Mediator's Proposals in the Wake of ABA Formal Opinion 518: Proposing that Proposals Must Persist

Having spent the better part of two decades litigating all manner of civil disputes, and participating in a few hundred mediations, on behalf of defendants and plaintiffs, two things I've learned are: 1. Plenty of mediations end with a mediator's proposal, many of which successfully resolve the dispute. 2. Despite the first, no one can define what a mediator's proposal is.

Some years ago, one writer astutely observed that defining a mediator's proposal is "like nailing Jell-O to a tree." (Nancy Neal Yeend, Plaintiff Magazine, "The Mediator's Proposal" August 2016). Indeed. The concept has never been susceptible to a tight definition. Instead, it is a paradox that as commonplace as mediator's proposals are, a universally accepted definition simply does not exist.

The recent issuance of ABA Formal Opinion 518 - plus the commentary that has followed it - added new uncertainty, albeit perhaps unintentionally, to what constitutes a viable mediator's proposal. (See, ABA Formal Opinion 518, October 15, 2025; See also, e.g., Jeff Kichaven, "The Mediator's Proposal after ABA Opinion 518: Best Practices Just Became Ethical Requirements," ABA Litigation Section, February 6, 2026; Mark B. Helm, "In Defense of Mediators' Proposals: Clarifying ABA Opinion 518), February 9, 2026)

The usefulness of mediator's proposals and a new need to define them

Experienced litigators know that the mediator's proposal in its various forms is a highly effective tool to achieve one of the public policy aims of California - the pretrial settlement of civil disputes. Typically that tool comes out of the toolbox at a dire point in a mediation: When negotiations deadlock, the parties reach impasse, and mediation failure is otherwise imminent. But settling disputes is very important for litigants, attorneys, the court system and, of course, mediators. Taking a very useful tool out of the toolbox is problematic.

If the net effect of Formal Opinion 518 is to scare mediators and attorneys from using mediator's proposals to settle civil disputes, then that effect runs counter to what's best for litigants and is contrary to the public policy of the state. Perhaps the uncertainty that followed from Formal Opinion 518 is tied to the lack of a definition of what a mediator's proposal is. And perhaps confidence in the use of the tool can be restored with better definitions.

What does Formal Opinion 518 say, and what doesn't it say?

Late last year, the ABA, through its Standing Committee on Ethics and Professional Responsibility, issued Formal Opinion 518. The title is "A Lawyer's Duties to Avoid Misleading Communications When Acting as a Third-Party Neutral Mediator." Formal Opinion 518 addresses the conduct of attorneys who are in the role of a neutral mediator. It does not address the conduct of mediators who are not attorneys.

At core, Formal Opinion 518 addresses several aspects of an attorney-mediator's conduct during a mediation:

• The mediator must ensure that the parties understand his or her neutral role - especially to litigants lacking prior mediation experience

• The mediator cannot engage in dishonesty, fraud, deceit, or misrepresentation when communicating with the litigants, or make misleading statements about the strengths or weaknesses of a litigant's position

• The mediator must avoid statements that suggest to the litigants that what the mediator says is in the litigant's "best interest"

Importantly, the subject of mediator's proposals is entirely absent from Formal Opinion 518 -- the opinion is broader in scope and addresses mediations more generally. But we all know that mediator's proposals are an important tool in the mediator toolbox. And likewise we all know that mediator's proposals often come with discussion about how the proposed compromise - while not ideal - is in the litigant's best interest. How then to reconcile the practice with Formal Opinion 518?

The commentary that followed the issuance of Formal Opinion 518 has raised new concerns about ethical and professional responsibility considerations from potentially improper conduct by mediator-attorneys incident to the use of mediator's proposals.

So what are we talking about?

Thankfully few civil litigants truly desire a jury trial. Fortunately, civil litigators can reassure clients who find themselves embroiled in litigation that most disputes settle short of trial. Often that conversation involves explaining to the client what mediation is.

Certainly, some civil litigants understand what mediation is, and how it can play an important role in the resolution of civil disputes. But not all. Fewer still know how a "mediator's proposal" can ultimately deliver peace. Explaining to a client what to expect at mediation - what may or may not happen - is a critically important function for attorneys to effectively accomplish. That means explaining ahead of time what mediator's proposals are.

But because there is no strict definition for what a mediator's proposal is, and it's not always discussed with a given mediator ahead of mediation whether and how they issue proposals, how to prepare a client for this potentially critical stage of mediation is not easy.

Ascribing more specific names to the various types of mediator's proposals - and how they are utilized - may help mediators, litigators and litigants alike. Where to start?

Avoiding conflict with Formal Opinion 518

There is a meaningful difference between a mediator proposing a compromise that is the result of the mediator's subjective conclusion about terms upon which a given case should or could settle and the expression of what the mediator may believe is in the parties' respective best interests, the latter of which runs afoul of Formal Opinion 518. There is no necessity of overlap in that diagram. For example: A mediator can make a settlement proposal after reaching the three following conclusions, without evaluating (or commenting) on what is in either party's best interest:

• These parties wish to settle their dispute but they have reached impasse.

