Mediator Settlement Recommendations - Be Careful What You Ask For!

NAM (National Arbitration and Mediation)
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NAM (National Arbitration and Mediation)

During the course of negotiations, it is very common for one or more of the parties to ask a Mediator, “So, what do you think the case is worth?” This Mediator has a consistent response to that often-heard inquiry, “The case is worth what it settles for.” Although that response may, at first, seem a bit glib, the inquiring party is informed that despite what may have been conveyed through the parties’ submissions, communicated via opening statements, and even discussed in caucus, the fact remains that a Mediator does not know all of the factors that may influence the parties in their settlement evaluation and approach to negotiations. Perhaps a litigant is willing to discount a claim to clear the way for a sale of the company? Or a key witness is no longer available – information not yet known to the other side? Or perhaps damaging documents have been uncovered which will need to be produced if the case is not resolved at the end of the Mediation session?

Even in the absence of such dramatic outside influences, the experience of this Mediator is that once such an opinion on settlement value is expressed, and despite it having been specifically sought, one side or the other then seizes on that opinion and hangs on to it tenaciously because it most closely aligns to their narrative, agenda and goals. When that occurs, it can spell the end for the Mediation – with one side perceiving vindication – and the other rejection. In short, nothing good comes of it.

Now, that is not to say that there is not a role for a Mediator’s recommendation under any circumstances. If the parties are at an absolute impasse, and every other tool available to the Mediator has been tried, a Mediator’s settlement recommendation in the form of a specific figure or settlement range can be employed as a last ditch effort – the Mediation equivalent to a “Hail Mary” pass to the end zone as the clock is running down.

Often, the approach is to present a figure (or settlement bracket) to the parties privately, with the indication that they need to respond to the Mediator with a simple “yes” or “no” within a set number of days and, unless both sides say “yes”, neither will know of the other’s response. Even here, though, the number (or settlement range) proposed should not represent what the Mediator personally believes the case is “worth”; it should be a figure/range at which the Mediator believes the case may resolve, taking into account everything he or she has learned through the Mediation process. For that, in the end, is what the Mediator was retained to do – assist the parties in achieving resolution, not to communicate personal views that may work counter to that goal.

As a result, while this Mediator will defer on answering the question, “What do you think the case is worth?”, this Mediator will always respond to the inquiry, “What do you believe the case can settle for?”

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NAM (National Arbitration and Mediation)
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