ABA Formal Opinion 518: Parsing the Results of ADR’s Rorschach Test

ADR is in need of a mediator. In October 2025, the ABA Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 518 (“FO 518”). Within the ADR community, FO 518 has sparked spirited debate. In stark contrast, its existence is largely unknown to the lawyers who use ADR services.

This article summarizes FO 518 and the key points of disagreement among mediators in response to it. The ABA’s opinion has become ADR’s Rorschach test in which people, this author included, see in it what they want. The disagreements over FO 518 should not be viewed in a vacuum. They arise from longstanding, general theoretical debates within the ADR bubble that, like FO 518 itself, are largely unknown to the rest of the legal community. While some commentators argue that FO 518 was a necessary, watershed moment for a flawed ADR system, others see it as a gradual step in ADR’s ongoing evolution toward ethically satisfying the expectations of lawyers and consumers of ADR.

While I disagree that FO 518 was intended to fix a broken mediation system, it serves as a reminder that mediators and attorney advocates view mediation differently. The resulting dialogue should help us remember that the goal is to assist clients in resolving their disputes. To best achieve that, lawyers and mediators alike must understand their roles and take affirmative measures to fulfill their ethical obligations. In a perfect world lawyers would not tolerate abusive practices by mediators and would be more proactive in investigating mediators’ styles and philosophies.

Background on Mediation Guidelines and the Issuance of FO 518

FO 518 is meant to provide attorney-mediators with guidance on their ethical obligations. Mediation oversight is a patchwork of various statutes and standards that vary from state to state and is complicated by the fact that attorney-mediators are also subject to ethical standards applicable to lawyers. For example, your author is licensed to practice law in Illinois and Texas. Illinois is one of 13 states that have adopted the Uniform Mediation Act.^[2] Texas is not, because as a leader in ADR, it had already adopted its own ADR statute in 1987.^[3] The Texas Supreme Court adopted Ethical Guidelines (“Guidelines”) for Mediators that were promulgated by the ADR Section of the State Bar of Texas. Furthermore, mediators can join the Texas Mediator Credentialing Association (“TMCA”). TMCA credentialed mediators (like me) have agreed to be bound by the TMCA Standards of Practice and Code of Ethics, which are essentially the Guidelines with the exception of replacing permissive suggestions (i.e. should) with more mandatory language (i.e., shall).^[4]

The purpose of this article is not to exhaustively summarize and analyze all the various standards and procedures, let alone how they are enforced.^[5] Again, lawyers seem uninterested. I have never been asked whether I am a TMCA-credentialed mediator, and many Texas mediators are not. Regardless, with important nuances, mediation guidelines contain essentially the same foundational principles. First, mediation is a voluntary process governed by the parties’ self-determination. Parties to mediation should embrace it as an opportunity to take control of their destinies and craft a resolution that they—not a judge, jury, or mediator—agree is in their own best interests. Second, the mediator is impartial. The parties must trust that the mediator will oversee a fair process and not put her thumb on the scale in favor of one party or outcome. Finally, mediations are confidential. Confidentiality promotes an atmosphere conducive to frank discussions without fear of losing leverage in litigation.^[6]    

Where do formal opinions by the American Bar Association fit in? Because the ABA is a well-respected entity, its opinions are strongly considered. While advisory in nature, they can be cited in disciplinary actions.^[7] State-specific mediation standards are similarly consulted by courts and disciplinary boards.^[8]  

So, what is it about FO 518 that has caused so much debate within the ADR community? As an initial matter, the opinion:

(1) Outlines the duties of the lawyer-mediator to fully explain their role under ABA Rule of Professional Conduct Rule 2.4 to non-represented parties; (2) Stresses that mediators must avoid making statements that imply they are seeking to achieve a party’s best interests; and (3) Applies a higher ethical standard with respect to honesty and misrepresentations to the attorney-mediator relative to attorney-advocates.

On its face, it is surprising that FO 518 has spurred such strong reactions. The most significant controversies involve why FO 518 was issued and whether and how a mediator’s proposal can ethically be used.

A Closer Look at FO 518

Before discussing the various positions taken by commentators, this article analyzes FO 518’s specific opinions in greater detail.

Duties Under Model Rule 2.4 to Ensure Unrepresented Parties Understand the Mediator’s Role

The most difficult ethical situations for attorney-mediators involve cases with unrepresented parties. The first part of FO 518 expounds on Model Rule 2.4 of the ABA Model Rules of Professional Conduct, which requires attorney-mediators to inform unrepresented parties that the mediator does not represent them. I begin all my mediations, especially my pro bono ones, by noting that “I am a lawyer, but I am not your lawyer.” FO 518 suggests that might not be enough and that, throughout the entire process, the attorney-mediator must be vigilant in ensuring that unrepresented parties fully understand the mediator’s role.

Specifically, FO 518 stresses that the mediator should elaborate that since she is not the party’s attorney, she “is not seeking to protect the party’s best interests.”^[9] Citing Comment 3 to Model Rule 2.4, FO 518 makes clear that nuances like the lack of the creation of an attorney-client privilege must be spelled out to unrepresented parties.

