MICHAEL D. MARCUS’ MEDIATION MESSAGE NO. 33
BREAKING AN IMPASSE AT MEDIATION
Occasionally, during a mediation, the discussions cease being fruitful because of unrealistic expectations, a disagreement over material facts, bad timing (incomplete discovery; an impending motion for summary judgment), the failure of one side to have sufficient settlement authority or the absence of an essential party. This message discusses ways of breaking an impasse when the expectations of the parties (usually over the monetary value of the case) are far apart.
During the distributive bargaining process of repeated demands and offers, one side may dig in its heels and refuse to move any further. In such circumstances, assuming that the relevant facts and applicable law have already been fully discussed, the following approaches may be helpful:
Bracketing – In a case with a potentially high settlement value where the demands and offers of the respective parties have left them still far apart, it may be helpful to obtain an agreement from each that they change their positions to agreed upon sums. For example, if the plaintiff and defendant are “stuck,” respectively, on $500,000 and $75,000, both may consent to continue the negotiations at $375,000 and $150,000. The bracketed numbers should reflect the strengths and weaknesses of each side’s case. The downside to bracketing is that it may involve as much time as would be needed to get the parties to move to the same, acceptable numbers. Its benefit is that it provides a different dynamic to the discussions and may cause one or both parties to provide additional insight into their thought processes.
“Split the baby” – This simply involves dividing equally the amount between the last demand and offer. It works best when the difference is relatively small.
Baseball – Like baseball arbitration, the parties submit their respective numbers to the mediator. The number closest to the mediator’s valuation is accepted. This method is rarely used because it is unpredictable.
Wouldya-Couldya – After lengthy negotiations have taken place and with some sense of what the case is “worth” to the respective parties, the mediator asks one of the parties if it would settle the case for a specific amount. If the party is agreeable, the mediator “floats” the possibility of settling at that amount to the opposing side without representing that that amount is an offer.
Mediator’s proposal – This tactic requires the mediator to propose a settlement on terms (e.g., amount, number of payments) that will most probably be acceptable to all of the parties. The proposal does not reflect what the mediator believes is the value of the case. Depending on the wishes of the parties, it can be kept “open” for a short period of time or for several days.
Arbitration – The prospect of arbitrating the matter rather than trying it to a jury may be acceptable to the parties if the case does not have strong emotional appeal and holding down costs is an important consideration for both sides. Because the mediator has heard so much about the case, it is preferable that he or she not be the arbitrator. However, if the parties want to use the mediator, the mediator must, pursuant to Rule of Court 1620.7(g), inform the parties, inter alia, of the consequences of their having previously revealed confidential information.
Hi-Lo – Whether the case be tried to a jury or arbitrator, the parties agree beforehand that the judgment shall be no greater or less than two specified amounts.
Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
Copyright, Michael D. Marcus, April 2006
Copies of Michael Marcus’s previous Mediation Messages and Arbitration Insights are available by e-mail request.