Arbitration & Mediation

Exchange Your Bottom Line Blindly?

By Christopher Annunziata

I’m sure that at one time or another, most mediation advocates have walked into mediations unsure whether the other side was in the same “zip code”, “ballpark” or even “universe”.   Even after a few rounds, even the mediator may be unsure whether that 8 figure demand is bluster or a serious number.

Over at the always interesting and practical Settlement Perspectives,  John DeGroote discusses a creative method of determining whether mediation might be useful in resolving the dispute - the ?blind bottom line approach? or as John W. Cooley called it, ?blind bidding enhancement.?

In this process, each side agrees to submit to the neutral their bottom line positions.  If the numbers are within an agreed upon range, then the mediation proceeds.   If not, the neutral informs the parties that they are not within range and keeps the numbers confidential.

Initially, I didn’t think that this would work unless the lowest demand was less than the highest offer.  But John explained to me that it is an issue of re-framing.  He believes that even though the plaintiff might say they won’t go below $4million (or $4,000 even), and the defendant says they won’t go higher than $3.5million (or $3500), once the parties realize the gap is small (relative to the total amount at stake), they will proceed with mediation.   This may be the case, but I’ve seen people fight over $10 in a small claims mediation.  Yes.  $10.

I think this can be a great idea for certain types of cases - high end PI cases and employment cases come to mind.  But I am not certain I would want to mediate the case knowing the parties’ bottom line positions.  I generally avoid this knowledge as  I think it can unnecessarily and perhaps unconsciously alter the way I approach the mediation.  Especially as the parties reach that “sweet spot.” But that is a “me” problem.

John has called on the mediation blogosphere to come up with an agreement that would memorialize this type of arrangement.  I’ve got some cases this week, but I promised him I’d put it on my To Do list!

Full post as published by CKA Mediation and Arbitration Services Blog on January 06, 2009 (boomark / email).