposal should be made, if at all.  I decided that this might be a nice topic for a Mediation Roundtable.  The format of the roundtable is that I have given each mediator 5 questions.  Each mediator’s answer will be in its original form, unedited, and together.  This will provide you with several different views on one topic in one place.  As such, I am presenting to you the topic of Mediator’s Proposal Roundtable:  The Good, Bad and Ugly.

I have been honored by the participation of several prominent mediators in the field.  The mediators are listed in no particular order:

Lee Jay Berman, President of the American Institute of Mediation. (To learn more about Lee Jay on video, click here)

Richard Webb, the Principal of Healthcare Neutral, LLC

Don Philbin, an exceptional business mediator from Texas.

And, last, but certainly not least,

Jeff Thompson, N.Y. city police officer, mediator, and famous blogger.  (To see a video on Jeff, Click Here)

1.  Do you think the mediator’s proposal has value in today’s modern mediation environment?  and why?

Jeff:  Sure it has value.  When looking through the lens of “it’s their (the party’s) process, if they want a proposal we should give it to them.”  Of course, me being me, I do not think it is that simple.  We are mediators and have to make sure we do not cross certain lines.  Main pillars of mediation include, I believe, confidentiality, informality, and self-determination.  It is in self-determination where the mediator’s proposal enters the colorful area (think sort of like the ‘grey area’ but why not look at things in beautiful colors instead?!?) of possibly crossing the line and is it still mediation?

To be short and simple, I think the mediator’s proposal is like caucusing.  It should not be relied on and be used in only certain circumstances- primarily when a stalemate endures and has the potential of breaking apart the mediation.   That is also if the mediator is comfortable with even using a proposal.  Some people, including me generally, feel it is should not be used.

For those that do use it, the ‘proposal’ I think should actually be used more sparingly than the caucus as well.  If it becomes a  frequent tool in the ‘mediator’s toolbox’ the fear I have is the parties become more dependent on the ‘proposal’ compared to generating their own options.

I think it is important also to question what your definition of the mediator’s proposal is.

I think there might be different versions floating around the ADR world.  Is it spontaneous or preplanned in the agreement to mediate?  Does the mediator write up his/her proposal before?  Is it in a sealed envelope lurking on the table the entire time as a reminder? Perhaps in the inner suit jacket pocket discreetly but ceremoniously tucked away to start the mediation off.

Lee Jay: Yes, I think any mediator technique that helps resolve a difficult case with entrenched parties has a place.  While I don’t typically use them, and caution against the over-use that some mediator practice, they are handy on rare occasion

Richard:  Yes, it has value, if used effectively to reach a settlement that would otherwise slip away.  Sometimes, parties or their counsel, despite their best efforts, cannot bring themselves to take the last step towards the
outcome that is staring them in the face. Sometimes they don’t want to “give in” or “lose.” Sometimes there is a strange reluctance to end the battle that has become such an important part of their lives. If the mediator can
help them make that final leap, that’s a good result, in my view.

Don:  Yes.  They can be effective impasse breakers late in the game.  But they can also be the right answer at the wrong time, which is the wrong answer.

2. Is the mediator’s proposal being overused or not used enough by mediators?

Richard:  I can’t say with any certainty, but my impression from my own legal practice and talking to lawyers is that it is being overused incorrectly. By this I mean the tendency of many mediators, particularly retired judges, to “size
up the case” and tell the parties “how this is going to come out in court.” Although I reject this approach as inconsistent with the true spirit of mediation, I must also admit that some cases are settled after this sort of
“mediator’s proposal” is offered. Other than this overuse, I believe mediator’s proposals are being made, but usually upon request of the parties.

Jeff: Well, (and I laugh as I type this), I don’t use it. Actually, from my recollection, I used it in an informal approach once.

In the particular situation, two parties were discussing the issue of a 5 figure sum of money and one party possibly owing the other the amount.  The two (along with my assistance of course!) narrowed it down to roughly $300 dollars difference.  As one party got up to leave, he/she said, “That’s it, we can’t work it out.  Jeff, thanks, it’s not your fault but I have to go.”

