Insights into Mediation Dynamics

Settlement turns on judgement exercised under pressure as well as on the law. This article examines four forces at work in negotiation, each studied in research published since 2018: the pull of the first figure, the bias in each side’s reading of its own case, the weight of possible loss, and the effect of private sessions with the mediator.

The pull of the first figure

The first figure named in a negotiation exerts a measurable pull on the last. A 2025 meta-analysis, drawing together the research on first offers, found a strong positive correlation between the size of the opening offer and the value of the final agreement (r = 0.62). It also found that the effect diminishes as negotiations become more complex.

The same study found a cost. Ambitious first offers produced “fewer deals” and a worse subjective experience for the party receiving them (Petrowsky et al., 2025). The lesson is not to open low. It is to open with a figure that can be defended, because an opening that cannot be defended invites impasse.

The bias in reading one’s own case

Each party reads the evidence through the lens of its own interest. A 2019 replication tested the effect directly. Participants who learned their role before studying the case materials settled less often than those who learned it afterwards.

When participants know their bargaining role before studying the case materials rather than afterwards, settlement frequency decreases.

Hippel & Hoeppner (2019), International Review of Law and Economics 58, 63–74

The effect was substantially smaller than in the original study (Babcock et al., 1995), and the authors assessed the replication as successful. The practical answer is independent testing of risk. A mediator who asks each party, in private, how a judge would see the other side’s best point performs exactly that function.

The weight of possible loss

Parties facing a possible loss at trial weigh it heavily. A 2023 study modelled litigants with that aversion to loss and asked what increases the rate of settlement. Its conclusion was narrow and precise.

Only a reduction in the asymmetry of information about trial odds uniformly leads to higher settlement rates.

Argenton & Wang (2023), European Journal of Law and Economics 56, 369–402

The finding is theoretical, not experimental, and should be read as such. Its direction is nevertheless clear. Where each side understands the trial risk as the other sees it, the gap between them narrows. Candid exchange about the strengths and weaknesses of each case, protected by the confidentiality of the process, serves that end.

The effect of private sessions

Private sessions allow each party to speak to the mediator alone. A 2018 study of mediator behaviour measured their effect.

Greater proportional use of caucus has mixed results, increasing participant trust in the mediator but making parties more hopeless about resolution with the other parent.

Charkoudian, Walter & Eisenberg (2018), Family Court Review 56(4), 544–571

The study concerned custody disputes, and its application to commercial mediation calls for care. The findings are correlational, not causal. Their lesson travels, however. Greater use of private sessions is associated with greater trust in the mediator. Heavy reliance on them is associated with greater doubt about reaching agreement with the other side. The skill lies in the balance between private and joint work.

The objection, and the answer

The strongest objection is that commercial parties are sophisticated, advised and deliberate, and that findings from experiments and family cases say little about them. The objection has force. The research does not claim to predict any individual mediation.

The findings are nonetheless consistent across different methods and settings. Openings anchor outcomes. Partisanship distorts assessment. Shared understanding of risk narrows the gap. Private sessions are associated with trust, at a price. None of these forces disappears because the parties are companies. Each is present in the room, and each can be managed.

Conclusion

Preparation for mediation is usually framed as preparation of the legal case. The research suggests a second task: preparation for the pressures that shape judgement in the room. A defensible opening, an independent view of risk and a candid exchange about trial odds are each supported by current evidence. The mediator’s work lies in making all three possible.

This article is general commentary on the law of England and Wales at the date of publication. It is not advice on any particular matter.