The Duty to Avoid Statements That Imply the Lawyer-Mediator Is Not Neutral but Is Seeking to Achieve a Party’s Best Interest

Section II begins by noting that while the party’s attorneys must act in the client’s interest, “the lawyer-mediator’s role is to assist the parties in resolving their dispute, regardless of where the interest of a party may lie.” Id. at 3. FO 518 seeks to clearly delineate the roles of the attorney-mediator and counsel for the parties.

As discussed below, some commentators view the role of a mediator more broadly not only to assist the parties in reaching an agreement, but to assist them in reaching an equitable agreement. FO 518 reaches the conclusion that the mediator should not be focused on the parties’ interests because the attorney-mediator must be vigilant throughout the process “to avoid creating the impression that the lawyer-mediator will be providing the protections of the client-lawyer relationship.” Id. This focus on the absence of an attorney-client relationship means that the mediator should not state that she “is acting to achieve a party’s best interest or that a proposed settlement is in a party’s best interest.” Id.

FO 518 attempts to help mediators know where to draw the line between facilitating settlement discussions and improper conduct by explicitly confirming what mediators can ethically do:

The lawyer-mediator may, of course, provide truthful information that helps the parties to conclude for themselves, or even makes it obvious to them, whether a proposed resolution is in their best interest, given their objectives.

Id. Along these lines, FO 518 explicitly states that “it is not misleading” for the attorney-mediator to “provide legal information or to discuss the parties’ respective views of how a tribunal would resolve a legal or factual question.” Id. Thus, a mediator can provide facts, opinions and insights as to why a party may ultimately make its own determination that an offer is in its best interests, but the ultimate decision should be made by the party and their lawyer.

As stated above, two fundamental tenets of mediation are the self-determination of the parties and the impartiality of the mediator. Mediation is a voluntary process, and settlement agreements should be the expression of the parties’ compromises and not the byproduct of coercion by the mediator. Thus, FO 518’s prohibition on a mediator telling a party that settlement is in their best interest is consistent with these key principles.

Critically, in order to obtain the trust of the parties, the mediator must be viewed as acting impartially. Prior to FO 518, the Honorable Thomas R. Mulroy (ret.) wrote, “a mediator expressing his/her opinion as to the strength or weakness of a party’s legal position will hurt his/her neutrality and the discussion will do nothing to lead to a successful result.”^[10] Mulroy counsels that the mediator “must be careful to avoid giving an opinion on the legal or factual merits of the dispute because that will adversely impact the mediator’s aura of neutrality which is the key to his/her effectiveness.” Id. I wholeheartedly agree that a mediator must be vigilant to make sure that she is perceived as being neutral. However, as a counterpoint, in my article “Discussing the Merits Meets Expectations and Allows for People to Feel Heard,” I argue that mediators should discuss the merits of a case when the parties consent and expect them to do so.

FO 518 expressly permits a mediator to discuss the merits and even provide an opinion on how a court might rule. I mention my “debate” with Judge Mulroy not to gloat that the ABA sided with my position (although I understand I run the risk that it will come across that way), but rather to note: (1) that prior to FO 518 the mediation community had already been struggling with how to balance evaluative mediation techniques (such as discussing case law and making predictions concerning how the court might rule) with notions of self-determination and neutrality; and (2) FO 518 was issued by ethicists understandably focused on advising attorney-mediators how to avoid ethical pitfalls related to the attorney-client privilege and not necessarily how to best provide mediation services.^[11]

Circling back to FO 518’s express endorsement of mediators discussing the merits of a case, it draws the following (fine) line:

A mediator may offer an opinion as to how a tribunal is likely to rule on an issue, but the lawyer-mediator should not state or imply that a settlement is in the party’s best interest because a tribunal is likely to decide adversely to the party.

So, a mediator can ethically say, “I think Judge Jones will grant their summary judgment,” but cannot say, “It is in your best interests to settle this case for $100 because Judge Jones will grant their summary judgment.” It is a subtle distinction and potentially confusing in light of the fact that, as already noted, the mediator is allowed to provide “truthful information” that makes it “obvious” to the party whether they should settle. As a practical matter, I struggle with how a mediator can provide opinions as to how she believes a tribunal will rule and other information that makes it “obvious” to the party that settlement is in their best interests, but somehow not fall into the category of “implying” that the offer is in their best interests. Ellen Waldman agrees that FO 518’s distinction between offering legal information and providing legal advice “is not uniformly defined or understood.”^[12] Another commentator notes that “this ambiguity regarding what constitutes legal advice may create a risk for mediators that provide predictive analysis or legal evaluations.”^[13]

Why formalistically bar the mediator from connecting the dots and saying, “I think settling is in your best interests because the other side has the better argument”? Because the parties—and not the mediator—need to make that decision. Moreover, as discussed more fully herein, the focus of FO 518 is on helping attorney-mediators avoid ethical traps and not on philosophical and practical issues concerning effective mediation.

Thus, in this light, FO 518 can be seen as attempting to draw a bright line in order to help an attorney-mediator avoid unintentionally wading into the attorney-client relationship. The only person who should tell a party that settlement is in their best interest is their own attorney. However, the attorney-mediator is allowed to express opinions and facts that help the parties make their own decisions. 

