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Bracketing Can Break Impasse in Negotiation

by Brian R. Jerome, Esq.

Whether parties are negotiating directly with each other or with the assistance of a mediator, a basic axiom is that a case will not settle until the parties are discussing terms within a reasonable settlement range.  When negotiations reach a critical impasse, the possibility of settlement steadily decreases as the time without demonstrable progress continues to pass.  This is particularly true in situations where the demand (or offer) made may be deemed unreasonable by the other side, resulting in an equally unreasonable counter proposal.  When parties reach impasse, they begin to abandon hope.  In such situations, breaking impasse is perhaps the most essential achievement a mediator can make; finding common ground keeps the interest and attitude of the parties focused on resolution and promises a better likelihood of settlement as an incentive to continue negotiating.  Bracketing, one of the many specialized tools in a skilled mediator’s arsenal, can be a helpful tool to jump-start the process and break an impasse in settlement discussions.  Bracketing can make bridging the divide seem possible again, and encourages the parties to continue negotiating.

For example, consider the case where the parties come to mediation and the plaintiff makes an initial settlement demand of $850,000.  The defendant, though having significant more settlement authority and/or willingness to move upward, may deem this demand unreasonably high and choose to make an in-kind, unreasonably low settlement offer of $50,000.  Hearing this, the plaintiff is immediately upset and frustrated:  “Why did we come to this table?  I have a lien three times that amount to satisfy!”  The plaintiff may then elect not to move, or move minimally, perhaps to $825,000.  Continuing this water torture approach to negotiation or mediation can result in significant frustration, and often emboldens further posturing – none of which lend to the collaboration and momentum parties need and a mediator seeks to resolve a case.

A skilled mediator by this point has likely gone well beyond an initial joint session with the parties and has been engaged in private caucuses with both sides.  S/he has begun to develop a sense of the needs and interests of both sides and by doing so, over time, likely begins to envision a range or window through which it is likely that both sides need to enter into for more fruitful discussions to begin.  In some cases, a party may elect to confidentially divulge to their mediator, hypothetical  lesser amounts or ranges that they may be willing to consider.  Being careful not to disclose these confidences, nor to prematurely provide their own evaluation which could prove counterproductive, an experienced mediator might suggest and begin to sculpt a process of bracketing that could revive the negotiation process, provide some optimism for the participants, and return some momentum to the session.

During private caucus, when the mediator makes a request to more significantly increase their offer, this defendant may indicate that if they were to raise their offer to $200,000 or $250,000 – which they might be willing to do at some point – they feel the plaintiff is likely to only reduce their demand by another $50,000 or so.  The defendant doesn’t want to be left in that negotiation position.  A mediator may ask where the plaintiff would need to be for the defendant to offer $250,000.  If they indicate $650,000, the mediator might ask for the defendant’s authority to propose these numbers as brackets, coming from the defense.

A mediator may inquire to a defendant who may be reluctant to disclose their own parameters, whether if the plaintiff was willing to reduce their demand to $650,000, would the defendant be willing to offer $250,000?  The mediator might stress to the defendant that should these brackets be found unacceptable by the plaintiffs, they often either result in a demand or a counter bracketing proposal that nevertheless will be more productive than making a single low offer.  Further, it could be suggested that if the plaintiff found this bracketing proposal unacceptable, the defendant could return to making a single offer at a level of his choice.

Though a bracketing proposal may often signal, or be perceived to signal, a willingness to reach the middle of these brackets, it does not necessary mean this.  Although such flexibility may be one of its advantages, as long as each party can settle this case at a number within these parameters, they may be inclined to assent to the bracket so as to take advantage of the momentum created by it.

After a bracketing proposal has been agreed to by both sides, the parties can return to negotiating by single offers or demands, or, can consider further bracketing to narrow their differences and reach a reasonable range of settlement.

Consider the use of bracketing to break an impasse in your direct negotiations with the other party – or better yet – have a capable mediator with knowledge and experience in this process help you sculpt your negotiations more effectively.  Remember that the numbers need to be a realistic reflection of the risks and realities of the case, and to give the other side time to gradually accept that their hoped-for, pre-mediation position may not be achieved.  Your mediator can assign rational reasons to the relative bargaining positions of the parties, and with his/her guidance, you can greatly enhance the prospects of resolving your more difficult cases.