Everything You Need to Know About Authority to Settle a Mediation - Chapter 45 - AAA Handbook on Mediation - Third Edition
James R. Madison
James R. Madison is an Arbitrator and Mediator headquartered in the San Francisco Bay Area. He serves on the American Arbitration Association’s commercial, construction, employment and large complex case panels. He is a Fellow of the College of Commercial Arbitrators. He is also Chair of the Public Policy Committee of the California Dispute Resolution Council. His email address is firstname.lastname@example.org. His website is madisonmediation.com.
EVERYTHING YOU NEED TO KNOW ABOUT AUTHORITY TO SETTLE A MEDIATION
James R. Madison
I. Introduction Imagine being the mediator who convenes a mediation with the objective of settling a dispute between Party A and Party B only to learn when the participants gather that no one present for Party A is authorized to reach an agreement. Imagine the reaction of Party B. A disaster for the prospects of settlement? Of course. So what needs to be done to forestall such eventuality? What kind of authority is necessary to create a realistic potential for settlement? Who will have the authority? Must that person be present in the room? And how and when should a mediator go about the task of ascertaining the answers to questions such as these?
II. Authority to Settle—An Overview In a private mediation—i.e., one that is not administered by or referred from a court—it is easy to say that a settlement cannot be achieved without the participation of a representative of each side who has authority to decide whether to settle and for what amount of money based on a combination of what is known before the mediation conference, plus anything that is learned at the conference. Presumably that authority includes the ability to reject a settlement that arguably is reasonable and decide instead to “roll the dice” by going on to court or arbitration.