Your case, your call: Rethinking mediator's proposals

The Mediator's Proposal is one tricky tool. Done well, it brings a lawsuit to an end. Done poorly, it prolongs- or even escalates - conflict. So, it's important to manage it wisely. But how?

First, a definition of terms. A Mediator's Proposal is the mediator's invitation for all sides to agree - simultaneously - to terms of settlement. Each side responds confidentially. If everyone accepts, the mediator uncorks the champagne and announces a deal. If anyone rejects, the mediator simply reports "no deal," and a party who said "no" never learns how the others responded.

The power of the device lies in its confidentiality. It lets parties signal a willingness to move without fear of setting a new floor or ceiling that can later be used against them.

Before making a Mediator's Proposal, the mediator should be confident it will succeed. How come? Because if it fails, we're up to our hips in trouble. Suppose one side accepts and the other rejects. To the acceptor, the number is no longer just what the mediator thought might work - it becomes the number ordained by heaven.

From there, good luck convincing that party to move closer to the other side's position. We're stuck.

How, then, do we avoid that trap?

In my practice, I make both the timing and the terms of the Mediator's Proposal the subject of negotiation between the lawyers. That's how we give it the best shot at success.

First, the timing. When bargaining stalls, I'll generally ask the lawyers whether it feels like the right moment for a Mediator's Proposal. Sometimes they say yes, sometimes no. Either way, the conversation reveals something valuable about where we are and what needs to happen next.

Next, the substance. If we agree it's time, I'll generally ask what terms the lawyers could consider recommending to their clients - even if only grudgingly. These conversations almost always happen outside the presence of clients. Sometimes, the lawyers and I hash it out all together; other times, I shuttle between their rooms.

Some lawyers are initially taken aback by this approach. But once I ask, "What's the sense in making a Mediator's Proposal you won't even recommend?" - and we talk through our shared interest in making a proposal all sides can accept - we're usually able to move forward together.

Then, once we've agreed on terms all the lawyers can recommend - voilà. I've never seen this fail. And the benefits of this approach go far beyond a settlement for settlement's sake.

Consider the alternative, one I find lacking both practically and ethically: The mediator who picks a number without your prior input.

Imagine a mediator who walks into your room, says "The Mediator's Proposal is X," and then walks right back out.

Your client turns to you and asks the acid-test question: "Is that really the best we can do?"

In truth, you don't know. You've had no chance to test the mediator's thinking, no chance to push back, no chance to look opposing counsel in the eye and assess whether they might pay more or take less.

You might burble something like, "We have to trust the mediator."

But does the structure of the mediation warrant that trust? I think not.

You have a duty of undivided loyalty to your client. The mediator, by contrast, works for both sides, is paid by both sides, and may care more about getting a deal - any deal - than about securing the right deal for your client.

The mediator may also harbor biases, conscious or not, against you or your client - biases you may not detect and the mediator may not fully recognize.

So, how much trust does any mediator deserve? Not enough to decide unilaterally where your case should settle.

There's an ethical dimension to this as well. A lawyer's most fundamental duty is to provide competent representation to the client. (Rule 1.1, ABA Model Rules of Professional Conduct.)

That duty limits how much responsibility a lawyer can delegate to others. Too much, and you're flirting with client abandonment - and a possible violation of professional duty.

The California Supreme Court addressed a comparable issue in Moore v. State Bar, 62 Cal. 74 (1964). Attorney Moore had delegated so much to a lawyer whose license had been suspended that "Moore thus mistakenly place(d) himself in the position of his client rather than his client's lawyer." 62 Cal. at 77. Moore's client ended up in default, and Moore received professional discipline as a result.

Thus, if a mediator simply drops a Mediator's Proposal on you, what's the difference between your client's role and your own?

You're both passive recipients of the mediator's work - its benefits and its shortcomings.

If you can't draw a meaningful distinction between your client's role and your own, you may be edging into the same ethical trap that ensnared attorney Moore.

What, then, is our teaching point?

When you select a mediator, make this part of your due diligence. Ask about the mediator's approach to Mediator's Proposals. Does the mediator seek permission before making one? Does the mediator consult with the lawyers in advance, or does the mediator just pluck a number from his ear (or some other aperture)?

Consider both the practical and ethical implications of the mediator's method before you make your choice. You owe your client no less.

Jeff Kichaven is an independent mediator in private practice. He's "Ranked in Chambers - Band 1" on the USA Nationwide list of mediators. He can be reached at 888-425-2520 or jk@jeffkichaven.com.