The Lawyer-Mediator’s Duty to Avoid Dishonesty, Fraud, Deceit, and Misrepresentation When Communicating with the Parties

The final section of FO 518 addresses the different standards concerning honesty that apply during negotiations. Attorneys representing a party have more leeway than the mediator. Rule 8.4(c) of the Model Rules of Professional Conduct prohibits all lawyers from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation. As an initial matter FO 518 clarifies that even though attorney-mediators do not represent clients during mediation, Rule 8.4(c) applies to their conduct.

Negotiations typically involve posturing, puffery and bluffing. It is not uncommon to find out that a party misrepresented its “bottom-line.” In fact, it is expected. Does this mean lawyers are constantly violating their ethical duties during negotiations? No. Rule 4.1 forbids an attorney “[i]n the course of representing a client” from “making a false statement of material fact or law to a third person” (emphasis added). However, statements made during negotiations, even if exaggerated, are not considered statements of “material” fact. Comments and prior formal ethics opinions had clarified that statements regarding settlement intentions, negotiation goals or willingness to compromise are not considered material for purposes of the rules. A party can bluff its bottom-line or overstate the strengths of its arguments and value of its case. However, the attorney-mediator must play it straight. As FO 518 states:

A lawyer-mediator does not have the same leeway as a lawyer negotiating for a client, however, because a lawyer-mediator does not represent a client in the mediation but serves as a third-party neutral under Rule 2.4.^[14]

Because the mediator serves a different role than an attorney for a party, Rule 4.1’s “materiality” requirement does not apply. The mediator is held to a higher standard. Parties are entitled to expect that the mediator will not engage in puffery or exaggeration.

Let’s take the following example. A party tells the mediator, “I will take $90, but tell them they need to come up with $100.” FO 518 instructs that it would be improper for the mediator to affirmatively state, “$100 is the lowest the other side will take.” FO 518 deviates from a prior opinion, Formal Ethics Opinion 06-439, which in a footnote stated, “in our view, Rule 8.4(c) should not impose a more demanding standard of truthfulness for a lawyer when acting as a mediator than when representing a client.” Id. at n. 9. FO 518 disagrees and does impose a higher standard, but provides some additional guidance by noting the mediator can communicate statements made by the other party during caucus “as long as the lawyer-mediator makes clear the origin of such statements and that the statements do not represent an opinion of the lawyer-mediator.” Id. In other words, in our hypothetical, the mediator can say, “The other side is saying that they need $100.”

Controversy in the ADR Community

While the vast majority of attorneys have never even heard of FO 518, there has been robust debate within the ADR community about two issues: (1) why it was issued; and (2) whether mediator’s proposals are unethical.

Did the ABA Issue FO 518 Because ADR Is Broken?

Jeff Kichaven is a thought leader in ADR. He often takes provocative positions that force ADR professionals to reconsider assumptions.^[15] He is a frequent commentator about mediation ethics, and I have been fortunate to sit on a panel with him. In response to FO 518, Kichaven wrote, “The American Bar Association would not publish a major ethics opinion on mediation unless something in our field had drifted badly off course.” Kichaven further laments that “the mediation field had been flooded—and I use that word deliberatively—with retired judges and aged out partners who enter mediation without ever mastering it as a discipline.” Kichaven complains that “very few” of these new mediators “become true students of the game” and declares that the odds of any of them becoming “a genuinely excellent mediator” is “as common as Athena springing fully formed from the brow of Zeus.”^[16] You do not need to be an expert in Greek mythology—and I am not—to understand that Kichaven has serious issues with the current state of ADR.

But was FO 518 really issued because something is rotten with ADR? There is no evidence that the Committee on Ethics and Professional Responsibility issued its opinion out of concerns that ADR had drifted badly off course. I am the Chair of the Dispute Resolution Committee for the TIPS Section of the ABA and was at the time FO 518 was issued. I also serve as a liaison to the ABA Dispute Resolution Section. I am not suggesting that the authors of FO 518 should have reached out to me if they harbored the concerns Kichaven attributes to them (I am self-aware enough to understand that I am not that important), but I am not aware of any of my ADR colleagues within the ABA who were consulted. More importantly, there is a bit of irony in Kichaven’s complaints about ADR being flooded by lightly-trained, newer mediators while simultaneously suggesting that the 10 authors of FO 518—none of whom are mediators—are somehow qualified to fix ADR.

Kichaven’s articles began a spirited dialogue. Many, if not most, ADR specialists disagree with Kichaven’s diagnosis. Scott Hecht feels Kichaven’s grievances smack of “gatekeeping” and that, on balance, FO 518 leaves “plenty of leeway for capable mediators to exercise their own style and discretion in helping parties resolve disputes.”^[17] Steven Greenspan agrees, noting that “Opinion 518 reflects a logical and restrained application of existing ethical rules.”^[18]

Ellen Waldman places FO 518 in a larger historical perspective. While not addressing Kichaven’s ADR critiques directly, her assessment is that ADR is in transition and attitudes toward it are evolving. Specifically, in discussing the dichotomy between the prohibition on providing legal advice and the express authorization of predicting legal outcomes, Waldman suggests the “goalposts are moving.” Specifically, she discusses earlier rules in North Carolina and Virginia that expressly prohibited mediators from predicting how a legal issue would be resolved. In discussing how FO 518 is more permissive of mediator input and predictions, Waldman notes, “one might sensibly ask what work the prohibition against legal advice is doing.” The tortured attempt to draw bright lines leads Waldman to suggest that what is going on is that the ADR community has struck compromises “to encourage informed party deliberations and respond to market demands for mediator input and evaluation.”^[19]

