Mediation – Do Not Give Up Too Soon

In a recent real estate mediation, the parties were extremely far apart in settlement. Plaintiff had an opening settlement demand in the range of seven figures while defendants’ insurance carrier had the case valued in the low six figures. After the parties exchanged their opening numbers, plaintiff made what he thought was a substantial move by lowering his demand to the mid-six figures. Defendants were not at all impressed by plaintiff’s “substantial” move and wanted to terminate the mediation right there and then.

I explained to defendants that if the parties had room to move there was no need to terminate the mediation prematurely. Of greater concern, I told defendants that it was unfair to terminate the mediation before clearly communicating to plaintiff what dollar range they needed to be at for settlement to be possible. Thankfully, defendants took my advice and countered what they believed was plaintiff’s sky-high number while also clearly communicating to plaintiff the settlement range required for defendants to continue the mediation.

Plaintiff took defendants words to heart and made another substantial settlement move down. While plaintiff remained above defendants’ range, he had moved sufficiently to prove to defendants that settlement during the mediation was possible.

With trust restored, the case settled for less than what plaintiff hoped to obtain but more than the amount that defendants had originally valued the case. The bigger lesson learned is to never leave mediation before clearly communicating what it will take to settle the case. It takes work to settle, and it is important to continue that work until the job (the settlement) is complete.