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An Empirical Analysis of Mediation: Insights from 400 Employment Dispute Cases

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This study explores mediation practices based on 400 employment-related cases, showcasing a remarkable 94% overall settlement rate. The research analyzes factors that influence settlement outcomes and amounts, revealing patterns in offers and counter-offers. It highlights the effectiveness of mediator proposals, which resulted in a 99% settlement rate, and discusses the dynamics of bargaining, including the significant impact of initial offer disparities. The findings foster further inquiry into mediation strategies and future data collection needs.

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An Empirical Analysis of Mediation: Insights from 400 Employment Dispute Cases

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  1. Inside the Caucus:An Empirical Analysis of Mediation from WithinDan KlermanLisa KlermanQuinnipiac-Yale Dispute Resolution WorkshopSeptember 27, 2013

  2. Summary • Empirical study of mediation practice • 400 employment related cases • Unique, because mediation and settlement negotiations are confidential • 94% overall settlement rate • Analyzed • Factors influencing settlement • Factors influencing settlement amount • Pattern of offers and counter-offers • Welcome suggestions • What else can do with these data? • What data should collect in future?

  3. Mediation Practice • Private • Consensual • Paid • Parties represented by lawyers • Los Angeles County • Employment disputes • Discrimination, Whistleblower, Wrongful termination • Class Actions • Usually one intense day • Evaluative and/or Facilitative • Average settlement amount: $176,210

  4. Factors Influencing Settlement Rate • 94% overall settlement rate • Class Actions: 85% • Plaintiff lawyer mixed practice: 87% • Pro-bono cases: 80% • Mediator’s Proposal: 99% • 98% settlement rate if four or more rounds of bargaining • No significant differences by • Plaintiff gender • Lawyer gender • Law firm size

  5. Bargaining • Plaintiff usually made the first offer • Parties start very far apart • On average, plaintiff’s first offer was 68 times higher than defendant’s first offer • Median rounds of bargaining: 4 • Mediator’s proposal in 89% of cases • If case settles without mediator’s proposal, plaintiff accepts defendant’s offer

  6. Settlement Amounts • Cases settle much closer to defendant’s opening offer • ¼ of difference between plaintiff’s and defendant’s first offer • E.g. if defendant’s first offer was 10K, and plaintiff’s first offer was 680K, then average settlement was 175K = 10K + 0.25 x (680K-10K) • Settlements closer to plaintiff’s initial offer if initial offers are closer • 1/3 if ratio of plaintiff to defendant’s offers is less than 15 • 16% if ratio is greater than 75 • Explicable if defendants’ offers are not significantly affected by plaintiffs’ offers • But some plaintiffs start with more realistic offers, while others “shoot the moon.” • Or explicable if plaintiffs’ offers are not much affected by defendants’ offers

  7. Plaintiff’s and Defendant’s Offers (Normalized)

  8. Conclusion • No significant gender differences • Mediation can be very successful • Parties settle, in spite of starting very far apart • Mediator’s proposal is most important technique • Caution about interpreting data • Cases are not random selection of all cases • Party strategies and mediator techniques are not randomly chosen • Further empirical work • What else could do with these data? • What data should collect in future cases?

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