By Leslie King O’Neal
Mediator’s Proposals—Useful Tool or Ethical Minefield?
Most mediators and construction lawyers are familiar with “mediator’s proposals,” a tool sometimes used to break impasse in negotiations. Typically, a “mediator’s proposal” is a confidential proposal setting forth a dollar amount and/or a set of settlement terms to each party. The party may accept or reject the proposal confidentially. If all parties accept, the case is settled. If a party declines, no one learns the other’s decision, preserving leverage and confidentiality.[i] Mediators’ proposals are often used as a last resort after all other attempts to avoid impasse have failed. Frequently, one or more parties request the mediator’s proposal. However, a recent ABA opinion raises ethical questions about how lawyer/mediators should use mediator’s proposals.
Mediator’s Proposals Spark Debate
Use of mediator’s proposals has sparked debate among mediators and lawyers. Critics say such proposals can violate the parties’ right to self-determination[ii] and can create a perception the mediator favors one party over another. Also, if not presented carefully, a mediator’s proposal can be misinterpreted as the mediator’s legal opinion on the merits. Follow-up discussions could inadvertently reveal the other party’s acceptance, violating confidentiality.
Benefits of Mediators’ Proposals
Proponents assert a mediator can propose a number that neither side felt comfortable suggesting. A party might agree to a mediator’s proposal even if it would not have agreed to the proposal had the opposing party made it.[iii] This can be helpful where parties have strong emotions or egos, making them unwilling to concede any points, even in a confidential mediation process. Also, the mediator’s proposal usually comes with a deadline for acceptance, which can help parties (and insurance adjusters) reach final resolution.[iv]
Spotlight on Intersection of Lawyer & Mediator Ethics
A recent ABA opinion on lawyer/mediator ethics spotlights the intersection between lawyer ethics and mediator ethics. Not all lawyers are mediators, but many mediators are lawyers, adding ethics requirements for lawyers when acting as mediators. State bar requirements, often based on the ABA Model Rules[v], regulate lawyers’ ethical duties. However, since not all mediators are lawyers, most state bar rules do not include specific mediator ethics rules.
The Patchwork of Mediator Ethics Rules
Mediator ethics rules are a patchwork quilt of statutes, opinions, provider organization rules, and case law varying between different states and jurisdictions.[vi] Many states have adopted mediator ethics rules by statute or through the state court system.[vii] These rules usually apply to certified mediators or to mediators involved in court-annexed mediations.[viii] Organizations such as AAA[ix] and JAMS[x] publish ethics guidelines for their members. However, many mediators are neither certified nor members of provider organizations; thus, these rules don’t apply to them. California recently enacted a voluntary certification program for mediators (and arbitrators) including ethics requirements.[xi]
What is ABA Opinion 518 & How Does it Affect Mediator‘s Proposals?
In October, 2025The ABA Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 518,[xii] describing how lawyers acting as neutral mediators should avoid misleading communications. The opinion stated, among other things, that lawyer/mediators should not tell parties they are acting to achieve a party’s best interest or that a proposed settlement is in a party’s best interest.[xiii] While the ABA opinion is only advisory, courts or ethics panels may cite it in mediator disciplinary cases.[xiv]
Does ABA Opinion 518 Make Mediator’s Proposals Unethical?
The ABA opinion has spurred considerable commentary. California mediator Jeff Kichaven wrote a rather blistering article[xv] asserting that opinion 518 prohibits mediator’s proposals unless they are “equally good for both sides,” which he interprets to mean that any mediator proposal must be at the midpoint of the last demand and offer. He asserts that any other proposal means the mediator is no longer neutral.
Do Mediator’s Proposals Undermine Party Self-Determination?
Mr. Kichaven cites the ABA/AAA/ACR Model Standards of Conduct for Mediators, asserting that a non-midpoint mediator’s proposal violates Standard 1B[xvi] regarding maintaining party self-determination. He states, “Once a mediator chooses a non-midpoint number, neutrality is gone.”[xvii] This author believes this is too harsh an indictment, which does not consider the many factors involved in mediator’s proposals in construction cases.
Settlement Factors in Construction Mediations
Settlements in construction mediations often involve many factors other than mere numbers. For example, issues such as maintaining business relationships, witness availability, potential mergers or other negotiations, corporate reporting requirements, avoiding adverse publicity, insurance coverage issues, future business concerns, and surety or lender relationships, may affect a party’s settlement evaluation and willingness to pay or accept a dollar amount. The mediator’s understanding of the whole case should inform any mediator’s proposal.
Drafting and Presenting a Mediator’s Proposal
Critics assert mediator’s proposals improperly position the mediator as an advisor, causing lawyers to abdicate their ethical duty to counsel clients about settlement. Mr. Kichaven criticizes lawyers for “delegating responsibility for the final settlement number” to the mediator. He decries the “unvetted, pulled-from-the-ear, non-midpoint” mediator’s proposal (and rightly so). He suggests the parties’ counsel and the mediator should negotiate the mediator’s proposal number before the proposal is made. In the author’s experience, experienced mediators use this approach informally before considering making a mediator’s proposal.
