Mediator’s Proposals: God’s Gift to Mediation, or a Betrayal?

By Martin Quinn

Martin Quinn

Martin Quinn

Once upon a time some 35 years ago, mediation was talked about in the United States as a tool to cure dissatisfactions with the civil justice system.  The great early teachers and scholars of mediation — Frank Sanders, Christopher Moore, Leonard Riskin and others — envisioned a process focused on party autonomy that would allow disputants not merely to resolve an immediate legal problem, but to reorient their personal or business relationships into a productive path.  Early mediations were usually conducted without counsel in a highly facilitative model in which the parties and the mediator remained together for all or most of the session.

This model in legal mediations has, of course, largely given way as attorneys entered, and came to dominate, the process.  Legal mediation today relies heavily on private caucusing and has largely abandoned any substantive joint session.  Mediators are likely to be highly directive, if not explicitly evaluative, in pushing the parties to an agreement.  Party autonomy has receded, while the power of attorneys and the mediator to influence the result has expanded.  One result of this evolution is the growing use of the mediator’s proposal to bring about closure.

A frequently employed tactic, the mediator’s proposal, works like this: The parties have exhausted their ability to negotiate further.  Neither side can in good conscience accept further compromises.  But they are close enough to a deal that both sides appreciate that a final effort makes sense.  Assume plaintiff is demanding $250,000, and defendant has offered $190,000.  The mediator proposes a dollar number (or more detailed terms) between the two positions, based not on a legal evaluation of the case but on the mediator’s judgment as to a number that both sides are most likely to accept.  A mediator may tell the parties that her proposal has nothing to do with Truth and Justice, but is the number her stomach tells her is most likely to draw two “Yes” responses.  Each side may say “Yes” or “No.”  If there are two “yes” responses, there is a settlement.  If there is a “Yes” and a “No” or two “No’s,” the mediator says only that there is no settlement — without revealing the responses of either side.  Therefore, each side knows that it may respond “Yes” secure in the knowledge that its compromise will never be disclosed unless there is a deal.

A busy legal mediator reports that he now uses a mediator’s proposal in about two-thirds of his cases.  Why?  First, it works.  Neurological research teaches that reactive devaluation – the tendency to reject any proposal from an opponent – diminishes greatly when a neutral proposes the compromise.  Second, attorneys with mediation experience have come to expect a mediator’s proposal and negotiate accordingly:  intentionally leaving bargaining room open knowing that the mediator will propose the one final compromise.  Thus cases that would likely have settled through party negotiation alone now arrive at impasse as each side anticipates a mediator’s proposal.  Third, a mediator’s proposal allows the party representatives to feel — and to tell their bosses — that they held firm but the mediator “made them do it.”

For more on Mr. Quinn’s discussion on Mediator’s Proposals, please read the full article from Law.com by clicking here.

Mediation Briefs: Do’s and Don’ts

By Martin Quinn

Martin Quinn

Martin Quinn

Here are some Do’s and Don’ts from a mediator’s perspective to help you prepare your mediation briefs.

Do remember that the mediation session will likely be the last day of your case.  Treat the event with the importance it deserves, and start by preparing an effective, timely brief.

Do submit and exchange your brief at least one week, and preferably two, before the session.  This allows time for opposing counsel to get it to their client.  Particularly if an insurance company is on the other side, it needs at least 10 days to consider and react to the brief — perhaps by increasing its reserves on the case.  Moreover, mediators have a lot to read — help them out by giving the time they need to digest your brief and put in a call to you to discuss the case.

Do set a collaborative tone and don’t insult your opponent.  Fisher and Ury said it all in Getting to Yes:  “Be hard on the issues, but soft on the people.”  Argue the facts and the law firmly and persuasively to show your case to its best advantage.  Also remember, you are trying to reach agreement with these people, not beat them into the ground.  When you want to reach agreement with someone — be it a spouse, child, partner or legal adversary — it doesn’t help to accuse them of fraud, racketeering, dishonesty and bad faith.  Do let the facts and the law speak for themselves — do not hurl ad hominem insults and gratuitous accusations.

Do come clean on any weakness in your case.  If you are strong on liability but shaky on damages, say so in your brief — and then explain how you are going to deal with the challenge.  Nothing will increase your credibility more with the mediator and the other side.  Nothing will torpedo faster any credibility you have than for the mediator to learn about some big weakness in your case only from the other side’s brief.

For more on Mr. Quinn’s Mediation Briefs Do’s and Don’ts, please read the full article from Law.com by clicking here.

