Practical Tips for Using RISK ANALYSIS IN MEDIATION - Dispute Resolution Journal - Vol. 53, No. 2
James E. McGuire
The author is a member of the law firm of Brown, Rudnick, Freed & Gesner and is chair of its ADR Practice Group. He concentrates on dispute resolution in financial and commercial areas. He is a mediator for the Middlesex County Multi-Door Courthouse Program and is on the mediation /arbitration panels of the American Arbitration Association and the CPR Institute for Dispute Resolution.
Sometimes a “reality check” is needed during a mediation when parties seem hopelessly deadlocked over the value of a claim. Risk analysis may be one answer, says the author. Its skillful use can steer the parties toward a realistic evaluation of a fair settlement range, as shown in this practical, by-the-numbers article drawn from an actual mediation.
This article discusses the use of risk analysis1 as a tool for mediators. In money disputes, parties may be very far apart and a settlement seems unlikely. In such cases, a suggestion to “split the difference” rarely works and may leave both parties unhappy with the mediation process. Risk analysis provides a more structured approach the parties can use to re-evaluate their perceptions of the fair settlement range of the claim. The facts below derive from an actual mediation, although the names and certain facts have been modified to preserve confidentiality.