Litigation is civil combat. Mediation is not. It is the facilitated negotiation of a settlement that concludes all litigation. But getting to a signed settlement agreement requires negotiation, where certain obstacles can hamper, prolong or even derail the mediation process.

In this article, we identify common obstacles to effective negotiation observed by our neutrals and studied by negotiation scholars. We also recommend ways that parties can overcome them before and during mediation.

Obstacle 1: Thinking of the Negotiation as Distributive

A distributive negotiation is one where parties “compete over a fixed amount of value.” Also called a price negotiation, a distributive negotiation often only involves a single issue, the price of the transaction.

Some aspects of a distributive negotiation have their place in mediation. Parties should know their reservation price, the minimum or maximum at which they are willing to settle, and their best alternative to a negotiated agreement (BATNA), such as filing motions in limine or proceeding to trial with full force.

But a distributive negotiation — even in a typical premises liability mediation, where the settlement value, a price term, is the preeminent unresolved issue — is not the most optimal model for negotiating a settlement. This is because the distributive negotiation model focuses on positions, not interests. In it, the parties’ main task is to proverbially slice up the pie — often with a win-or-lose mentality — to get as much as they can.

“I often see this with single-number offers,” said Hon. Mitchell L. Hoffman, (Ret.), senior mediator and arbitrator at ADR Systems. “Defendant offers $300,000. Plaintiff wants $3 million. Defendant goes up to $500,000. Plaintiff lowers to $2.75 million. The back-and-forth is slow, stubborn and frustrating. And the gap stays too wide for too long.”

Better, in Judge Hoffman’s mind, is an integrative approach to negotiation. An integrative negotiation is joint-value-seeking; a party makes an offer but includes a concession to the other side’s interests, creating some value that sweetens the deal. Integrative negotiation signals pragmatism and good faith, which builds trust with the other side. Moreover, by “trading across terms,” as this process is also called, parties accomplish more through fewer exchanges of offers.

For example, counsel may create value for both sides by building a condition into the agreement. The defendant may agree to modified confidentiality, allowing plaintiff to advertise the case’s nature and settlement value but not reveal the parties’ identities, in exchange for a mutual non-disparagement agreement that requires the plaintiff to reimburse settlement money if they violate this term.

Likewise, parties can move closer to settlement in emotional business and injury disputes by proposing settlement fund allocations in creative, personal ways rather than thinking of it as a single sum. The defendant may propose a reduced settlement sum for the plaintiff but offer to also donate money to a non-profit dear to the plaintiff or related to the inciting harm of the dispute.

When parties give a little, they get a little as well. An integrative negotiation model goes beyond the boundaries of distributive negotiation by productively furthering both parties’ interests.

Obstacle 2: Fearing Loss While Negotiating

One of the biggest obstacles to successful negotiation is not the strength of a case but the way people think about numbers. Once a number is on the table, it can remarkably shape every conversation that follows. Parties begin measuring movement from that first figure instead of focusing on the actual value of the case. Whether the opening demand is too high or the opening offer too low, the parties often become anchored to positions rather than principles.

Underlying this phenomenon is what psychologists call loss aversion, where people tend to experience the pain of making a concession more intensely than the satisfaction of reaching an agreement. As a result, moving away from an opening position can feel like losing, even when the movement is leading both sides toward a reasonable settlement. The negotiation becomes a contest over who gave up more instead of a discussion about where the case should resolve.

Hon. F. Keith Brown, (Ret.), senior mediator and arbitrator at ADR Systems, suggests that one way to change that dynamic is to stop thinking about settlement as a single number and start thinking about it as a bracket.

“Throughout my years on the bench and now as a mediator, I have encouraged parties to think in terms of a range rather than a point,” said Judge Brown. “Cases rarely have one precise settlement value. They have a zone within which reasonable people can disagree.”

Bracketing recognizes that reality. Instead of proposing a fixed figure, a party proposes a range of acceptable outcomes. Properly used, brackets help identify the Zone of Possible Agreement (ZOPA) while signaling flexibility without requiring either side to abandon its valuation of the case. The discussion shifts from defending a number to exploring a settlement range.

