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Two individuals going through a mediation with the guidance of a mediator. Mediator aids the process and aims to reduce trigger points.

Some Thoughts About Mediation: Part 4

What To Do At Impasse

Mediators must be able to apply different techniques when the parties are at impasse or near an impasse arising out of traditional (ping pong style) negotiations. If your mediator doesn’t suggest these, you should.

Brackets – The Range of Resolution

When I first started serving as a mediator years ago, I did not like using brackets because the parties and their counsel immediately focused on the mid-point of the proposed bracket, which, in part, defeats the purpose of using them. The real purpose of brackets is to inform the other party of the range within which you are willing to negotiate.

Bracketing is a type of high-low bargaining. In a recent mediation, where plaintiff originally demanded $2 million and defendant originally offered $100,000, the negotiations stalled after three rounds. Plaintiff then proposed a bracket with the high number of $1.7 million and a low number of $600,000. Defendant countered with a bracket of a high number of $600,000 and a low number of $300,000. The parties then returned to single number demands and offers, and the case was settled. Brackets accelerated the timing of the settlement. In more recent years, I have found brackets to be useful tool to speed up the negotiations, particularly when the parties or their counsel are becoming impatient.

A simple variation of this approach is when one or both parties ask the mediator to propose a bracket. Not surprisingly, this is referred to as a “mediator’s bracket.” In making such a proposal, the mediator should be guided primarily by the prior negotiations.

Mediator’s Number/Mediator’s Proposal – After All, You Picked Her/Him

This is usually used when traditional negotiations and/or brackets do not resolve the impasse. If this technique is used at the mediation, I usually propose only a settlement amount and refer to it as a “mediator’s number”. If it is used after the mediation, usually the next day, I communicate my proposed settlement amount and other terms by email and refer to it as a “mediator’s proposal.”[8]

In either situation, the mediator proposes a single number to resolve the case. The responses are kept confidential. If both sides accept the proposal, then the mediator informs both sides that there is a settlement. If one side accepts the proposal, and the other side rejects the proposal, the party that rejects is not told that the other party accepted. The party that accepted is told that the other party rejected, and both sides are told that no settlement has been reached. If both sides reject, the mediator simply tells both sides that no settlement has been reached.

Private Numbers[9] – I’ve Got a Secret

With this technique, both sides provide the mediator with their near final numbers. The mediator keeps them confidential and decides if the parties are within striking distance. If they are, the parties are told that they are within striking distance, and then typically the parties return to traditional ping pong negotiations.

If the parties are not within striking distance, then they are told that this is the case and that there are now several options. The one that is chosen is often a function of the length of time spent at the mediation. The most common one is a mediator’s proposal made the next day by email. The parties can also return to traditional negotiations; they can try a mediator’s number or they can adjourn for the day and let the negotiations “rest” to be continued another time either by phone or a second mediation session.

In this approach, the mediator usually determines what constitutes “striking distance”. A variation of this approach is to have the parties agree on what constitutes striking distance. The advantage here is that the parties have more control over the process. The disadvantage is that it removes the element of the mediator’s judgment, which is somewhat counter-intuitive because the parties picked the mediator to guide the process.

Mediation/Arbitration – ADR’s Split Personality

While there are too many forms of med/arb to cover in this article, this approach typically involves arbitration after mediation has not resulted in a settlement of the case. The arbitration sometimes is a full-blown traditional arbitration hearing that leads to an adjudicated decision by the arbitrator who can be, and often is, the same person who served as the mediator. Using the same person for both causes concern because the parties and their counsel worry that facts disclosed during the mediation, but not admitted into evidence during the arbitration, will be used by the arbitrator to decide the case. I suggest to you that this concern is overblown and can be solved simply by waiting 60 days to have the arbitration hearing after the mediation has been completed. By that time, most mediator/arbitrators will have forgotten what they have been told in the mediation and will not review their mediation file prior to or during the arbitration.

Arbitration/Mediation – Split Personality Revisited

This approach reverses the sequence of the previous one. After an arbitration hearing, the arbitrator prepares an award but does not disclose it to the parties. The parties then mediate their dispute, and if the mediation results in a settlement, the matter is concluded with an executed settlement agreement. If the mediation does not result in a settlement, the award is disclosed and is binding. This process provides more information to the mediator and the parties going into the mediation and obviously avoids the issue of the mediator using information learned in the mediation when deciding the arbitration. The primary disadvantage to this process is cost.

Arbitration/Mediation/Arbitration – Are You Kidding

This approach begins as an arbitration, and either at a break between hearing days or simply because of the arbitrator’s intuition, a mediation is conducted.[10] If the mediation does not result in a settlement, the arbitration is reconvened so that the hearing can be completed, and an award can be issued. If the mediation results in a settlement, the matter is concluded with an executed settlement agreement.

This blog post is part of David Schaefer’s peer-reviewed article, “Some Thoughts About Mediation,” published in the Litigation Counsel of America’s Litigation Commentary & Review. For more information or assistance regarding alternative dispute resolution, please reach out to request a consultation, call us at 216-696-1422, or visit David’s bio for his contact information to reach out to him directly.

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[8] A variation of this is sometimes referred to as “online mediation” in which both sides (rather than the mediator) submit confidential settlement offers. If the offers fall within a certain range, the case is settled half-way between them. See New Trends in Mediation, Texas Trial Handbook §5:12 (3d ed.)

[9] These techniques (brackets, mediator’s number/proposal, private numbers) are considered hypotheticals. If they don’t result in a settlement, it is as if they never occurred.

[10] Similar to judicially conducted settlement discussions during trial.

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