Should a Mediator Ever Make a Settlement Proposal to the Parties?

11 June 2015 Publication
Authors: Thomas I. Elkind

Mediators are neutrals. A mediator is not a fact-finder, and should not act as a judge to decide the merits of a case. The role of a mediator is to be a facilitator, to assist the parties in finding a mutually acceptable resolution of their dispute, not to dictate that resolution. At the start of a mediation, everyone usually agrees that this is the mediator’s role. Yet, part of the mediation process is an attempt by each party to convince the mediator that the other party’s position is wrong so that the mediator will put more pressure on the other party to alter its bargaining position. After a day of shuttling back and forth between the parties, a mediator often has a good sense of whether a settlement can be achieved, even if the parties have not found common ground. The parties may appear to be dug in to their final positions, and neither will make another offer. It may appear that the mediation has failed, but it may only be that neither party is willing to make the next move to overcome the difference between their positions. In this context, the parties may request that the mediator propose a number that the parties may then only accept or reject. Should the mediator comply with such a request?

Experienced mediators have different answers to this question. Some will say that making such a proposal is appropriate, as long as the parties understand that the proposal is based on what the mediator thinks both parties will accept, and is not based on the mediator’s evaluation of the merits of the dispute. The mediator will often propose the mid-point of the difference between the last offers made by the parties to demonstrate neutrality. If both parties accept the mediator’s number, the process used has produced a settlement. But if only one party accepts the number the other party may feel that the mediator has shown a bias against its position. This could compromise the fundamental element of perceived neutrality that is necessary for mediations to succeed.

Therefore, a mediator may not want to agree to make any kind of proposal, even if both parties request it. If both parties do not accept the number, the mediation likely will fail to produce a settlement. These mediators make it a policy never to propose a resolution to a dispute. One way to deal with the request for a mediator’s proposal without actually making a proposal is to ask the parties instead to state their true bottom line positions to the mediator confidentially. The mediator will not disclose those positions to the other side, but will either say that there is no overlap, or that there is overlap. If there is overlap, the mediator can ask the parties to accept the mid-point of the unknown overlap, or to keep negotiating. Either way, the case is then nearly certain to settle. If there is no overlap, the parties will know that the case will not settle unless one or both of the parties further alter their expectations.

Often, the actions a mediator takes after the parties have seemingly reached an impasse can be the difference between settling and not settling the dispute. A mediator who has listened well to the parties and has developed a sense of whether or not the case can be settled is more likely to choose an option that allows the parties to reach a settlement of their dispute. If the case does not settle, the mediation is less likely to end with one party feeling that the mediator has not been a true neutral if the mediator has refrained from making a proposal to settle the case.


Thomas I. Elkind

Retired Partner

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