Commentary: The Mediator's Offer--How Much Power Should the Mediator Use?
Set out below are my comments on one mediator's tool, the "mediator's offer" or "mediator's proposal." I do use this technique in cases in which the parties are at impasse or close to it.
. . . [E]ven though mediators lack the formal power to impose an outcome on the parties, they are still powerful professionals who use a variety of powers in the exercise of their professional role, and have considerable influence on the parties, the process, and its outcome. Omer Shapira, Exploring the Concept of Power in Mediation: Mediators’ Sources of Power and Influence Tactics, 24 Ohio St. J. on Disp. Resol. 535, 568 (2009).
. . . [A] mediator’s active participation, active insertion of himself in the conflict, and active guidance of the parties toward agreement. . . is critical to overcoming psychological impediments to settlement . . . . Simply put, a mediator who limits his involvement to pure facilitation reduces the number of tools at his disposal that can help the disputants to identify and agree on a set of settlement terms that are more desirable to both parties than adjudication, with its attendant costs and risks. Russell Korobkin, Psychological Impediments to Mediation Success: Theory and Practice, 21 Ohio St. J. on Disp, Resol. 281, 327 (2006)
The Mediator’s Offer—What is it?
If negotiations are at impasse, or close to it, a mediator might talk separately with each side and obtain permission to suggest settlement terms. If permission is obtained, the discussion with each side might be paraphrased as follows:
It appears that each side is firm in its position or close to it.
But, before the parties incur the time, effort, energy, stress, expense, inconvenience of further litigation—and before the parties subject themselves to the uncertainly of result inherent in most legal actions—I suggest that it might be in the best interests of each side to stop for a moment to make a further effort at settlement.
Can this case be settled for $_______________________?
This is not a prediction of how the case will come out in court/arbitration—no one knows. And it is not my view of how it should come out if I were the judge, arbitrator, or a member of the jury—I’m none of the foregoing, and have not heard all the evidence.
This is a number that may be unacceptable to each side. If so, I suggest that a mutually unacceptable number is often the basis for a fair settlement.
I am suggesting that each side respond to this proposal to me only, confidentially. I will reveal an acceptance only if mutual. Thus, you give nothing away to the other side concerning your bargaining position by saying, “Yes,” albeit reluctantly. I will not tell the other side about your “Yes,” unless it says “Yes,” also.
The Mediator’s Offer – A Common Practice among Lawyer Mediators? A Proper Exercise of Power?
In an unscientific survey by the author among some of the leading lawyer mediators in Oregon, those who responded gave the range of answers set out below to the question, “In about what percentage of your mediations, if at all, do you find that you eventually make your own specific ‘mediator’s offer’ or suggested settlement”?
The respondents were asked to focus on “the general run of commercial, bodily injury, professional liability, construction, non-union employment, estate dispute, business divorces, and real estate cases, in which each side has legal counsel or an insurance adjuster participating in the mediation.” The respondents were asked to exclude family law and public policy cases.
Results?-- A wide range of practice, from zero, to 50% to 75%.
I'd be interested in comments from lawyers who have experienced the process in mediations in which they have represented clients. By suggesting settlement terms, does the mediator assume too much power? Do counsel and the parties act differently during the mediation (perhaps by being less than candid about potential concerns in a case), if they expect the procedure?
On the other hand, the process can increase the chances of settlement for at least two reasons: First, the parties "save face," by accepting terms that come from the mediator rather than from other parties. Second, the mediator assures the parties that (the usually reluctant) "Yes" responses will be kept confidential unless unanimous, so parties avoid the risk of giving away their bargaining positions. I find that the process is usually effective in achieving settlements in mediations that would otherwise end in "no deal."
In suggesting settlement terms, I try to make clear that I am not offering an evaluation of the case, nor predicting what the litigation result would be. Rather, I am proposing terms that require each party to "reach," and possibly make a deal. But do parties understand this distinction?
I respect the parties' right of self-determination, but I do push hard for settlement. I try to be a "closer." In limiting my mediation practice to cases in which each side is represented by legal counsel, I usually leave it to the parties and their lawyers to decide when to suspend or end the process. This aggressive approach may not be right for all parties and all cases, but may be the right choice for many.
What do lawyers think?
Thanks to the following mediators who responded to this informal survey and provided helpful information about their use of the mediator’s offer procedure: John Barker, Jeff Batchelor, Prof. Richard Birke, Chuck Corrigan, Bill Crow, Susan Hammer, Sam Imperati, Josh Kadish, Jim Knoll, Roger Lenneberg, Eric Lindauer, Ronald Rhodes, Mike Scott, Ingrid Slezak, Frank Susak, Hon. Jake Tanzer, and Paul Xochihua