In Judge Brown’s experience, brackets do more than narrow the gap. They change the psychology of the negotiation. Because neither party is immediately surrendering a fixed position, concessions become easier to make, creativity increases, and the focus returns to the ultimate goal—not winning the negotiation, but resolving the dispute.

Obstacle 3: Succumbing to Reactive Devaluation

Reactive devaluation is a cognitive bias wherein the “very offer of a particular proposal or concession — especially if [it] comes from an adversary — may diminish its apparent value or attractiveness in the eyes of the recipient.” This, unsurprisingly, risks complicating a mediation, which fundamentally involves adversaries, who are already predisposed to thinking negatively about one another, exchanging settlement proposals.

The error of reactive devaluation involves several underlying, predicate processes, according to scholarship. These include inferential or interpretive tendencies to do two things: To “look for ambiguities, omissions, or ‘fine print’ that might render the terms of that proposal more advantageous to the other side, and perhaps less advantageous to our side.” And to evaluate “any relevant object of judgment” like a concession or proposal “more negatively as a consequence of its linkage to a negative source (including, presumably, an enemy or adversary).” In short, guilty-by-association determinations fuel reactive devaluation impulses.

Our neutrals think a procedural root of reactive devaluation is another negotiation concept: information asymmetry, when one or both sides lack — or suspect they lack — vital information about the deal forming before them.[1] Parties on either side may rebuff an offer out of hand because they lack information that contextualizes the rationale behind it, thinking the worst of the opposing party’s motivation for proposing it.

The remedy is simple: Sharing submissions before mediation — at least some of them.

“Sharing submissions is helpful for several reasons,” said Hon. Michael J. Powers, (Ret.), senior mediator and arbitrator at ADR Systems. “First, parties can know what’s coming in mediation because nobody wants to be blindsided; the information provides understanding. Second, they can sleep on what they read and respond rationally. Third, it signals earnestness about wanting to find a settlement, which can encourage trust. Fourth, submissions are mediation communications, so they’re generally privileged, not discoverable, not admissible as evidence and confidential.[2] All the incentives are there.”

When parties know more about the dispute, they can react more effectively; they can avoid, in part or entirely, cognitive biases that hinder successful negotiations.

Overcoming Obstacles to Settlement

Negotiating in an integrative manner, bracketing settlement offers and sharing submissions are all ways that parties can overcome obstacles that our neutrals commonly see in mediations. Each strategy has the added benefit of signaling good faith and building trust with the other side, which are essential to any successful mediation. In our neutrals’ experience, negotiating well means settling sooner.

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Hon. F. Keith Brown, (Ret.) has extensive experience in settling personal injury, workers’ compensation and commercial matters. As a mediator, he is known for his keen ability to easily connect with people and promote productive communications between all parties. Judge Brown is a beloved pillar of the community, who has been recognized numerous times for community service.

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Hon. Mitchell L. Hoffman, (Ret.) has cultivated over 38 years of experience as a legal practitioner, having spent 21 of those years as a judge and 17 as an attorney. On the bench, he handled both Chancery and Law Division calls, settling many commercial and personal injury cases. Judge Hoffman is known for his detailed case preparation and analysis. He is fair and even-tempered and provides a calming influence during mediations.

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Hon, Michael J. Powers, (Ret.) is uniquely positioned to excel as a mediator and arbitrator. For 14 of his 18 years on the bench in Will County, Judge Powers served as a pretrial settlement judge in the Law Division. Further, he exclusively dedicated his last six years as a jurist to settling over 1,000 personal injury and commercial cases at pretrial, cultivating robust skills as a mediator.

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[1] Guhan Subramanian and Michael Klausner. Deals: The Economic Structure of Business Transactions, Harvard University Press (2024), p. 18.

[2] Judge Powers is referencing the Illinois Uniform Mediation Act, 710 ILCS 35/1 et seq., It states that a mediation communication is a statement, “whether oral or in a record or verbal or nonverbal, that occurs during a mediation or is made for purposes of considering, conducting, participating in, initiating, continuing, or reconvening a mediation or retaining a mediator.” 710 ILCS 35/2(2). 710 ILCS 35/4 & 8 establish that these communications are so protected and confidential, with certain limited statutory exceptions.

ADR Systems, It’s Settled. ®