• The defendant can or should pay X to settle this dispute based on what I have learned about their resources and the risk they face.

• I know of no reason why the plaintiff cannot agree to accept X beyond a desire to recover as much money as possible.

With that possibility in mind, and Formal Opinion 518 in the background, a review of the species of mediator's proposals is useful.

What's your type? The versions of the mediator's proposal

Ideally, attorneys and their clients should know ahead of time how their mediator approaches mediator's proposals. Do they ever make them? When and why? What is their approach? Having that information before a mediation begins - or before agreeing to involve a given mediator - is certainly preferred. But even when that is not possible, it is useful to have a discussion with your client about the various forms that mediator's proposals can take. Following is a discussion of the two most common types of proposals used, in the order most frequently observed today:

Type 1 - Mr. Right Now or the zone of the possible

About five years ago, I attended the in-person mediation of a pre-litigation commercial dispute that, if filed, would have included a straightforward nine-figure exposure in federal court for the defendant. It was a commercial dispute and no insurance was involved. The parties engaged one of the nation's most prominent mediators, and everyone assembled in San Francisco to see if the dispute could be worked out. The attorneys were instructed to prepare detailed presentations for a joint counsel-only introduction session. Much work went into the presentations.

When the mediation began, the mediator addressed the large potential exposure in the joint session, after lengthy presentations by both sides were completed. It was understood that the putative defendant had the resources to pay a nine-figure judgment, and it was known that the plaintiff-side attorneys stood to earn a handsome fee if the case settled. Then, surprisingly, the mediator explained his approach was not to evaluate the merits of the claims or the defenses. But only to investigate an economic zone within which a possible settlement might exist. The presentations weren't for the mediator after all. But he requested them so that the parties could see one another's positions.

After that, the mediator spent most of the day conferring with the putative defendant's team after which he unilaterally proposed a large (but not nine-figure) number to settle the dispute. In sum, the accompanying message to all was "you are here only because you have said you would like to settle this dispute, I believe you should agree to settle this dispute for this amount, because I am telling you it is possible to do so." The mediator then promptly walked out. Within a week, the case settled for the exact amount proposed. During that mediation, there was no discussion of what was or wasn't in anyone's best interest.

Given the reputation of that mediator, it is difficult to challenge his approach. Or to argue about the result. The dispute settled. But.... Was the result the right result? Or was "right now" leveraged to get a deal done in a way that favored one side over the other? It was clear the mediator was focused on finding out the most the putative defendant would pay, i.e., the outer limit of what was possible. Then that turned itself into a mediator's proposal to settle. Did the mediator propose a number so large that the plaintiff's attorneys were leveraged out of self-interest to recommend it to their client, when the defendant faced a substantially greater exposure?

The above is of course an extreme example. The more common scenario that most of us see with increasing frequency is where the mediator simply proposes a number that she or he has already learned or decided the defendant (or their insurer) will pay. (A scenario that doesn't need to leverage the plaintiff's attorneys' self-interest in a potentially massive pre-litigation contingency fee.) But the fact that this approach pervades civil disputes of all size and shape is telling. Mediator's proposals that are at core merely a reflection of the mediator's understanding or belief about what the defendant will pay have become the de facto style of proposal. There are problems with this.

First, unless the mediator tells the plaintiff that his or her proposed number was determined based on an understanding of what the defendant is prepared to pay, then the transparency and impartiality that Formal Opinion 518 insists upon is missing. A plaintiff needs to be told by the mediator when a "mediator's proposal" is in reality the mediator playing the role of messenger and delivering a defendant's settlement offer written on the mediator's letterhead. Otherwise, there is an obvious risk that the plaintiff will mistakenly believe the mediator has independently proposed a compromise - when that is in fact not the case - and agree to compromise based on that misunderstanding.

Second, this Mr. Right Now approach abandons one of the most effective aspects of the mediator's proposal, which arises in scenarios where a defendant is entitled to third party indemnity, including as an insured. The Mr. Right Now approach foregoes the useful leverage over an indemnitor that accompanies a mediator's proposal. It is one thing to tell an insurance claims adjuster what a plaintiff has demanded to settle. It is another to tell the adjuster that the mediator has proposed the dispute settle for a certain amount. It is difficult for an indemnitor to refuse to pay a mediator's proposal on the basis that the number is "unreasonable." And that can be critical because, generally, insurers may face bad faith risk for refusing to settle, upon demand of the insured, when there is a reasonable within limits opportunity to do so. Mediators' proposals that are tethered to a number the mediator already knows the defendant (and its insurer) will pay give away settlement leverage. And it does so to the potential disfavor of the plaintiff (who necessarily prefers the greatest number) and to the defendant (because of the increased likelihood a higher number would settle the dispute). In sum, allowing a defense offer to gain the imprimatur of the mediator's endorsement impugns the independence and effectiveness of the mediation process, and it does so most acutely when that isn't made clear to the plaintiff.

