Commercial Mediation: What’s Your Bottom Line?

{3:06 minutes to read}

When, if ever, do you let a mediator know your bottom line?

There are three answers to this question:

1. Never.
2. When you say, “Okay, we can settle for that.”
3. When it’s 6:30 p.m., and you (or your attorney or your client) have a 7:30 train to make. You know you’re pretty close to an agreement, and walking away now is painful given the time and money you’ve spent at the mediation. You don’t want to leave with the case unresolved, especially since you’ll have to wake up in the morning, and probably for quite a while, with the case still around.

As a practical matter, bottom lines can be malleable. They change for all sorts of reasons. In my experience, no one ever tells the mediator their bottom line before the mediation. Nor should they. Once an attorney or a client states a bottom line, it’s hard to get away from it. And you want the flexibility to get away from it, because you never know what’s going to happen five hours, or eight hours, or two weeks after you first meet.

At the risk of saying it helps to “think outside the box,” bottom lines can limit people’s imagination. Defendants sometimes settle for more than they wanted, or plaintiffs take less than they wanted, because the ongoing battle and associated costs aren’t worth it. But if they’ve climbed into that bottom line box, it can be hard to climb out.

Ironically, fatigue is often useful in making decisions at a mediation. Not because people act irrationally when tired, but because it can lead to conversations that don’t take place at 10 a.m. when everyone is full of vigor and firm in their positions.

Insurance issues may exist that provide (or limit) opportunities. Are there policy limits? Coverage issues? These can scare everyone. If coverage issues exist, an insurer may mention around 4 p.m. that it can kick in some money, if doing so will resolve the case that day. That may close a gap in bottom lines.

I find that litigants don’t always know their bottom line. Not because they don’t know the case, or the facts, or the potential value a case may have. Rather, the ideas they have at the beginning of a mediation can simply change over the course of a day (or more). The value of holding out to get more or pay less often diminishes as a mediation progresses. The “best” result may include getting back to business rather than being enmeshed in litigation.

In my next blog, I’ll discuss the importance of clients and attorneys discussing bottom lines before a mediation. Having that discussion forces parties and counsel to address legal and factual issues, which can be too easily avoided.

Gary Shaffer
Shaffer Mediation
Gary@ShafferMediation.com