Friday, February 27, 2015

Mediation And Arbitration Section: Go Get Me The Money! Part 2

By Charles W. Ross

As a mediator, I avoid asking about a party's "best number" because most parties consider this information to be private and strategic. Although communications with the mediator during private caucuses are confidential in Florida mediations, parties may fear that the mediator will inadvertently signal the "best number" to the other side and thereby harm the chances of achieving settlement. If the mediator raises this issue, it may place the lawyer and client in an awkward position and make them uncomfortable about declining a mediator's request.  

Another reason that asking for a best number is dangerous lies in the honest recognition that, in most cases, the party's articulated best figure is not completely truthful. Most parties hold back some amount to allow for "wiggle room" at the end of the negotiations, and I do not want to put lawyers or clients in the difficult position of losing face when additional changes are essential to reaching a negotiated settlement.

Further, if the parties reveal their anticipated numbers, especially early in the process, it can be discouraging to both the parties and the mediator. Because these targeted figures almost never succeed, they can cast a negative pall over the mediation and cause parties and their counsel to give up too soon. Patience and persistence are extraordinarily important to successful mediating, and "best number" dialogues do not favor those objectives.  

The last reason I believe that "bottom line" figures should not be disclosed to a mediator is that an experienced mediator will almost always discern the actual settlement numbers toward the end of the process without being told. The negotiation process, and information exchanged both privately and to the other side, will generally predict a settlement range without any need for revealing best numbers.  

Mediation can often bridge the final settlement divide when parties perceive the progress they have achieved, the benefits of settlement, and the relatively small gap remaining as compared to the distance they traveled to reach it. This effort is not enhanced by a consideration of "best numbers," especially those formulated early in the process, and I believe a mediator can work more effectively without knowing such information.
Having expressed my views, I certainly do not want to be perceived as telling lawyers or their clients how to negotiate at mediation. It is my hope, however, that these observations, as seen from the neutral's point of view, may be of some value as you pursue mediated settlements in the future.

Read "Go Get Me The Money! Part 1."