At the beginning of this article, I noted that lawyers are generally unaware of FO 518. When I practiced law, I was trained to mediate by my partner and clients. Mediation was what they said it was. I had a national litigation practice. While I always researched local court rules, I admit I failed to do the same with respect to mediation rules. Lawyers view mediation differently than mediators. Lawyers see mediation as a tool to help them resolve pressing cases. They want results. They expect action. A common refrain is that they are not paying a mediator to simply shuffle numbers back and forth. According to an ABA Task Force, 84% of users (attorneys and their clients) said in most cases it would be helpful for a mediator to recommend a specific settlement, while only 18% of mediators said the same.^[20] Why the difference? Mediators are justifiably concerned that introducing their own recommendations concerning how a case might be resolved might cause one or both parties to no longer see them as neutral. On the other hand, lawyers are open to evaluative methods that help them resolve cases.

Rorschach Analysis and Views of the Mediator’s Role

This article asserts that FO 518 is ADR’s Rorschach test. As stated above, there is no evidence to support Kichaven’s conclusion that the ABA issued FO 518 because something is wrong with mediation. I acknowledge, however, if you stare at FO 518 long enough you can see why Kichaven might interpret FO 518 as a shot across the bow of the “silver tsunami” of new mediators. First, prohibiting mediators from telling a party they need to settle because the mediator knows (better than they do) how the judge will rule sounds like a tactic used by retired judges and senior attorneys who might not fully appreciate their new role. Moreover, the clarification that mediators must adhere to higher ethical standards than attorneys could arguably be seen as directed at retiring/transitioning attorneys who still litigate on Mondays and serve as the mediator on Tuesdays. FO 518 reminds them that when they wear different hats, they have different ethical responsibilities.

I agree with Hecht that some of Kichaven’s opinions smack of “gatekeeping” and give off a “get off my lawn” vibe. I personally do not believe mediation is broken, but abuses happen. Rick Alimonti anecdotally noted that he has had mediators foist unsolicited proposals mid-mediation.^[21] However, notions of confidentiality and finality make it extremely difficult to determine how widespread improper mediation tactics might be and, as seen below, courts are loath to draw back the curtain to reveal what happens during mediations.[22]

To become a certified mediator most states require completion of a 40-hour mediation course. I satisfied that requirement by taking the Illinois State Bar Association mediation course. When I moved to Texas, I needed to take a supplemental Texas course and TMCA mediators also have annual supplemental educational requirements. In my Texas class we discussed Allen v Leal, 27 F. Supp. 2d 945 (S.D. Tex. 1998), a case involving an unsuccessful attempt to set aside a settlement due to alleged coercion by the mediator. Allegedly, the mediator, several times, said (incorrectly) that the plaintiffs would be “financially ruined” because they would have to pay the other side’s attorney’s fees. The Association of Attorney-Mediators filed an amicus brief and its President of the Houston Chapter was quoted in the press as saying, “what some people might consider a little bullying is really just part of how mediation works.” Id. at 947. The Federal Court stated its belief that the “overwhelming majority of mediators in Texas” and the nation rejected the statement. The Court did so as well in no uncertain terms:

This egregious statement, directed to the public, made by the president of the AAM, outside of the courtroom and in a local newspaper, is especially deplorable given that, pursuant to the standards governing the conduct of mediators in Texas, “[a] person appointed to facilitate an alternative dispute resolution procedure under this subchapter shall encourage and assist the parties in reaching a settlement of their dispute but may not compel or coerce the parties to enter into a settlement agreement.” Tex. Civ. Prac. & Rem. Code § 154.053(a) (Vernon 1997) (emphasis added). Coercion or “bullying” clearly is not acceptable conduct for a mediator in order to secure a settlement, notwithstanding the statement of the president of the AAM.

Id. at 948. However, the Court denied the Plaintiffs the relief they sought noting, “The Court is gravely concerned with the plaintiffs’ frontal attack on the mediation process itself” and noting that seeking to upset a settlement “appears,” “even if unintentional” to be an “abuse” of the federal trial process. Id. at 949.

The Court highlighted the plaintiffs’ attorney’s role and that “the Court has not been advised of any actions taken by counsel for the [Plaintiffs] to protect them against any untoward pressure allegedly exerted by the mediator or the defendants.” Id. The parties’ attorney should have provided clearer advice and should have pushed back against the mediator if there was any undue pressure. In fact, because of the stakes at issue, the Court said it was “perplexed” how the plaintiffs could have agreed to settle the case “even assuming arguendo that the mediator exerted pressure on the plaintiff to settle the case.” Id. With all due respect to the Court, this statement naively underestimates the potential power of a mediator.

Other Texas jurisprudence is consistent with the lack of desire to analyze what transpired during mediation. Counterintuitively, a trial court lacks the authority to order the parties to mediate “in good faith.” “An order requiring ‘good faith’ negotiation does not comport with the voluntary nature of the mediation process and [is] void.” In re Acceptance Ins. Co., 33 S.W.3d 443, 452 (Tex. App.—Fort Worth 2000, no pet.); Decker v. Lindsay, 824 S.W.2d 247, 250 (Tex. App.—Hous. [1st Dist.] 1992, no writ) (“[a] court cannot force the disputants to peaceably resolve their differences, but it can compel them to sit down with each other.”).

