By Judith Ittig is a well-known arbitrator and mediator. She is a Neutral on the Senatus ADR Panel. Mrs. Ittig is a Fellow of the American College of Construction Lawyers, a Fellow of the College of Commercial Arbitrators, and a Chartered Arbitrator of The Chartered Institute of Arbitrators (London). She is a Certified Mediator by the International Mediation Institute. Ittig is often a Guest Speaker at Professor Larry Ray's Mediation and Negotiation classes at The George Washington University School of Law.
1. When to Make Offers
It is not always wrong to “get down to brass tacks” with offers and counteroffers from the outset. Usually, though, I find that the parties' initial positions are so far apart that it is important not to solicit offers until the parties have been brought
into a range of settlement that likely can be bridged. Making a low or high first offer is helpful because it sends a message that you are not going to easily renounce your demand. But, low or high first offers can be insulting to the other party, so much so that the party may feel that the mediation is useless and that it will be impossible to settle. That's when you need to consider how to make offers.
2. How to Make Offers
Big concessions early on are better explained and understood than big moves at the end to reach accord. If you make small moves in the early offers and then make a big move to reach settlement, you are sending the message that there is more left in your position to give up. I would rather see good, solid offers (still below your best offer) in the middle of the negotiations, with smaller increments of change in offers as the mediation nears completion. That sends the message that you and your client are really trying to reach a settlement, but your resources for changing your position are diminishing. That approach helps bring the mediation to completion with a settlement.
Think about what you expect the other party to do with your offer/counteroffer. You’re not just stating a demand for settlement, you should be trying to get the other party to move enough in your direction that a settlement can be reached. If you don’t see a benefit coming your way from your offer/counteroffer, rethink whether it is wise to have the mediator communicate it. Perhaps it would be better not to give a specific offer. Instead, have the mediator take back to the other party your concerns about the other party’s last stated position.
That message may open a dialogue that leads to a more receptive audience for the offer you eventually make.
3. Enhancing Your Offers
Tell the mediator if there are positive non-monetary items that could make your settlement offer more appealing to the other side. For example, if you are representing a business that sold goods or provided services, you may be willing to continue your warranty obligations as part of the settlement. Or, you may propose to couple your offer with a confidentiality/non-disparagement clause that promises that you won't talk about the dispute outside the mediation and that you won't publish harmful information about the other party. You might even go so far as to give the other party a written statement of what you would say if an inquiry
were made to you about the other party and the dispute you had. If you are an architect, contractor, or interior designer, you may be willing to allow the other party to have the use of your plans and drawings if they want to continue their project with someone else. This type of offer may be of real value to the other party and of little or no value to you.
Think creatively about things you can do for the other party that enhance your offer of settlement, but don't really cost you anything.
A word of caution - you may inform the mediator of these types of settlement options, but think about when you want that information revealed to the other party. Don’t just allow the mediator to make this timing decision. Rather, discuss it with the mediator and decide together when the other party would be most receptive to, and value, the enhancement you are offering.
4. Consider Partial Settlements
If the dispute does not settle by the end of the mediation session, don’t give up. Think about whether any parts of the dispute have been resolved, and, if so, whether those parts can be agreed to as a partial settlement at that time. With multiple parties in a dispute, maybe you can agree on settling with some of them. Or, maybe discrete issues can be separated from the entire controversy and settled without waiting for a complete resolution of the whole dispute.
Even if a partial settlement is unworkable, at least make whatever aspects of the dispute have been resolved the jumping off point for the next round of negotiations. Document, and have everyone sign, what the next steps are, the
offer/counteroffer that will be the departure point when the mediation
is continued, and when the parties will return to mediation.
5. Working with the Mediator
Arrange to speak with the mediator separately before the mediation. You can use this call to discuss negotiation objectives, prior settlement discussions, impediments to settlement and your key concerns. It is often helpful to discuss with the mediator in advance of the mediation how you would like to begin the mediation. Do you want to present a lengthy opening with power points or do you
prefer brief or even no opening remarks? Are you going to share your opening remarks with a co-counsel or your client or your expert? Ask the mediator if s/he has a view about what would be most effective. In a recent mediation, a party’s attorney told me he just wanted to do a short introduction and then move right into
negotiations. Because I knew that attendees to the mediation from the other party were less knowledgeable about the background of the dispute and the issues to be settled, I advised him to prepare a comprehensive opening with slides and photos. The attorney followed my advice and I am convinced his opening presentation made settlement attractive to the other party, and it definitely
affected the monetary outcome.
In some cases, the clients are so combative and hostile to each other that having any type of joint session is not productive. If that might be your case, discuss with the mediator ways to conduct the mediation session to work around
A cautionary word: If you want to do a lengthy opening and the other party doesn't, and does not want you to do that either, don’t just immediately concede and forego your presentation. Think about what may be gained or lost by proceeding in your own way, discuss it with the mediator in advance, and if you decide to go ahead anyway, enlist the mediator to notify the other party and ask the mediator to express his approval of your approach.