What I did was spur of the moment and asked the person to sit down.  My very brief comment included some stroking, a splash of reality testing and an unplanned mediator’s proposal.  I realized each did not want to give in so I drew (again) on a large piece of paper (by the way, the topic of including visuals is grounds for another whole discussion!) where each started, how far they each have come and how small the difference had become now.  I finally gasped, and said flat out, “Why don’t you both just split the last amount and each come $150 closer together?” After a further brief discussion, they decided… well the end does not matter, right?

Don:  Don’t know.  Since it risks impartiality and has other consequences, I leave it at the bottom of my toolbox.  I will use it, but don’t reach for that tool in round two.

Lee Jay:  It depends on the mediator.  I define the mediator’s proposal as the exact point in time where the mediator ran out of skills.  Some mediators will exhaust their entire toolbox by 1pm, others will continue to call upon skills and techniques until the wee hours of the night.  So, mediators who don’t read about mediation, who don’t take training courses or attend conferences to learn more skills tend to over-use the proposal because they just don’t have that many arrows in their quiver.  I see it also overused by mediators who think the process is all about them, rather than the parties and their lawyers.  Some mediators use it as a tool of self-importance in a way that says, “Here, I’ll resolve this for you.”

3.  What circumstances are necessary before you would consider making a mediator’s proposal?

Lee Jay: All efforts to reach a mutually agreeable resolution have failed, collaborative win-win negotiation is no longer possible, we’re just talking straight compromise and just about the money, and there is nothing that the mediator has left to do except put their own suggestion on the table.  Also, when lawyers have very difficult or proud clients, or insurance adjusters who need to go and get more authority, then the mediator’s proposal sometimes helps those clients (and lawyers) save face.  After all, when people say, “Why don’t you give us your proposal?” what they’re really saying is, “We want to move more, but we can’t find a way to do it through traditional negotiation, so we’ll move, but only to a number that you set.”  Sometimes, too, parties don’t want to give in anymore to the other party, but they will do so for the mediator or because the mediator says that they need to do so.

Jeff:  I think it is important in most cases, contrary to my approach mentioned above, to have the conversation with the parties during intake/prescreening.  Find out what their wants and expectations are.  If you come out of left field with the proposal, your good intentions could be like expecting to go for a stroll on Mount Wai-‘ale’ale and not expect to get wet!

Don:  Other impasse breakers have not worked and I am comfortable that the proposal will be viewed by all parties as a workable, if not perfect, solution.

Richard: I would offer a mediator’s proposal only upon the request of both parties, and after substantial efforts to resolve the dispute through mediation. I see it as a last step in the mediation process, a way to bridge a final
impasse, based upon the efforts and movement of the parties prior to that moment.  By its nature, the mediator’s proposal leaves the mediator with no place to go if it is not accepted by both parties.

4. Do you feel that the parties (or their counsel) are taking advantage of the mediator’s proposal process?

Jeff:  I have been asked frequently the question of, “What do I think,” and other similar questions all mediators experience.  I do not have the mediator’s proposal as part of my agreement forms and it is not brought up during intake so for me, it is tough to gauge if the party is really attempting to take advantage of me or the proposal as there is no formal proposal hanging from the chandelier.

Richard:  I know there is some thought that savvy counsel are using the mediator’s proposal to leverage their client’s position; that is, intentionally mediating towards impasse rather than towards settlement with the hope that
the mediator’s proposal will be more favorable than a negotiated outcome. This was the subject of John DeGroote’s post in his blog, Settlement Perspectives:
; to which I replied in my Healthcare Neutral ADR blog at: Unfortunately, I think many counsel looking for a mediator’s proposal are more lazy than savvy. They either don’t understand or are not willing to work at the mediation process as it is intended, and prefer to have some third party conform their client’s expectations to a final result.

Don:  They are under pressure to keep costs down and speeding up the process is one way to do that.

Lee Jay: Yes, I think it’s often one of two things, either it is conditioning from judges conducting settlement conferences that way that has “trained” lawyers that this is how it is done, or it is people who are averse to prolonged distributive bargaining (2-3 moves, and then they ask for the mediator’s proposal), and sometimes, that person is the mediator!