While I disagree with Kichaven concerning whether FO 518 renders mediator’s proposals unethical, I share his concern for ensuring that lawyers and mediators alike strive to make sure that settlements are the product of the parties’ voluntary decisions. Courts are unlikely to intervene. 

Mediation has always grappled with the mediator’s proper role. Russell Korobkin summarizes the traditional dichotomy between facilitative and evaluative mediators:

Among students of mediation, there is a split in opinion on the question of the proper role of the mediator. According to one view, often labeled ‘facilitative,’ mediators should remain somewhat aloof and detached from the content of the dispute, facilitating discussion between the parties but being careful to leave to the parties the task of fashioning a resolution of the dispute . . . .

In the alternative view, sometimes called “evaluative,” the mediator takes a more active role in resolving the dispute, not only facilitating communication between the parties but offering judgments about the dispute and perhaps substantive suggestions concerning resolutions, guiding them with a firm—although not coercive—hand towards settlement, at least in cases in which the mediator believes a bargaining zone exists.^[23]

Professor Leonard Riskin is widely credited with creating the nomenclature for the competing philosophies for mediators.^[24] However, since he coined “facilitative and evaluative” mediation, many ADR professionals and scholars, including Riskin himself, have questioned their utility.

The modern trend is for ADR specialists and professors to focus on a spectrum of mediation factors with “elicitive” and “directive” most closely aligned with the traditional facilitative/evaluative dichotomy. For perspective, Goldfien and Robbennolt identify the following mediator behaviors and qualifications as “elicitive:”

·         Whether the mediator asks clients to talk about their concerns and goals, encourages clients to speak for themselves, and encourages addressing issues beyond the legal causes of action.

·         Helps parties to understand each other’s perspective and encourages parties to assess strengths and weaknesses of their cases for themselves.

·         Does not primarily speak with the lawyers.^[25]

And the following factors are associated with “directive” mediators:

·         An emphasis on the mediator’s own knowledge, experience, and sense of

·         whether or how a particular dispute might or ought to be resolved.

·         The mediator presses for settlement, predicts court outcomes, proposes particular settlements, pushes parties to accept a specific settlement, and takes responsibility for the fairness of the settlement.^[26]

Thus, debate and disagreements over the appropriate role of the mediator are nothing new. Twenty years ago commentators noted:

Forgetting the irony and the dissonance between the mediation field’s purported adherence to celebrating diversity and the frequent rancor between adherents to the competing approaches, these conversations tend to denigrate into fruitless exercises that divide us unnecessarily.^[27] 

As Waldman stresses, FO 518 was written by ethicists who were not steeped in the theoretical disputes that have always been debated by mediators. If they had been, FO 518 would not have matter-of-factly said “of course” mediators could affirmatively provide truthful information and provide opinions on legal outcomes because many “facilitative” or “elicitive” mediators do not feel comfortable doing so.

Mediator’s Proposals

Kichaven has caused the most “rancor” with respect to mediator’s proposals. Mediators who utilize evaluative or directive techniques, as a matter of last resort, often make mediator’s proposals.^[28] The proposal is not meant to be the number at which the mediator independently evaluates the case. It is a number that during mediation both parties have stated they would reject, but represents the mediator’s assessment as the best chance for both parties to accept if they know it gets a deal done.^[29] The parties are free to reject the proposal and respond confidentially. Thus, parties only learn the other side’s response if everyone says “yes.” If a party rejects the proposal, they never hear the other side’s response.

Kichaven’s Case for Vetted Proposals

Prior to the ABA issuing FO 518, Kichaven wrote that “the Mediator’s Proposal is a tricky tool.”^[30] Kichaven correctly noted that if it fails “we’re up to our hips in trouble.” To avoid a potential impasse resulting from a rejected proposal, Kichaven suggested the mediator work with the parties’ attorneys in an effort to get their agreement to recommend a particular resolution before the mediator presents it. Later, he would call this the “vetted” mediator’s proposal. Kichaven asserted that a mediator’s proposal that comes from the mediator (i.e., unvetted) is “lacking both practically and ethically.” With respect to ethical duties Kichaven noted the mediator should not “decide unilaterally where the case should settle” and that lawyers have an ethical duty not to delegate their duty to provide competent representation to the mediator. Accordingly, Kichaven recommended that lawyers ask about a mediator’s approach to mediator’s proposals in advance of the mediation and specifically to inquire whether the mediator seeks permission before making a proposal and whether the mediator consults with the lawyers in advance. Id.    

Several months later, after the ABA issued FO 518, Kichaven had his Rorschach moment and declared his vetted mediator’s proposal the “only” ethically permissible approach.^[31] To Kichaven, “what Opinion 518 does, at its core, is strip away the habits into which mediators fall when they have not mastered the craft.” So the gauntlet was thrown—are mediators, like your author, who still believe that unvetted mediator’s proposals can be a useful and ethical tool of last resort simply misguided and have failed to master the craft?

