It’s a common enough problem: you’ve been in mediation for 7 hours, and the parties are close to getting a deal done. The gap that appeared insurmountable after lunch has narrowed enough that you can almost shake hands across it. And then the mediator returns with your opponent’s most recent offer, and informs you that this is also all the authority that your counterpart has. He or she couldn’t offer you more money if they wanted to. Now what?
This problem occurs most frequently (in my experience) with government agencies that require a long and formal dance in order to coax money out of the appropriate coffers. But insurance companies and publicly-traded corporations are equally subject to the same problem: no one person is vested with absolute authority to pay any sum, no matter what they might say. (An aside: judges believe they can “fix” this problem by simply ordering all parties to send someone with absolute authority. That is as effective as ordering the sun to set. Such an order only ensures that no one will actually admit that they have limited authority—instead, they’ll simply reject the offer/demand without comment.) So, when your counterpart turns their pockets inside out and says you have all the money they were given to bring, what’s next?
Many lawyers will say that what’s next is to pack your briefcase and go home. But there is at least one more move available: you can offer to leave your last demand on the table for a set period of time, in order to allow your counterpart to get the authority to pay you. BUT such an offer should come with a caveat: you will only do so IF your counterpart will agree to recommend that your demand be accepted and paid.
Consider the endgame: when your counterpart goes back to the funding authority (be it a governmental agency, a claims committee, or a board of directors) and says they need more money, the question “do you think we should pay this?” will inevitably be asked. If your counterpart is not willing to affirmatively recommend that the additional funding be provided so that your demand can be paid, it’s unlikely that additional funding will be forthcoming. To put it differently, it may be that no additional funding can be obtained no matter what, but it will never be obtained if the people familiar with the dispute don’t recommend it. For that reason, your offer to keep your demand on the table while your counterpart tries to get the money to pay it only has teeth if you also insist that your counterpart recommend that your demand be paid. This caveat also has the benefit of shedding some light whether the real problem is that (a) your counterpart doesn’t have enough money, or (b) they don’t want to pay what you’ve demanded. In the former instance, your counterpart will often be willing to agree to recommend that additional funding be provided. In the latter instance, they never will.
I won’t suggest that this move will always work when your counterpart plays the poverty card. No mediation strategy works every time. But when your counterpart says they lack the authority to accept your demand, your mediation is effectively over. This move gives you one more chance to walk out of the door with a (potential) settlement. Like most things in mediation: even if it doesn’t work, there’s no reason not to ask.