Sometimes, though, I think seasoned negotiators will play for the proposal. By that, I mean they will architect an impasse that is bracketed where they want it so that the mediator will make a proposal near the midpoint (as many mediators will do), and they will get their way. By way of illustration, if the plaintiff is at $200,000 and the defendant is at zero, the defendant may pretend to have topped out at $60,000 and see how far they can get the plaintiff to continue to reduce their demand with the hopes of setting up an impasse between $60,000 and $80,000 or $90,000, enabling them to set up a potential mediator’s proposal at $75,000 or $80,000. Plaintiffs do it too, stopping their declining demands at $135,000 or something in that ballpark to see if the defendant will come up to $100,000, setting up a mediator’s proposal at $115,000 or $120,000. This is the concern about medator’s proposals – that they can be manipulated. If we’re assuming that the mediator’s proposal is intended to pick a number (assuming all other terms have been agreed to) where the case is most likely to settle, rather than a number that represents the mediator’s perception of the “true value” of the case (like a non-binding arbitration), then we mediators leave ourselves open to being gamed by skilled actors, pretending they have run out of room to move and forcing our hand to pick a number.

5. Each mediator does things differently.  What do you think is the ideal way to introduce a mediator’s proposal into a negotiation?

Don:  Wait until the parties are close, other impasse breakers have failed, both parties want to get a deal, but neither wants to blink.  Use it as an extension of the “What if” testing – “if this case could settle for ____, would that work for you?”

Lee Jay: When the parties are absolutely stuck and they have both dug their heels in and have refused to move another inch, yet they’re counting on me to pull a rabit out of a hat to help them settle, then I generally pull the attorneys aside into a separate room or reconvene a joint session with everyone and tell them that it’s my impression that we are stuck, that nobody is willing to move any more and I’ll ask them what they want to do (usually reminding them that it is completely non-economic to go to trial over the small amount that separates them at this point). Generally, that’s when they ask or I finally suggest the concept of a mediator’s proposal. I then explain (usually just to the clients) how I do it – double blind, where neither gets to know the other’s answer unless they both say “yes”, and we discuss whether we’re going to do it right there on the spot, or whether we need to give people 24 or 48 hours to consider them and report back. I find that if we’re not going to collect their answers immediately, then giving people through a weekend is effective, so that the parties can go home, talk with spouses and others, and see the big picture perspective more clearly, in which case a $10,000 difference on a six-figure settlement takes its rightful place as minutia.

The dangers I see with mediators’ proposals, other than the manipulation described above, is that some mediators mis-use them by offering them too soon when the parties are too far apart and aren’t yet invested in them, or that mediators use them in most every case, where they become predictable, opening the mediator up to further manipulation.

Mediators’ proposals have a place and time, like every other tool that mediators use. And different mediators will use them at different times. It’s just important to remember when using a mediator’s proposal that the right answer at the wrong time is indeed the wrong answer.

Richard:  To me, the mediator’s proposal comes only upon request of both parties, when it is clear to the mediator that settlement will not occur otherwise. I differentiate this from a mediator’s brainstorming proposals and reality
testing, which can be used early and often, in that the mediator’s proposal carries with it the mediator’s sense of judgment and credibility. It is to be used sparingly.

Jeff:  As already mentioned above, perhaps the standard should be the proposal is discussed prior to the mediation.  Of course there are acceptations to the rule but I think that instead of it actually being a rule, it is more like a guide for the mediator.  Also, I think the idea of even bringing it up should depend on the type of case you might be mediating.  Would a mediator’s proposal be more likely in a case between two former partner attorneys compared to a mediation over a type of quality of life issue such as a noise dispute between neighbors?  Sure, I think so, but then again, using the analogy of everything is different shades of different colors, I think everyone will find out for themselves, and find their own ‘color’ and groove which is most comfortable for their mediation style.  One final thing I would add is I think one’s training affects their use of the mediator’s proposal as well as their background (i.e. an attorney or arbitrator).

Thank you all for your wonderful contribution to this topic.