FO 518 does not mention mediator’s proposals, yet Kichaven concludes, discussing his vetted approach, “What used to be the practical approach is now the only ethical approach as well.” Kichaven submits that because FO 518 bars a mediator from telling a party that a settlement is in their “best interests,” an unvetted mediator’s proposal involves unethically delegating responsibility for the final settlement number to a mediator who does not share the attorney’s undivided loyalty to her client. Next, Kichaven discussed the difficulty mediators face in recommending an unvetted proposal and concludes, “once a mediator chooses a non-midpoint number, neutrality is gone.” Thus, a proposal based on an “unvetted, pulled-from-the-ear, non-midpoint” number is unethical because Kichaven claims that, “[t]o choose a number, the mediator must believe it is equally good for each side.” Id. Finally, Kichaven believes that an unvetted mediator’s proposal fails because, when it lands, the party’s attorney cannot answer the question of whether the proposal “is the best I can do.”[32]

In Defense of the Unvetted Mediator’s Proposal

The majority of commentators disagree with Kichaven.^[33] Leslie King O’Neal describes Kichaven’s article as “blistering” and rejects his theory that a mediator’s proposal not at the midpoint violates a mediator’s neutrality as “too harsh an indictment.”^[34] Steven Greenspan writes, “Opinion 518 makes no reference to mediator’s proposals, and nothing about the practice inherently violates the mediator’s duty of neutrality or honesty.”^[35] Greenspan stresses that the parties are free to reject any proposal and, therefore, it does not “imply that the proposal is in any party’s best interest.” Another commentator notes, “The critical distinction lies between providing information that enables party self-assessment versus substituting the mediator’s judgment for the party’s own interest calculus.”^[36]

The question is not whether mediator’s proposals present ethical issues that all skilled mediators must consider. They do and advocates for mediator’s proposals have acknowledged as much. For example, Cheng and Coleman noted that a mediator’s proposal “encroaches upon party-self determination” and “can compromise mediator impartiality.”^[37] Rick Alimonti cautions “The mediator’s Proposal is nonetheless fraught with potential pitfalls and should be employed with these in mind.”^[38] However, they all believe that unvetted mediator’s proposals can still be an effective tool. The question is whether FO 518 mandates that the only way to ethically present a mediator’s proposal is to have previously obtained counsel’s agreement to recommend the terms. I side with the majority who disagree with Kichaven’s conclusion.

To be clear, guardrails need to be set to ensure that a mediator’s proposal is ethical. As a practical matter, the goal is to assist the parties in reaching an agreement without the need for a proposal. It may be a semantic point, but if attorneys for both sides agree on a number, they likely have not hit a potential impasse that creates the circumstances for making a proposal in the first place. A mediator’s proposal should only be an option when, after a full day of negotiations, there is still a gap between the parties and only when the parties agree it could be helpful.

Moreover, Kichaven builds a strawman. Just because in some cases the mediator is the party who suggests the final number does not mean that the parties who have accepted that number and independently concluded it was in their best interests have impermissibly delegated their ethical duties to the mediator. Furthermore, Kichaven’s argument that “to choose a number, the mediator must believe it is equally good for each side” was explicitly rejected by FO 518.

Every day during mediation parties agree to settlements that they believe are in their best interests. Rarely are these settlements “equally good” for each side. Sometimes a party settles toward the higher range of what they independently determine are acceptable outcomes and other times they settle on less favorable terms. The key is not that the parties are “equally” satisfied, it is that they both believe settlement at the agreed terms is in their best interests. Consider a hypothetical I have seen during a mediation ethics presentation by Rick Alimonti. In the first round of caucuses the mediator realizes that there is already an overlap—in other words the defendant is willing to pay more than the amount which the plaintiff would take to settle. Alimonti asks: What is a mediator to do? One option is to tell the parties and nudge them to settle at the midpoint so they can share equally in the settlement. Alimonti suggests, and I agree, that the more ethical approach is, in the words of FO 518, to “play it straight,” continue the mediation and allow the parties to continue negotiations and settle on whatever terms they ultimately agree. Simply put, it is not the mediator’s job to try to assist the parties in reaching an agreement that is “equally good” for each side.^[39]    

Whereas Kichaven argues unvetted mediator’s proposals are unethical because they are not equally good for each side, Waldman has a different complaint: “Opinion 518’s stark declaration that a mediator’s goal is to help the parties reach an agreement, irrespective of whether that agreement is in a (or either) party’s best interest does not sit comfortably. The opinion seems to consign mediators to the limited role of dispute settlement functionary, focused solely on closure regardless of consequence. The goal of achieving pareto-optimizing, interest-satisfying outcomes is reserved for parties and counsel.”^[40] To Waldman this creates an existential question for mediators. Is the mediator really limited to a mere functionary regardless of the party-dynamics? If one party has unequal bargaining power should a mediator still be agnostic with respect to the outcome?^[41] Those questions will likely continue to be debated, but Waldman’s keen observations underscore that FO 518 not only does not support Kichaven’s concerns that an unvetted proposal not at the mid-point is not “equally good,” for all sides, rather it specifically tells mediators their job is to focus on assisting the parties in resolving their dispute and not on ensuring the fairness of the ultimate settlement terms. FO 518 does not require settlements to be equally good for all sides and, accordingly, does not prohibit mediator’s proposals for failing to ensure the same.   

