The Mediators Speak: Extreme Opening Demands and Offers

• Pages: 33-35
• Date: 01 October 2024
• Author: Jeff Kichaven,Rachel Ehrlich

Insurance Coverage

Vol. 33 No. 3

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Published in Coverage Vol. 33 No. 3 Copyright © 2024, American Bar Association. All rights reserved. This information or

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Practice Points»

The Mediators Speak: Extreme Opening Demands and

Offers

By Jeff Kichaven and Rachel Ehrlich

Jeff Kichaven:

“Good news,” the plaintiffs’ lawyers say to the mediator across the table, smiling almost too

widely as they sit next to their clients in an early caucus on the mediation day. “We know

that in the etiquette of bargaining, we generally go first. We set the tone. So, we have a

demand we’d like you to convey to the defense. It’s lower than we planned. It’s… (wait for

it)…one gazillion dollars.”

Lower than they had planned? Perhaps, but ridiculous nonetheless. Should we fear that it

sets the wrong tone for the negotiation to follow? No.

The mediator knows exactly what’s going on. Plaintiffs’ lawyers are trying to protect

themselves from unfair client criticism at day’s end. If the case is to settle, it will settle for

what it’s objectively worth, generally speaking. The plaintiffs have rose-colored glasses,

though. They hope a ridiculously high opening demand will materially tilt the result their

way. If the lawyers don’t let their clients have their way, and the case later settles for what

it’s objectively worth, the clients could gripe, unjustifiedly, that they would have done better

had they started at their preferred gazillion-dollar number rather than the more sensible

number their lawyers would have preferred.

So the mediator responds, “Let me ask, how do you think the defense will react?”

The lawyers sit quietly as their clients’ faces go doe-in-the-headlights.

“If I might share my thinking,” the mediator says to break the awkward silence, “it will be a

challenge to keep the defense from walking out. I think they’ll view your demand as

extreme. While I think I can get them to stay, I think they will respond with a rock-bottom

offer, something like $1.98. Are you ok with that?”

After another silence and a side huddle, the plaintiffs and their lawyers mutter they are

indeed ok with that. The mediator then trundles down the hall and returns 20 minutes later

with an offer of—you guessed it—$1.98.

Does this blow up the mediation? No. With the help of a skilled mediator, there are many

ways to breathe life into the negotiation and generate progress toward a deal. It’s plaintiffs’

turn to go next; what might they do?