The Lawyer’s Role in Mediator Proposals
JAMS mediator Marc Alan Fong describes the lawyer’s role in mediator proposals as that of an interpreter and advisor.[xviii] First, the lawyer interprets the proposal in context of prior negotiations, evaluates the legal merits and risks, and explores non-economic factors, such as relationships and reputation. Then the lawyer explains the proposal clearly, frames the choices plainly, and advises the client about options without any pressure. With the lawyer’s help the client should decide whether to accept the proposal.
Guidelines for Making Ethical Mediator’s Proposals
In Mediation Ethics: A Practitioner’s Guide,[xix] Sharon Press provides the following guidelines for making ethical mediator’s proposals:
- Use mediator’s proposals only when sophisticated parties request it.
- The mediator must have sufficient knowledge and expertise about the case to develop the proposal.
- A mediator’s proposal should be used when negotiations have stalled and the mediation process is near impasse. Allow the parties to resolve the non-monetary issues themselves where possible. Give the parties a reasonable time to respond.
- Clearly state the procedure for accepting or rejecting the proposal and protecting confidentiality of the responses. Check with the parties to be sure all responses come in at the same time.
[i] Mark Alan Fong, Understanding and Presenting a Mediator’s Proposal, JAMS ADR Insights (September 25, 2025). https://www.jamsadr.com/insight/2025/understanding-and-presenting-a-mediators-proposal.
[ii] These critics assert that a mediator’s proposal violates the mediator’s primary ethical duty to ensure the parties reach a voluntary agreement based on their own self-determination. They argue that a mediator’s proposal can implicitly pressure parties into a settlement, compromising mediation’s voluntary nature.
[iii] The mediator’s proposal may reduce “reactive devaluation,” a cognitive bias that occurs when proposals from an adversary are devalued. Patrick Jones, The Mediator’s Proposal: A Useful Tool for Breaking Impasse, Henning Mediation (March 18, 2025). https://www.henningmediation.com/blog/the-mediators-proposal-a-useful-tool-for-breaking-impasse/
[iv] William Gilbride, Thoughts on the Mediator’s Proposal, Mediate.com (January 10, 2025) https://mediate.com/thoughts-on-the-mediators-proposal/
[v] ABA Model Rules of Professional Conduct – Table of Contents
[vi] See, Chapter 1.2, Mediation Ethics: A Practitioner’s Guide (Omer Shapira, Ed.)(ABA Press 2021). For example, the Uniform Mediation Act has been adopted by only 13 states and the District of Columbia (CT, GA, HI, ID, IL, IA, NC, NJ, OH, SD, UT, VT, WA). Mediation Act – Uniform Law Commission
[vii] The author was not able to locate a current state by state list of mediator ethics rules. At least twenty-eight states have adopted ethics rules or guidelines for certified mediators or court-connected mediations. See note vi, supra, Susan Nauss Exon, Mediation Ethics: A Practitioner’s Guide, Appendix A, State Mediation Codes of Conduct and Mediation Ethical Advisory Opinions (last updated 2021).
[viii] E.g. Rule 10.200, Florida Rules for Certified and Court-Appointed Mediators (effective January 1, 2025): “These rules provide ethical standards for certified and court-appointed mediators.”
[ix] AAA adopted the Model Standards of Conduct for Mediators on September 8, 2005. The American Bar Association and the Association for Conflict Resolution adopted them in August 2005. https://icdr.org/sites/default/files/document_repository/Model_Standards_of_Conduct_for_Mediators.pdf
[x] JAMS Mediators Ethics Guidelines, https://www.jamsadr.com/mediators-ethics.
[xi] Former SB 940, now Chap. 4, Div. 3, Bus. & Professions Code, Article 10, §6173, including a requirement that “mediators to comply with ethical standards that are equivalent to the Rules of Conduct for Mediators in Court-Connected Mediation Programs for General Civil Cases as provided in Rules 3.850 to 3.860, inclusive, of the California Rules of Court.” https://legiscan.com/CA/text/SB940/2023
[xii] aba-formal-opinion-518.pdf
[xiii] Id.
[xiv] Robyn Weinstein, Taking ABA Ethics Opinion 518 for a Test Drive, AAA Mediation Magazine (January 7, 2026) https://mediationmagazine.adr.org/taking-aba-ethics-opinion-518-for-a-test-drive/
[xv] Jeff Kichaven, Mediation After ABA Opinion 518: What Are a Lawyer’s Responsibilities? Cal Lawyer, Daily Journal (December 3, 2025) Mediation after ABA Opinion 518: What are a lawyer’s responsibilities?
[xvi] ABA Model Standards of Conduct for Mediators, Standard 1B: “A mediator shall not undermine party self-determination by any party for reasons such as higher settlement rates, egos, increased fees, or outside pressures from court personnel, program administrators, provider organizations, the media or others.” Model_Standards_of_Conduct_for_Mediators.pdf
[xvii] From Mr. Kichaven’s perspective if the mediator believes the proposal is “good”—that is, the best a party can get in negotiation and better than going to trial, it is a “best interest” judgment, which he says is prohibited by ABA Opinion 518.
[xviii] See, Marc Alan Fong, supra, note i.
[xix] Supra, note vi, Chapter 7.5, Guidelines for Ethically Providing Mediator Proposals.