Fair Resolution Of Business Disputes Is Possible

The Mediator’s “Proposal”: Is it worth it?

It is certainly not that uncommon to be in a mediation where one side feels that it has moved to its “lowest number” while the other side has reached its “highest number” and the gap cannot be overcome. It is at a juncture like this where mediators can choose to insert themselves into the negotiation process by choosing to make a mediator’s proposal or offer that the mediator believes will bridge the gap to help the case settle.

But by taking this action the mediator, instead of staying out of the direct negotiation of terms, places itself directly into the process. For many, an uncomfortable place to be as a third-party impartial participant. But, is it worth it?

Some would say yes, so long as the method for making the mediator’s proposal is handled carefully and skillfully. First, the proposal would only be something that would be used at the late stage of a mediation, where the parties are believed to have each reached their limits of settlement authority or willingness to move further. Second, the mediator must address their proposal in full confidentially to each party, making sure not to disclose the response by either party unless both sides are agreeable. In other words, the mediator will not disclose that one party said “yes” until both sides say “yes”. That way if one party accepts and the other does not, the party that may have accepted does not lose their settlement standing when it may come to future negotiations. Third, the mediator must carefully articulate that the proposal is not meant to be an analysis of the relative merit or weakness of a particular case but merely an effort to help bridge the gap in place in the current settlement discussion. This will help avoid the misunderstanding that the mediator is expressing the worth of the case as compared to its effort to help the parties reach a settlement on a disputed matter.

Certainly, the decision to utilize a mediator’s proposal must be left to the mediator’s analysis of the statements and behavior observed during the specific mediation itself. Obviously, there are times when making such a proposal may be more disadvantageous than other times. But if the mediator truly believes that their effort to create such an offer might be the missing piece toward settlement, there may be no reason to hesitate.

As to the question of whether a mediator’s proposal imposes an unfair influence on the parties to the mediation, the answer may depend on how the mediator’s proposal is presented and further whether both sides are represented by counsel. A mediator’s proposal may not be appropriate if one party is unrepresented. A mediator’s proposal may also not be warranted if the respective parties are so far apart that the offer may be considered an insult to one side or demeaning to the other.

As has been often said, a good mediator carries a large toolbox of strategies and approaches to be used during a mediation to assist the adverse parties in resolving their dispute. Considering a mediator’s proposal is just one more of those tools that may be appropriate to use when the situation calls for it.

For thirty years, Scott Zucker has acted as outside legal counsel to a variety of privately held and publicly traded businesses involved in multiple industries. His legal services have ranged from employment, real estate, construction and corporate consulting to representation of companies in the litigation of their financial and business disputes. Scott’s goal is to utilize his legal and business experience to foster the use of Alternative Dispute Resolution to help parties reach resolutions without the time, effort and cost of court litigation. Scott can be reached at [email protected] or 404-364-4626