Mediation Message No. 51


Because of misconceptions regarding a mediator’s proposal, I am taking this opportunity to clarify them.

What is a mediator’s proposal? It is just that, a proposal by a mediator for settling litigation between the parties. It does not indicate the mediator’s opinion of the merits of the case. Instead, it reflects his educated guess as to the terms that all of the parties will find acceptable.

When is a mediator’s proposal made? There are no rules for when it should be made, just as there are no formal rules for how any other part of a mediation should be run other than that the process must be conducted under a cloak of confidentiality. Experience, however, shows that a proposal is most effective when the parties have reached a stalemate and there are no other methods of breaking it.

Should a proposal be made without the consent of the parties? It is preferable to have everyone approve its use beforehand because one of the parties may not wish to participate in this process.

Is the proposal oral or in writing? A proposal should be in writing so that there is no ambiguity or confusion about the recommended terms and conditions.

What terms or subject matter should the proposal contain? The proposal should include all material issues that have been discussed by the parties, such as the amount of the settlement, whether it be a lump sum or in payments, when the payment(s) should commence and whether the settlement should be confidential. As a practical matter, parties have little problem in subsequently resolving collateral issues when the major ones have been agreed to.

When should the parties respond to a proposal? The timing of the response is up to the parties. It is best to obtain immediate answers to a proposal so that, should it be accepted, a settlement agreement can then be finalized, thus preventing any of the parties from having second thoughts. On the other hand, one or more of the attorneys may need additional time to talk to their respective clients about the implications and consequences of the proposal. In that instance, they should advise the mediator how long to keep the proposal “open.”

Is a proposal binding if accepted only by the attorneys for the parties? The proposal is not binding if the parties have not executed it.

What if everyone agrees to a proposal? In that instance, the mediator tells the parties that they have a “deal” and to finalize the terms of the proposal.

What if one party accepts a proposal and the other rejects it? Should that occur, the mediator shall not tell the rejecting party that the other accepted it because, to do so, would give the rejecting party an incalculable advantage in the continuing negotiations.

What are the parties’ options if a proposal is rejected? The world has not come to an end. The mediator will determine how far the parties are apart and continue, either in person, by e-mail or on the telephone, to discuss the alternatives with them.

Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
(310) 201-0010

Copyright Michael D. Marcus, June 2009

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