The big day finally arrives for mediation in your biggest case. You’ve got big dollar signs in your head, as you wait anxiously in the mediator’s conference room. After meeting privately with Mr. Defense Lawyer, the mediator returns to see you with a glum look on his face and shakes his head in frustration at the defendant’s initial settlement offer. You’re told that the defense lawyer’s initial settlement offer is a pittance and the chances of a settlement are zero.
The mediator asks if you want to respond to the insanely low settlement offer, or just go home. Not so fast, my friend. Before you walk away from the mediation, there are proven methods for breaking a deadlock without compromising your settlement position.
Breaking the Ice with Bracketing
To get things moving at mediation, propose a bracket. A bracket is a proposal to simultaneously reduce the settlement demand in exchange for an increase in the offer.
Let’s say your settlement demand is $1.8 million, the defendants’ initial settlement offer is $100k and you want to settle the case for $850k. You and Mr. Defense Lawyer are a world apart in the initial settlement demand and offer and neither side wants to budge. You might propose a bracket of $600k/$1.3 million, i.e., you will drop the settlement demand by $500k on the condition that the defense lawyer increases the settlement offer by $500k.
It’s virtually guaranteed that the defense lawyer will balk at your bracket, and propose different terms. Let’s say Mr. Defense Lawyer proposes a bracket of $400k/$800k. Okay, this bracket won’t work for you, but you have a pretty good idea that Mr. Defense Lawyer wants to settle for $600k (half of her bracket). You can make a counter proposal of $500k/$1.2 million and keep working until you have an agreement on a bracket.
Bracketing works because it gives you insights into the price the defense lawyer is willing to pay without compromising your position. If you cannot agree upon a bracket, no problem–your settlement demand remains $1.8 million. There is no downside to bracketing as a method to get things moving at mediation.
Breaking the Deadlock with the “Mediator’s Proposal”
If the defense lawyer won’t agree to bracketing or her proposals are ridiculously low, don’t walk away from the mediation table just yet. The “Mediator’s Proposal” is a settlement $ chosen by the mediator that is submitted to both sides for a “yes” or “no”.
Let’s say the mediator selects a $ for the “Mediator’s Proposal” of $350k. If you agree to the mediator’s proposal of $350k, but the defense lawyer says “no”, the mediator does not share your response with the defense lawyer. Likewise, if the defense lawyer says “yes”, but you do not agree, the mediator does not disclose the defense lawyer’s response with you. The mediator does not disclose the response of either party unless both agree on the $ and if both agree, he simply says, “We’ve got a settlement.”
With a “Mediator’s Proposal”, you do not reduce your settlement demand and the defense has no greater insight into your bottom line. You either have a settlement or you don’t.
When All Else Fails, Try This
Before you leave the mediation, propose that each party write their best offer on a scrap of paper, fold it up and give it to the mediator in confidence. If the offers are within 10% of each other, you agree in advance to split the difference and you’ve got a settlement. If the offers are not within 10% of each other, the mediator shreds the scraps of paper and discloses nothing about the other side’s offer.
If everything fails, you need to send a message. Slam your books on the table and walk out—hey, there’s still a good chance the defense lawyer will come rushing out to the elevator to get you (he wants to settle more than you). And even if he doesn’t, remember:
“Going to court to gain justice for your clients is heroic.”
It takes chutzpah to go to court, but defense lawyers know there are certain plaintiffs’ lawyers who go to court and those who settle everything. You are not a settling lawyer–you are a trial lawyer and going to court to gain justice is what you do.