Mediation: What is a mediator’s proposal?

One tool that many mediators use to try and help resolve cases is a “mediator’s proposal”. What is it?

Many mediations will come to an impasse, where the parties can’t reach an agreement. To help bridge that gap, many mediators will use a mediator’s proposal to settle the case.

In a mediator’s proposal, the mediator will provide a proposed settlement number to both parties. The mediator will then give a deadline for each party to privately respond to the mediator about whether the party will accept or reject the proposal. The time to respond is generally a few days to a few weeks. The time usually depends on how long the defendant’s insurance company needs to go talk to supervisors, teams, etc. necessary to get the authority to respond to the proposal.

The proposal is not generally what the mediator thinks is a fair number to settle the case, instead it is a number that the mediator thinks can get the case resolved.

The mediator’s proposal works for a few reasons. One, the mediator is in both rooms during the mediation. So even when the parties think there is no way for a case to settle, the mediator knows more information than us, including whether there is still a chance to get it done.

Second, the response is confidential — the mediator does not tell you how the other side responded. Now, in many cases, you can deduce the response. For example, if the case settles, you know both sides said “yes”. And if you said “yes” and the case doesn’t settle, you know the other side said “no”. But if you say “no”, then all you hear is that the case didn’t settle — you don’t know whether the other side said “yes” or “no”. Similarly, when the other side says “no”, they don’t know if you would have accepted the proposal or not. So this confidentiality allows you to make a move in the negotiation, but not being bound by it if the case doesn’t settle.

Many insurance adjusters also like the mediator’s proposal because it can help them justify increasing their offer to their supervisors so they can get their claim closed.

Not all mediators use the mediator’s proposal process, but I’ve found it effective in many cases.