22 Feb

Getting Past Impasse with Mediator Settlement Recommendations

By Mitchell Rose, LL.B., C. Med

While it’s preferable for parties to a dispute to settle their own case at mediation without a mediator’s settlement recommendation, a recommendation is useful, as a last resort, to break an impasse. The author presents his “No One Gets Hurt” approach to settlement recommendations in the mediation of civil disputes.

I conduct mediations of civil (non-family) legal disputes in Ontario, including employment law, commercial matters, personal injury and real estate. The majority of these mediations take place after the commencement of legal proceedings and involve parties who are represented by lawyers.

In many cases, examinations for discovery have taken place – but a judicial pre-trial usually has not. Often, there is a summary judgment motion scheduled to take place in the months following mediation. It is unusual for more than one mediation session to be held in these actions, and many of them are scheduled by counsel for less than a full-day.

Accordingly, the stakes are high for all participants. Reaching the end of a mediation session and learning that the two sides are far apart in their settlement positions can be disappointing due to the risk and costs that will soon follow as the case heads speedily towards a hearing. Statistically, the hearing will likely never happen. Yet often without further intervention (like a pre-trial judge) or a threat of court feeling more “real” (because it is close), the parties may not be prepared to bridge the gap.

Thus, in the following weeks, after the “dust settles”, I usually follow up with the other lawyers. I want to see if hard positions have softened, or if there is another way of resolving the dispute. However, despite everyone’s best efforts, there may still be an impasse.

In a final attempt to resolve the dispute – whether at the end of mediation or at some later point – one or more of the lawyers often ask me to recommend (or, to propose) settlement terms to all sides in the hope of reaching a deal. In fact, I may even be asked much earlier in the process: “What do you think we should do?” A mediator’s response will depend upon the type of mediation model utilized.

Mediators using a pure “interests-based” model may resist making settlement recommendations at any time. To them, it’s the parties’ dispute and the mediator is only a facilitator. Contrast this with an “evaluative” approach:

An evaluative mediator often makes a recommendation early in the process based upon what they think a judge or arbitrator would do given the facts and the law. The evaluative mediator may then attempt to persuade the participants to accept the recommendation.

I blend interests-based and evaluative approaches. The precise blend depends on the circumstances and the other participants. I will often, but not always, make settlement recommendations to break an impasse – but, when I do, it reflects my hybrid mediation model.

I like to refer to my personal approach to settlement recommendations as “No One Gets Hurt”. Here’s how it works:

  1. It’s preferable if the parties settle their own case without a mediator recommendation. However, a mediator recommendation is useful as a last resort to break an impasse. I prefer that it take place after the mediation when it is clear that a settlement cannot be reached without this type of mediator intervention.
  2. It’s ideal if one or both sides request a recommendation, as opposed to the mediator offering one. That said, if no one asks, and I think it will be helpful, I will usually offer to make a recommendation.
  3. Regardless, both sides must agree to hear (or read) my recommendation before it is given so that I can be certain it is conveyed to the decision maker. This is necessary only where the recommendation takes place after mediation when I am normally just speaking with counsel.
  4. The recommendation is privileged, so it cannot be revealed to anyone, especially the Court. If the recommendation takes place after the mediation session, the parties have already agreed that my recommendation is an extension of the mediation, and governed by the mediation agreement.
  5. I will not provide explanations or reasons for my recommendation. I don’t want to argue with counsel, and I am not writing an arbitral award.
  6. There is no settlement unless both sides agree to the actual recommendation.
  7. The parties are asked to respond to my recommendation privately (separately) and confidentially. Each side will know if the other side(s) accepted the recommendation only if all sides accept it. If just one side says “yes” to the mediator privately, the “no” side(s) will not learn about it. Everyone would simply be advised that there’s “no deal”.
  8. Thus, “no one gets hurt”. The idea throughout is to preserve party autonomy and bargaining power, while maximizing efficiency and the chances of settlement. At the same time, one avoids the excess risk, cost and time of continuing with the proceeding in the hopes (or fears) of a third party opinion that is actually binding.
  9. In my experience, most of the recommendations I make are accepted, resulting in a full settlement.
  10. Normally though, the recommendation (whether accepted or not) marks the end of my role as mediator in a case. I won’t try to convince uninterested participants to accept my proposal. However, I sometimes ask, confidentially, what part(s) of my proposal a party would accept and if I can convey that information to the other side. This can still lead to an eventual settlement. The rejected recommendation may also prove useful in future negotiations.

Mitchell Rose is a Chartered Mediator, lawyer and settlement counsel with Stancer, Gossin, Rose LLP in Toronto. He is on the board of directors of the ADR Institute of Ontario.

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