Although beyond the scope of this paper, Kichaven’s argument that an unvetted proposal destroys a mediator’s neutrality (as well as Mulroy’s recommendation not to discuss the merits of the case) adopts too narrow a view of “neutrality.^[42] In fact, TMCA, AAA Commercial Mediation Procedures and the Uniform Mediation Act use the word “impartial” and not “neutral” when discussing a mediator’s role. Admittedly, these terms are often used interchangeably. However, I am an AAA arbitrator. The parties expect me to treat them fairly and I have duties to ensure that I am perceived by the parties as impartial. But, at the end of the day, the parties understand that I might decide in either party’s favor. Impartiality does not mean my award will be equally favorable to each side. Likewise, in pulling an unvetted mediator’s proposal from my “ear” the parties should not be expecting me to divide by two and mechanically calculate the midpoint (they have their own calculators).

Kichaven takes a negative view of mediators who, he says, pull numbers from their “ear,” but what is so bad about that? Mediators are trained to actively listen to the parties prior, during and often after the mediation. Listening aids a mediator in crafting a tempting proposal. The goal in providing a proposal should be to give the parties something to think about and make a business decision that could lead to ending a lawsuit. When done correctly, a party has not lost faith in the mediator’s impartiality solely because the proposed number happens to be closer to one of the party’s last demand or offer.

Finally, Kichaven’s critique that mediator’s proposals are unethical because, when reviewed, a party’s attorney cannot answer whether “this is the best we can do” is misplaced. Respectfully, Kichaven is asking the wrong question. When faced with a mediator’s proposal the parties and their attorneys should discuss whether a settlement at the proposed terms, if accepted by the other side, would be in the party’s best interests. It is up to each party, on a case-by-case basis, to discuss if rejecting the proposal is their best course of action for whatever reason, including, but not limited to the fact that they think they might do better (either at trial or later settlement discussions). The reality is—with or without a mediator’s proposal (vetted or unvetted)—the parties never know whether they could have done better. As the California Court of Appeal correctly noted, “[e]ven skillful and experienced negotiators do not know whether they received the maximum settlement or paid out the minimum acceptable.”[43] No settlement—nor mediator’s proposal—could satisfy Kichaven’s impossible standard. Settling parties never know if they could have done better, but it is not unethical to ask them to consider settling anyway.

What Is All the Fuss About?

Kichaven is not the only one who read FO 518 and concluded that his mediation practices were ethical. I did the same. The difference is I am not arguing that my approach is the “only” ethically permissible way to deliver a mediator’s proposal. O’Neal writes that her mediator’s proposals are only done when the parties agree to consider them, when the negotiations are close to an impasse and the parties agree to a procedure that protects the confidentiality of their answers.^[44] In my opinion, such a procedure is still ethically permissible under FO 518.

Moreover, mediator’s proposals work. They can help parties make decisions by eliminating certain cognitive biases that often impede good decision-making.^[45] Reactive devaluation is a fancy way of saying we discount ideas from our adversaries.^[46] Accordingly, “parties are more likely to accept an idea from a mediator but would be skeptical if the other side suggested the same idea.”^[47] Thus, an unvetted mediator’s proposal, in certain circumstances, helps the parties focus on whether the proposed terms are in their best interest without the baggage of thinking about why the other side proposed them (which may have led the parties to a potential stalemate).

Furthermore, the attorney-client relationship often creates a “conspiracy of optimism” which leads parties to overvalue their case. Attorneys know they are retained to be zealous advocates and often shy away from telling a client something they don’t want to hear. [48] Likewise, early in the case a client may withhold inconvenient facts from an attorney they want to represent them. As FO 518 makes clear, the mediator is not in an attorney-client relationship and is not impacted by that dynamic.[49]

When parties arrive at mediation it is (hopefully) after internal deliberations concerning the value of the case and negotiation strategy. Thus, it is not uncommon that multiple members of a team might have previously held slightly different viewpoints. A mediator never wants to drive a wedge between a party and the attorney they hired to advise them. However, the following hypothetical underscores why, in certain circumstances, a mediator’s proposal can be helpful to allow further internal discussions of each party’s best interests:

Prior to the mediation the plaintiff-client and attorney separately valued the case. The client believed the case was worth $400,000. The attorney valued it at $500,000 (possibly because at some level she wanted to be seen as a zealous advocate). At mediation they present a united front and throughout represent that they need over $500,000 to settle the case. The defendants spent most of the day saying they would not pay more than $300,000, but go to $350,000 on their last offer, which is rejected. Thus, after a full day of mediation the defendant offered $350,000 and the plaintiff’s last demand was $550,000. The parties agree that it would be helpful for the mediator to provide a mediator’s proposal. Based on everything she heard during the mediation process, the mediator prepares separate letters recommending the parties consider a settlement at $425,000. Kichaven believes this is improper because it is not at the midpoint. Unbeknownst to the mediator, her proposal was actually higher than the plaintiff-client’s initial valuation. Moreover, in this situation, the attorney is now free to give her honest assessment of what is in the client’s best interests without being concerned about not being viewed as a zealous advocate. And all of this is within the understanding that the defendant has previously said she would not pay $425,000, but the mediator is simultaneously asking her to reconsider if that would get a deal done. So, will the parties accept the proposal? Maybe, maybe not, but they each will have the opportunity to consult with their respective attorneys and assess whether it is in their best interests. And in certain circumstances, under the guise of a neutral’s proposal, the decision-making process can be unburdened of cognitive biases and the parties can exercise their self-determination. That is within both the letter and spirit of FO 518. 