In situations where the Mr. Right Now is the only option, then he should be introduced to the plaintiff with the accompanying message that the mediator believes the case may or could have greater value, but that the number being proposed is the most the mediator believes the defendant (or their insurer) will pay at this time. And likewise perhaps the mediator should tell the defense constituents that if they insist on Mr. Right Now, then his introduction will be accompanied with that explanation. In this way, the plaintiff is at least on notice that the decision to be made is untethered to the mediator's own evaluation of what the case should settle for, avoiding uncertainty about whose message it is, and leaving the plaintiff to decide whether to settle or mush on.

As most of us who have attended at least one mediation know, it is typical for mediators to explain to the litigants that if a settlement is reached, it is typically on terms that neither side likes, but one that everyone can live with. Meaning, a true compromise. With that introductory explanation from the mediator in mind, it is fair for litigants (who late in a thus-far unsuccessful mediation process are faced with whether to agree to a proposal) to make a decision based on trust in the mediator's initial explanation of the process. But if all that a late-in-the-process mediator's proposal reflects is what the defendant or the insurance company are willing to pay (or a number essentially adjacent to it), expedience is prioritized and the plaintiff is disadvantaged.

Type 2 - Mr. Right or the independent proposal

Before the Mr. Right Now approach became Mr. Popular, it was more common for mediators to make entirely independent proposals, sometimes without being asked. For several years as a young attorney, I worked for a retired federal judge, J. Lawrence Irving, who was known for resolving high-stakes commercial disputes and securities class actions. I observed him make many settlement proposals. Often we talked them over before they were issued. Judge Irving would bristle at attorneys attempting to steer him in any direction in the formulation of his proposed terms. His highly independent proposals carried a lot of meaning and in turn they settled many high-stakes disputes. It seemed to me his guiding light was what was right and what was just. It was certainly not tied to learning what the defense would pay only to then tell the plaintiff that was his proposal.

Hon. Frederick L. Link (Ret.), an accomplished trial attorney who is now retired from over four decades as a Superior Court judge in San Diego, still believes in the Mr. Right approach. "If I make a mediator's proposal, it is going to be based on what I think should happen and on the information that I have." Judge Link will not make proposals based simply on what the defendant will pay. He focuses on the parties' stated priorities, measures those against "what I have learned during the mediation," and tries to identify a fair compromise.

"Sometimes my approach makes people mad," says Judge Link. And he recognizes other mediators do things differently and for their own reasons. "Attorneys seem to think they can tell mediators what to do because the mediators are being paid by the law firms. That's all wrong." Judge Link believes effective mediation processes hinge on mediator independence, even if that "breaks some eggs."

Despite Judge Link's practice, the days of the Mr. Right approach - seem to have all but passed. Perhaps that is due to the competition amongst mediators for disputes to mediate and a bias towards defense firms. But the Mr. Right Now approach is consonant with Formal Opinion 518. Such a proposal need not come with any statement or explanation, and it requires no assessment of anyone's best interest. And it does take courage. But the approach gives all parties a basis to make a decision based on it, not just the plaintiff.

Certainly there are other, less common, variations on the mediator's proposal, along with the scenario where despite requests of one or both parties, the mediator won't make a proposal, chiefly because she or he thinks parties won't agree to settle. This is an unfortunate position for the mediator to take because it robs the parties of an opportunity to make a decision that could settle a dispute despite the mediator's skepticism it could work. It is a common refrain from attorneys that, at the end of the day, it is best for the parties to have had a decision to make in mediation rather than see the process grind to a halt without an opportunity to make a decision to settle.

An important related question that is beyond the scope of this article is what role if any should an insurance company representative play in whether or when a mediator's proposal is made? Where an insurer isn't a party to a dispute, is it fair to the litigants for the decision whether a mediator makes a settlement proposal to turn on what an insurance claims representative says?

Conclusion

Mediator's proposals are an essential tool and help achieve the public policy of settling civil disputes before trial. But how those proposals are formulated is critical. And the litigants deserve to know how a mediator does so. Outside of litigation, everyone knows that Mr. Right is preferred over Mr. Right Now. When it comes to mediations, the Mr. Right Now approach is the characteristically convenient and expedient option. But clients deserve better. Formal Opinion 518 reinforces the principles of neutrality and transparency that favor the Mr. Right approach.

David D. Cardone, Esq., a founding partner of Dunn DeSantis Walt & Kendrick, a trial lawyer whose practice focuses on complex, high-stakes professional liability matters. His recent work includes the $125,000,000+ pre-litigation settlement of a legal malpractice claim, in collaboration with Stanford And Associates.