Friday, August 8, 2008

The Mediator's Proposal (Also, the Difference between Party Offers and Proposals)

If offered at the wrong time or in the wrong way, a mediator's proposal can fall as flat as the plains of Kansas onto the mediation table. If offered at the right time and in the right way, it can crystallize a settlement process, much like a sand grain can lead to a pearl. How and when should a mediator offer a settlement proposal?

First, don't get in the way of the parties' own proposals. Now, I distinguish a party proposal from a party offer; a party offer is a low/high ball number which just invites the other party to reply with something equally as unavailing. The next offer is a baby step towards the middle, and so on. A party proposal is something that is carefully thought out and supported on a principled basis, and while it can be expected not to be immediately accepted by the other party, it does reflect some understanding of the other party's interests and objectives.

Usually, parties make many offers, but very few real proposals.

Second, don't introduce a mediator's proposal unless and until each party has had the opportunity to vent, explain its current position, explain its needs, motivations, interests and objectives, and has demonstrated some capacity to understand those of the other party. Moreover, there should be some time devoted to having the parties empathize (meaning understanding the other party's presentation, even if not agreeing with it), and having each party recognize that the other party is (at least somewhat) empathetic.

Usually, parties make offers when they have not really shown empathy; these offers are slight concessions offered as discounts to "get the deal done." They are not proposals, in the sense that they do not seek, in some way palatable to the proposing party, a way for the other party to solve a problem or need, or satisfy an appropriate interest or objective.

Third, if your mediation is in a litigated matter, or immediately before litigation commences, as mine often are, your mediator's proposal cannot purport to value each party's litigating position. A mediator needs to have each side try to convince the other side of the merits and valuation of its litigation. Usually, this can create some movement, but not enough to achieve a settlement.

As a mediator, you are in no position to jump in and offer a meaningful valuation of a party's litigation. I know, mediators do this all of the time, but they are really just bloviating (all for a good cause, mind you), or their egos have been pumped up on kool-aid. Even if you have read a full record with briefing materials supplied to you as mediation submissions prior to the mediation, all a mediator can really do is assess whether or not a certain claim makes some sense and whether a party's position is reasonable. That's plenty to work with, by the way, but that provides a mediator no special competence to say the litigation is worth x or y to any particular party. Maybe a mediator can say that the litigation is between one party's x and the other party's y, but isn't that sort of self-evident? And even if a mediator could correctly value a case, the parties are still going to resist because they know they will have to litigate this case if the mediation doesn't settle the conflict. So they will maintain a showing of strength even as they assess the wisdom of making concessions.

Here's the key: just as a mediator must recognize that the mediator cannot convince the parties it has any special competence that should lead it to adopt the mediator's valuation of the case, the mediator does have the strength of the mediator's neutrality in being able to offer a proposal that sounds in fairness.

The mediator can ask the parties to put two pins on a litigation valuation map, identifying where each party's litigation valuation rests, whether or not the parties have been making mere offers or have been able to make constructive proposals. Then the mediator can offer an alternative path, which the parties can assess as an alternative to further analysis of litigation value: a neutral mediator's proposal.

Now, some mediator proposals are apparent, even to the parties, after all of the prior discussion, and other mediator proposals require some creative analysis, on the mediator's part, of the parties respective interests and objectives. But the mediator proposal is ready to be made when the mediator believes he or she has reached an understanding of what would be a fair result in the matter.

If a mediator can express empathy, in the sense of explaining why the mediator's proposal solves some of each parties interests, and be assertive, in the sense of explaining why the mediator's proposal does not solve other of each parties interests, then the parties have two alternatives to choose from: the separate pins on their litigation valuation map, and the mediator's proposal.

My next blog entry will seek to assess which conflicts might prove to be more receptive to a mediator's proposal than others.