Should Parties tell Mediators Their Bottom Line?       

If this step does not lead to an agreement, the mediation will conclude with a brief joint meeting during which you will have an opportunity to decide if you wish to move on to the optional last stage of the process - a joint request for a final settlement proposal from the mediator. If you jointly request a settlement proposal from me, I will use the final numbers you put in the Safety Deposit Box in the following way:

"Sometimes, I believe the final number of one party is significantly more fair than the other. Then I adopt that same number as my own number in my proposal. In fact, my preference is to do this in order to provide an extra incentive for you to be as candid as possible when putting your number in the Safety Deposit Box. I obviously do not indicate if my number is an adopted one, although if you have already chosen to disclose your final number, the other side will know that. Sometimes, however, I develop my own number. It is my strong policy not to propose the midpoint between your two numbers. My proposed number will always be closer to whichever of your numbers I consider more fair. You will have some time to consider the proposal and then respond confidentially to me with a simple "yes" or "no." If you say "yes," you are entitled to hear the other party's response, but your "yes" is not communicated by me to the other party unless it also said "yes." If you say "no," you are not entitled to hear the other party's response. The case either settles for the proposed terms or else nobody's position changes. Before I separate you again and ask you to spend a few minutes discussing what your final bottom line number will be for the Safety Deposit Box, are there any questions?"

In short order, I obtain their bottom lines. If their numbers are close, a little shuttling normally produces a mutually acceptable number. If their numbers are not close, I convene a final joint meeting and offer them the option of a final settlement proposal from the mediator (normally faxed to them the following day so I have some time to reflect). I explain that I will do my best to provide them with a proposal that reflects my opinion of the case's settlement value and meets my standard of fairness: reasonable to my mind as well as comfortable to my conscience.

I also advise them that in the past, there have been some cases in which I declined a request for a proposal because I could not develop one that met my standard of fairness. I make a proposal only if both parties jointly request it, and I wait outside the room while they decide. Thus, each party knows exactly how its Safety Deposit Box number will be used during these final steps. Each maintains complete control over disclosure of its number and each has veto power over the making of a settlement proposal by the mediator. If they jointly decide to request a proposal, it will not be a mindless one "splitting the difference." I am required to either adopt or at least be nearer to one party's number. My stated preference for the adoption alternative provides an incentive for honesty, but the ambiguity created by the other option ( combined with my not saying which alternative applies) provides cover for a party which would like a proposal but does not want its final number revealed under any circumstances.

Taken together, then, these aspects of the Safety Deposit Box technique resolve the process uncertainty problems surrounding bottom line information, provide meaningful protections against manipulation by the mediator, and encourage candor from the negotiators. If the parties remain in a stalemate despite all that, they have an additional opportunity to reach agreement should they jointly request a settlement proposal.  All of the scenarios capable of occurring in the Safety Deposit Box explanation have in fact occurred in my practice. When I use this technique, it is only when we are near our deadline and the parties remain substantially apart (normally after a full day of negotiating), so the overlap scenario is by far the rarest. However, in a significant minority of cases, the numbers placed in the Safety Deposit Box have either been the same or close enough so that some follow-up shuttling quickly produced agreement.

The most common result is for there to be a significant gap between the final numbers. The option most frequently chosen by the parties has been keeping their numbers confidential, but many have selected conditional disclosure. 

Unilateral disclosure has occurred in only a few cases. More often than not, the parties jointly request a final settlement proposal, and a majority of these cases then settle. Even in the cases that do not settle, the parties often express procedural satisfaction with the control they maintain and with the clearly defined "end game." The limitations of this procedure should also be noted. It does not guarantee protection against all forms of manipulation, and there is no way to know if the parties are placing their actual bottom line numbers in the Safety Deposit Box. If the parties' views on the probable outcome of a trial remain significantly different even after digesting all the information generated during the mediation, this technique is unlikely to help them reach agreement. However, in money negotiations involving experienced attorneys, the parties' real opinions on ultimate case value are typically not so far apart as to make them unmanageable.

The Safety Deposit Box technique is but one example of mediation process solutions that can advance our more general goals of lessening uncertainty about what comes next and how information will be used, as well as encouraging honesty during private discussions with the mediator. The more we can do of that, the better our procedures will be.

Endnotes

1. See, e.g., Kimberlee K. Kovach, Good Faith in Mediation: Requested, Recommended or Required? A New Ethic, 38 S. TEXAS L. REV, 575 (1997); Carrie Menkel-Meadow, Ethics in ADR Representation: A Road Map of Critical Issues, 4 DISPUTE RESOLUTION MAGAZINE 3 (Winter, 1997).

2. However, before doing that I would first encourage analysis of alternative allocations of the overlap amount that might benefit one party at no cost to the other.

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Author's Website: www.contuzzi.com