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Bracketing As a Means of Avoiding Impasse at Mediation
by: Bob Stripling
At the beginning of the mediation process the settlement positions of the parties are invariably at opposite ends of the spectrum. In the early stages, no one wants to give much ground or reveal their bottom line, for fear of being undercut. This often results in discouragement and distrust on both sides.
Typically plaintiff’s opening demand is viewed as unrealistic by the defense. This causes the defense to counter with an equally unreasonable offer, designed to “send a message” to the plaintiff. As a mediator, I frequently hear both sides begin to posture, sometimes with threats that it will be a short mediation if the other side doesn’t begin to get realistic. What ensues from that point is a series of minuscule moves on the part of both parties. Hours can pass with very little progress, engendering greater discouragement, and often anger. When this occurs, the mediator is put in the position of having to do all he can just to keep the parties there, and make whatever meager progress can be made.
When the parties get this bogged down, it is clear that the mediation is going nowhere unless a different approach is taken to break the impending impasse. The issue becomes how to narrow the range between these divergent positions. This is where “bracketing” can be helpful as a tool to get parties in a realistic zone where settlement may be possible. Bracketing is a method of negotiating the ranges. It occurs when one party proposes that he will move to a certain position, if the other party will reciprocate by moving to a different position that brings the parties closer together. For instance, let’s assume that plaintiff’s opening demand was $500,000, and the defendant responded with an offer of $50,000. The negotiations sputter along, with each side making several small moves which result in the plaintiff being at $480,000 and defendant at $55,000, after a couple of hours of both sides moving at a snail’s pace.
At this point, the mediator might encourage the defense to propose a bracket to the plaintiff. In our example, the defendant proposes that he will move to $100,000 if the plaintiff will correspondently move to $250,000. At this point, several options are available to the plaintiff. He may choose to accept the defendant’s bracket of $100,000 to $250,000. Alternatively, he can propose a new bracket or move back to demanding hard numbers. Let’s assume he proposes a new bracket which would, of course, be in a range more favorable to his position. For example, he might propose he will go to $400,000 if the defense will move to $200,000.
By comparing the numbers before bracketing started with the new brackets, it is clear that the parties are already beginning to make progress by bracketing. Before bracketing, plaintiff was at $480,000 and the defense was at $55,000, making the difference between the two positions $425,000. However, after bracketing started, both sides moved substantially closer to each other, even though neither side has accepted the other’s bracket. The defense bracket would put the parties $150,000 apart and the plaintiff’s bracket would put them $200,000 apart.
The numbers that each side was willing to propose begin to tell the story about where they really believe the case could settle. Both the mediator and the parties may want to look at the mid-point of each party’s proposed bracket. To arrive at the mid-point of the defense bracket, you would add $100,000 and $250,000, giving a total of $350,000, then divide that number by two, getting a mid-point of $175,000. The same can be done with the plaintiff’s bracket by adding $200,000 and $400,000, equaling $600,000, then dividing that number by two, to arrive at a mid-point of $300,000. Now the parties’ positions are much closer. When reading the numbers, each side has sent the other a signal about where he or she believes the case could really settle.
Although “mid-points” give an indication of where each side may believe the case could settle, it should not necessarily be interpreted as the number where that party would be willing to resolve the case. However, it is the best information that the parties have about where each other are willing to go. Therefore, brackets can produce very valuable information for both sides. What each side does with that information is obviously critical. The options may include continuing the bracketing process, in an attempt to close the gap. Alternatively, the parities could revert to hard numbers.
In most cases, the defense has evaluated the case before it comes to mediation, and has a firm idea about how much it is willing to pay in order to settle the case. It is the task of the plaintiff to find out what that number is by continuing to negotiate towards that point. Sooner or later, each side will invariably discover where his opponent is willing to go. From there, the parties need to see if they can bridge the gap through continued negotiations, or simply walk away. Most often, with the help of the mediator, the parties are able to reach a resolution.
Bracketing has proven to be a very effective tool for getting the parties into a range of numbers where settlement can be achieved. Through negotiating the ranges, the parties are often able to ultimately reach a settlement during the mediation process.