Impasse – An Unusual Approach (?!)

Assume the following facts:

Plaintiff and defendant are mediating a serious litigated personal injury case with a skilled and experienced mediator respected by both sides. Both clients are present, and the defendant’s insurance adjuster is in attendance with full settlement authority. 

They’ve been at it for over 7 hours. All issues and disputed facts have been thoroughly discussed. Both sides have the case well-prepared, and complete discovery has been done. 

It’s 4:45 pm, and the postures are as follows: Last demand by plaintiff, $200,000. Last offer by defendant, $150,000. Everybody is exhausted, frustrated, and each side is threatening to walk out. It reasonably appears that each side is at their last-and-final. Both sides, generally speaking, want the case settled today. 

To break the impasse, the suggestion is made that the mediator, with everyone present, should flip a coin twice. If it comes up heads both times, the case settles for plaintiff’s number. If it comes up tails both times, defendant gets their number. If it’s a split, (one heads and one tails), the parties split the difference, and the case resolves for $175,000. 

Each side has a 2/3 chance of getting either their own favorite number or at least a pretty good number. 

Is this suggested procedure an appropriate way of breaking the impasse, considering the time-crunch? After all, the case has been well-prepared, and a good-faith effort has been exhausted to settle the case. Time is up, and the “odds” seem pretty good for each side.

 This is a real situation that happened a few years ago in a case I was involved in, where I was representing one of the parties. Everyone agreed to the proposal except the plaintiff, a middle-aged homemaker. She was outraged at the suggestion, because she felt her position was “right.” The notion that she should settle her case based on a game of chance offended her sense of rightness. In her mind, each of the demands and offers (and of course the ultimate settlement) needed to be based on principle. 

At the end of the day, the mediator made a mediator’s proposal that split the difference at $175,000, and the case settled for that number a week later.

One of the interesting things about mediations is how the process unfolds.   Initially, no one knows if the case is going to settle. It is a very organic, social process that unfolds in a unique way. Each case is different. 

As the conversations go on, often it becomes clear intuitively that the case will very likely settle today, the only question is the final number. Sometimes the parties get to the point where they are just trading numbers, back and forth, in what seems a reductionistic, mechanical (arbitrary? random?) way. 

Obviously the plaintiff in the example above, held on to an emotional attachment to her notion of “fairness” or “principle,” even when the professionals were urging what seemed to her a quick and dirty way of getting to the end. She was not impressed with the effort and diligence that had gone into the prior preparation and issue-driven discussions throughout the day. She wasn’t finished with the process, and wasn’t interested in short-cuts. 

Interesting. . . .