How to deal with yawning gaps in bargaining positions

Issue November/December 2017 December 2017 By Professor Dwight Golann
Dispute Resolution Section Review

Too often in mediation, lawyers confront a familiar dilemma: Both sides have made offers and then offered concessions — but a huge gap remains between them. Everyone is frustrated, and no one wants to make a serious move in the face of the other’s intransigence. Impasse looms.

One way I’ve found to get past these standoffs is a technique I call “confidential listener.” This device involves having the mediator ask each side privately how far it will go to get an agreement, then giving everyone a verbal assessment of the real gap between them. This allows parties to give the mediator and each other a signal about their willingness to compromise, without making a large “public” concession. Effectively applied, this method gives both the mediator and the parties a clearer sense of each side’s actual goal.

I would not use confidential listener at the initial stages of bargaining. Rather, I wait until the parties are deeply stalled, and introduce the option this way:

Your offers are a million dollars apart, but I think you are in fact much closer than that. Let me try something I call “confidential listener.” I’ll ask each of you to give me what I’ll call your “next-to-last number” — one step away from the lowest you’d accept or the most you’d pay to settle this case. I won’t reveal either side’s number to the other, or give you a numerical statement of how far apart you are; if I did, you each could calculate what the other’s number was. Instead I’ll call you together and give you a verbal assessment of the gap, like “pretty close” or “still very far apart.” This will give you a better sense of the gap, without locking anybody in. I’ll be back in a few minutes to ask for your number.

You’ll note that I ask for each party’s “next-to-last number” rather than its “final number” or “bottom line.” As a practical matter, few attorneys will disclose their bottom line to a mediator at that point, if indeed they even know what it is, because they expect that there will be more bargaining and they’ll be asked to compromise from any number they give. The next-to-last formulation is a suggestion from mediator Marjorie Aaron, designed to avoid forcing lawyers to lie.

Once you have the parties’ numbers you can give them a characterization of the gap between them. For example:

“The gap is substantial, but I think it can be bridged.”

“You are closer than the cost for each of you to litigate this case through trial, so it’s worth continuing to talk.”

“You are very far apart. Unless someone changes their view of what the case is worth it’ll be hard for you to agree. Should we consider getting an expert opinion?”

After giving verbal feedback, mediators have an additional option — to ask each side for permission to reveal its number. (“I’m going to ask both sides if you would agree to let me disclose your number to the other side, on the condition that they authorize me to tell you theirs.”) If the parties agree, the effect is a large simultaneous jump that significantly narrows the gap.

The Confidential Listener tactic is not designed to produce immediate settlement and rarely does that. But it often succeeds in cutting through much of the posturing, giving everyone a better sense of where they really are and that a deal may be possible.