My Rorschach Test Results -The Written Proposal

I will only offer a mediator’s proposal if the parties agree it could be helpful and are willing to consider it. That means explicitly addressing one of Kichaven’s concerns—I tell the parties the number will likely be closer to one side’s last offer. My preference is to present a written mediator’s proposal. It has been very effective and ensures that the proposal is not a “gut” reaction (or, as Kichaven would say, pulled from my ear) at the end of a long day. I sleep on it, perhaps for a few days. This also gives the parties time to reflect about a potential impasse. I did not invent the written proposal and Cheng and Coleman do an excellent job explaining the approach:

·         The proposal is “a thoughtful, specially constructed writing”;

·         While the parties receive the identical proposed terms, each receive a private memoranda containing a section that “is tailored specifically to each party; and

·         Receiving a tangible writing assists organizations in their review and encourages decision-makers to “take the proposal more seriously” and that studies show most people “are far more visual that they are auditory.”^[50]

Cheng and Coleman wrote their article before FO 518, but suggest providing a written proposal “does not compromise mediator neutrality” because the proposal demonstrates an “understanding and appreciation of [their] interests and concerns.” Id. at 125.

I have successfully used written mediator’s proposals on a small subset of my cases in which the parties and I agreed it could be helpful. In more than one matter, just receiving a detailed letter makes the parties appreciate the time spent on working to assist them and makes settlement seem possible. Logistically, written proposals are easy to forward and share with all decisionmakers. Finally, many lawyers during a mediation are self-conscious discussing even the most basic conditional probabilistic calculations that can be used to evaluate cases.^[51] Having the time to sit and look at assumptions made in, for example, a neutral’s decision-tree analysis can help reframe decisions in a less-threatening setting than mediation. In sum, I defend the ethical right to use, in certain circumstances, unvetted mediator’s proposals because they work and can help parties resolve cases—the mediator’s objective according to FO 518. 

Cheng and Coleman identify a practical downside to the written proposal—cost. Thus, they recommend only using it in larger matters or suggest that the mediator be open to waiving billing for time if the proposal is rejected.[52] I disagree that a mediator’s compensation should be impacted by a mediation’s outcome. Every mediator is free to adopt their own approach. I charge a flat fee that explicitly includes a proposal, if necessary. Most cases do not need one. I confess for some cases I have spent more time writing the proposal than I did at mediation. However, when you charge a flat fee you always know that your compensation on an hourly basis will be higher in some cases than others. Having this mindset helps a mediator set rates and should not provide a disincentive to offer a written proposal when the parties request one.

A Mediation Proposal for ADR

I disagree with Kichaven concerning whether FO 518 implicitly renders mediator’s proposals unethical and whether ADR is broken. By suggesting ADR is adrift and flooded by untrained colleagues who resort to unethical tactics, Kichaven is a polarizing figure. While Kichaven sees unvetted mediator’s proposals as a lazy tool for mediators more concerned with their own egos, I see them, in certain circumstances where the parties request them, as a tool to assist parties and their attorneys in making good business decisions in a way that minimizes unhelpful cognitive biases.

As ADR’s self-appointed mediator, I have a more modest proposal. Taking the mile-high view, I join Kichaven in a plea to attorneys to more fully consider what they desire—and will tolerate—from mediators.

I attended a presentation by a mediator who was speaking to an audience of lawyers. He told them about another mediator who had the audacity to suggest that not all cases should settle. He ridiculed the other mediator and promised the attorneys that he “is not the type of mediator to take ‘no’ for an answer.”^[53] The lawyers loved it. The message was clear—mediators need to be tough, to be proactive, to take ownership and to steer the case toward resolution. And while I agree that good mediators are engaged, creative and persistent, I disagree with the implicit message that the mediator decides whether a case will settle. In fact, FO 518 makes clear that those decisions are for the parties and their attorneys and not the mediator.

I told this story while on a panel with Kichaven in Chicago. We both agreed that mediators should not try to attract business by suggesting they will interfere with the parties’ right to self-determination. In a perfect world, attorneys and their clients would not seek mediators who do not fully appreciate their ethical duties. The ADR community cannot be lemmings and cater to whatever lawyers want them to do. FO 518 says a mediator must play it straight. That said, ADR is evolving and reacting to clients who want evaluative and directive mediators. Accordingly, FO 518 gives mediators the go-ahead to provide their opinions on how a court might rule if the mediator and parties believe it would be helpful. Likewise, it permits a mediator to provide an unvetted mediator’s proposal to assist the parties in making the final decision concerning whether settlement is in their best interests.

Kichaven is correct to urge attorneys to seek out skilled mediators and to vet them by learning more about their approach. Good mediators are willing to customize their mediations after working with the parties.[54] Kichaven and I simply disagree about where to draw the line and on which side the unvetted mediator’s proposal lies.

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