Mediation Tips: Bidding against Yourself—For Fun and Profit

By Martin Quinn

Martin Quinn

Martin Quinn

Without a doubt, the words mediators most often hear from counsel are “I won’t bid against myself.”  This phrase is engraved as immutable law in the hearts and minds of virtually all counsel who come to mediation.  By this, they mean that they will not make another negotiating move unless their opponent responds to their last move.  As a general negotiating tactic, it usually makes sense.  Negotiation is a conversation, which should normally be reciprocal.  Neither side gives way without getting something in return from the other side.  But negotiating settlements in complex lawsuits is not the same as buying a rug in a Middle Eastern souq.  Counsel need to be more flexible, more creative and more willing to break “rules” to reach their client’s goal.  And yes, in a few instances, a creative negotiator should bid against herself.  Knowing when and why to do that gives counsel another tool to garner a win in mediation for the client.

The first instance is at the initial offer or demand.  Assume that plaintiff has made a pre-mediation demand of $1.5 million.  Defendant has refused to respond because the demand is so far “out of the ballpark.”  What to do?  By moving off the $1.5-million demand a bit—say to $1.425 million—plaintiff will get the negotiation conversation started, engender some good will in the defense room and demonstrate confidence in its initial number (because it moved only a little).  It will surprise the defense (who of course would never bid against itself) and put plaintiff in control of the early negotiation—all at no cost since the case obviously is never going to settle in the $1.4- to $1.5-million range.  In response, the defense is likely to make a more businesslike, higher offer than it would have made had the mediator insisted that it respond to the $1.5-million demand.

The second instance is when things are stuck after two or three rounds of minuscule, unconstructive tit-for-tat moves.  Plaintiff is telling the mediator it’s time to leave and expressing reluctance to lower its demand.  The defense should consider making another offer—that is, bidding against itself—but should shake things up by throwing in some non-monetary term.  For example, even without any response from plaintiff, the defense might increase its monetary offer by a small amount, but also offer to structure the settlement in a tax-advantageous way for plaintiff.  Or in an employment dispute, the defense might raise its back pay offer a bit but add an offer to pay for outplacement services.  This breaks the cycle of useless mini-moves, increases the “pie” of options available to frame a deal from money alone and again demonstrates confidence.

For more on Mr. Quinn’s Mediation Tips, please read the full article from Law.com by clicking here.

Think there’s fruit in your Froot Loops?

By Martin Quinn

Martin Quinn

Martin Quinn

Martin Quinn is a JAMS neutral, based in San Francisco.  He specializes in resolving business and complex tort disputes and frequently acts as special master in complex federal and state actions.  He can be reached at mquinn@jamsadr.com.

Do Fruit Roll-Ups and Fruit by the Foot have to contain real fruit?  Mediation is a perfect vehicle for resolving food labeling cases involving claims of false advertising and violation of state consumer and unfair competition laws.  These cases present a myriad of different claims and defenses that create significant risk for both sides.

Class plaintiffs typically allege that a food product’s ingredients do not square with its advertised contents, that it does not convey the advertised health benefits, that its benefits are not “clinically proven” as represented, or that its claimed qualities do not exist.  Defendants raise issues such as preemption by federal law, misrepresentation of a product’s advertising claims, and the obviously fanciful nature of foods such as “crunchberries” or “fruit loops.”

Certifying a class in these cases presents special challenges.  Ascertainment of the class members is difficult:  who bought which product, who saw which label or advertisement, who is unable to show damage since they benefited from the product?  Therefore, class members can usually be identified only by a post-judgment or settlement claim process.  Defendants will argue that individual issues of injury and damage predominate.

Mediation provides a confidential and flexible forum for plaintiffs (often public interest groups) to obtain the non-cash remedies they principally want:  prompt enforceable changes to misleading labels, and possibly corrective advertising.  Defendants obtain quick resolution out of the public eye before damaging publicity emerges.  They may also obtain the benefit of a class settlement that provides statewide or nationwide protection against future attacks.  Damages are usually a secondary objective, but they too can be effectively negotiated in a mediation setting.

During negotiations over attorneys’ fees the mediator needs to tread delicately, since defendants want to know their total settlement cost including fees, while plaintiffs’ counsel will resist discussing fees until compensation to the class has been tentatively agreed.  A mediator can usually subtly give the defendant hints of the likely range of attorneys fees, to give defendant enough comfort to reach preliminary agreement on class remedies.

Since negotiations often hang-up over all parts of the discussions:  labeling changes, corrective advertising, reimbursement to the class, attorneys’ fees.  So the mediator must be ready at the right moment to offer a mediator’s proposal — often a complicated multi-part proposal that the mediator will type and present to both sides.

Mr. Quinn’s original article was published in the Daily Journal in October.  For the full article, click here.