Don’t Mistake a Mediator’s Proposal for a Case Valuation
The mediation has lasted all day. The parties have moved considerably, but not enough. Conventional bargaining has run its course. Then the mediator offers one final possibility: a mediator’s proposal.
For attorneys, the immediate question is usually simple: Is the number acceptable?
ABA Formal Opinion 518 suggests that counsel should ask another question first: What, exactly, does this number represent?
Issued in October 2025, Formal Opinion 518 addresses the ethical obligations of lawyers serving as mediators. Among other things, it emphasizes that a lawyer-mediator does not represent either party, may not suggest that a proposed settlement is in a party’s best interest, and must be particularly careful not to make misleading statements in an effort to secure a settlement. At the same time, the Opinion expressly recognizes that mediators may provide legal information, discuss how a tribunal might decide factual or legal issues, and provide truthful information that helps parties make their own settlement decisions.
The Opinion has generated debate about whether it restricts the traditional mediator’s proposal. One prominent commentator, Jeff Kichaven, has argued that an independently selected proposal is no longer ethically permissible and that the mediator should propose only a number counsel have effectively vetted in advance. Others have strongly disagreed, noting that Opinion 518 never actually addresses the mediator’s proposal as a mediation technique and does not prohibit a mediator from identifying a number the mediator believes both parties might accept.
That debate is important to mediators. But for attorneys representing clients in mediation, there is a more practical lesson.
Opinion 518 provides a useful framework for understanding what counsel should — and should not — read into a mediator’s proposal.
A Mediator’s Proposal Is Not a Valuation of the Case
This may be the most important point.
Suppose the plaintiff's last demand is $1 million, the defendant's last offer is $500,000, and the mediator proposes $700,000.
It is tempting for each side to interpret the proposal as an evaluation of the merits. The plaintiff may conclude that the mediator thinks the claim is worth only $700,000. The defendant may conclude that the mediator believes it faces $700,000 of exposure.
Neither conclusion necessarily follows.
A classic mediator’s proposal is better understood as the mediator's assessment of a number that may be capable of producing agreement at that particular point in the negotiations. That judgment may incorporate the mediator’s evaluation of the case, but it can also reflect information that counsel does not possess: each side’s negotiating behavior, risk tolerance, emotional investment, business objectives, internal authority, litigation fatigue, nonmonetary concerns, and willingness to stretch to reach resolution.
That distinction becomes particularly important after Opinion 518. The mediator is not supposed to tell a party that acceptance is in that party's best interest. The ultimate valuation of the proposal remains the responsibility of the client, informed by counsel’s independent professional judgment.
For counsel, then, the useful question is not, “Does the mediator think our case is worth this amount?”
It is, “What information does this proposal give us about the possibility of settlement?”
Those are very different questions.
Do Not Confuse the Proposal With the Mediator’s Prediction
Opinion 518 specifically permits a mediator to offer an opinion about how a tribunal is likely to resolve a legal or factual issue. But the Opinion draws a line between providing that evaluation and telling a party that settlement is therefore in its best interest.
Counsel should make the same distinction when receiving a mediator’s proposal.
A mediator may have spent hours discussing weaknesses in a dispositive motion, problems with a witness, uncertainty over damages, appellate risk, or the likely reception of an expert. Those observations may properly inform counsel’s assessment of the case.
The mediator’s proposal is different.
The proposal may account for those risks, but its purpose is ordinarily not to announce how the mediator believes a judge, jury, or arbitrator will rule. Its purpose is to identify a possible settlement point.
That distinction also means counsel should resist asking the mediator the wrong question: “Do you think my client should take it?”
That puts the mediator in precisely the territory Opinion 518 cautions against. Better questions are: “What does your proposal represent?” “Is the number intended as an assessment of settlement potential rather than case value?” or “Are there particular litigation risks you think we should reconsider before responding?”
Those questions preserve the proper division of responsibility. The mediator supplies information and perspective. Counsel advises the client. The client decides.
Listen Carefully to How the Proposal Is Presented
Opinion 518 also gives attorneys something of a checklist for evaluating the proposal itself.
A well-constructed mediator’s proposal should make clear what the mediator is — and is not — communicating. Counsel should be wary if the proposal is framed as “fair,” as what a party “should” accept, or as being in a party's “best interest.” Those formulations begin to blur the line between neutral assistance and advice to a party.
By contrast, language explaining that the proposal represents a settlement point the mediator believes both parties may be willing to accept is much more consistent with the neutral’s proper role.
The distinction is not merely semantic.
A mediator who says, “This case should settle for $700,000,” conveys something quite different from a mediator who says, “Based on the negotiations, $700,000 is a number that may provide a path to agreement.”
The former sounds like adjudication or valuation. The latter describes an effort to facilitate settlement.
Opinion 518 makes that distinction more important.
Pay Attention to What the Mediator Says About the Other Side
Another significant feature of Opinion 518 receives less attention in the debate over mediator proposals.
The ABA concluded that lawyer-mediators do not enjoy the same freedom to engage in negotiation “puffery” that advocates sometimes possess. Because parties reasonably tend to trust statements made by a neutral, a mediator may not knowingly embellish the opposing party's position or give credibility to a statement the mediator knows is false.
