Trying to Determine Value in Mediation

All too often, parties in a mediation allow the opposing party to determine the value of the claim at hand. The logic of this has always escaped me — either as an advocate or a neutral. It seems that many parties (or their counsel) are unable to value a claim on their own. Sometimes they’ll grab a pie in the sky number and hang on to it despite all indications to the contrary or sometimes they will dismissively value a claim at such a low number that it is a practical impossibility to back away from that paltry number. Both of these examples show failure to properly value a claim.

Harvard Law School’s Program on Negotiation, in a great discussion contrasting integrative and distributive negotiation styles, draws on writings out of Northwestern University to illustrate how to value claims coming into a mediation.

While most practitioner are aware of BATNA (Best Alternative to a Negotiated Agreement) or WATNA (Worst Alternative to a Negotiated Agreement), few consider them in their claim analysis prior to mediation. Even fewer think about the opposing side’s BATNA & WATNA.

But most practitioners don’t give thought to the ZOPA (Zone of Possible Agreement) as part of their analysis. While strong mediators will lead parties to do this analysis during a mediation, strong counsel will do it in advance of mediation and in conjunction with their clients. Doing so dramatically increases the chance for success at the mediation conference.