Thus, a mediator who has simply been instructed to communicate that an offer is “final” should not transform that message into an independent assurance that “they absolutely will not pay another dollar.” Opinion 518 specifically warns against an untrue statement that an offer is the best the opposing party will make.
That matters when evaluating a mediator’s proposal.
Counsel should distinguish between information attributed to the opposing party and the mediator’s own judgment. “Defense counsel tells me they have reached their limit” is different from “There is no more money.” Likewise, “Plaintiff says this is the lowest number she will consider” is different from the mediator personally vouching for the statement.
When the distinction is unclear, ask.
A proposal can contain valuable information without requiring counsel to treat every statement surrounding it as an established fact.
Do Not React to the Number Before Evaluating the Decision
Mediator proposals can produce powerful emotional reactions.
A plaintiff who has spent the day explaining why a claim is worth $2 million may regard a $900,000 proposal as proof that the mediator “didn't listen.” A defendant that has spent hours explaining why it believes it will prevail may view the same number as evidence that the mediator has “gone over to the other side.”
Those reactions are understandable. They are also usually unhelpful.
Negotiation research has repeatedly demonstrated the influence that numerical anchors can exert on judgment. That is another reason counsel should consciously separate the mediator's number from the mediator's perceived endorsement of that number. A mediator’s proposal deserves serious consideration because it may contain useful settlement information, not because the neutral has somehow transformed the proposal into the objectively correct value of the dispute.
Instead of debating whether the mediator's proposal “proves” that one side's evaluation was right or wrong, counsel should return to the decision the client actually faces.
What is the probable range of outcomes if the case continues? What additional attorneys' fees and expenses will be incurred? How long will resolution take? What are the risks associated with dispositive motions, trial, arbitration, collection, or appeal? What business disruption, management time, reputational considerations, or other costs accompany continued litigation? And what does the client gain from finality today?
The proposal is then compared with the alternative — not with the client's opening demand, the opponent's opening offer, or an abstract conception of victory.
That is settlement analysis.
The Empirical Evidence Says the Proposal Deserves Serious Consideration
Mediator proposals are not merely a theoretical mediation technique.
A 2015 empirical study by Daniel and Lisa Klerman examined more than 400 employment mediations based on contemporaneous mediation records. Mediator proposals were used in almost 90% of the cases. When a proposal was used, the reported settlement rate exceeded 99%. The study also identified an important reason the technique can work: confidential responses allow each side to indicate willingness to settle without revealing that willingness to the opponent unless both parties accept.
The numbers require caution. All of the cases involved one mediator, largely in one practice area and geographic region, and the mediator understandably made proposals primarily when she believed they had a meaningful chance of succeeding. The study therefore does not establish that issuing a proposal causes a 99% settlement rate. The authors expressly recognize those limitations.
Still, the results are difficult to dismiss.
Separate survey research published by the ABA provides another useful perspective. In a survey of 167 mediators from 30 states, 84% reported having used mediator proposals. Among those with more than 500 mediations of experience, the figure rose to 94%. Respondents reported an average proposal acceptance rate of 73%.
Perhaps more interesting for attorneys, nearly 70% of respondents said they never or rarely included a reasoned analysis with their proposals. Many believed that extensive explanation could actually hurt settlement by reopening arguments over the merits that had already been thoroughly debated. Thirty percent also believed lawyers tend to request mediator proposals too early.
There is a practical lesson in those findings.
Counsel should not mediate toward a mediator’s proposal. The goal remains negotiated resolution. A proposal is most useful when the parties have exhausted productive bargaining and the mediator has accumulated enough information to identify a plausible landing point.
Likewise, counsel should not automatically demand a judicial-style explanation for the number. Sometimes the absence of an elaborate explanation is a feature rather than a defect. The proposal may be intended to answer only one question: Is there a number at which both sides will say yes?
Use Opinion 518 as a Tool, Not a Weapon
There may be occasions when a mediator’s presentation strays from the lines drawn by Opinion 518. Counsel should recognize those situations, particularly when the mediator appears to be advising the client about its best interests, embellishing another party’s position, or presenting a proposed number as something it is not.
But the first response need not be an ethics objection.
Often, clarification is enough.
Ask what the proposal represents. Ask whether a statement reflects information supplied by the other side or the mediator's own assessment. Ask whether the mediator is expressing an opinion about litigation risk or merely identifying a possible settlement point.
Then bring the decision back where it belongs — to lawyer and client.
Opinion 518 does not make mediator proposals less useful. Properly understood, it may make them more useful by forcing everyone involved to be clearer about their respective roles.
The mediator's job is not to decide whether the proposal is in the client's best interest.
The lawyer's job is not to accept or reject the proposal simply because the mediator made it.
The mediator supplies another piece of information at a critical point in the negotiations. Counsel must place that information alongside the law, the facts, the economics, the risks, and the client's objectives.
And then the client decides.
That is not a limitation on mediation. It is exactly how mediation is supposed to work.
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