One of the most consequential moments in any mediation often happens quietly: the exchange of the first settlement demands and offers. Long before a case settles—or fails to settle—the initial numbers can shape expectations, define leverage, and influence the tone of the entire negotiation.
In construction disputes, parties frequently arrive at mediation with dramatically different views of value. Owners may focus on delay damages and incomplete work. Contractors may emphasize unpaid balances and disputed change orders. By the time mediation begins, each side has often spent months reinforcing its own view of the case. That reality makes the first offer particularly important.
Opening numbers set the tone
An aggressive opening demand or a nominal offer can sometimes serve a strategic purpose, but it can also create unintended consequences. If a party perceives the opening position as unserious or performative, negotiations can lose momentum before meaningful discussions even begin. Mediation is a negotiation process, and credibility matters. Parties are generally more willing to engage productively when they believe movement is possible.
That does not mean opening offers should immediately reflect a party’s bottom line. Negotiation requires room to move. But effective counsel understand that first numbers should accomplish more than signaling toughness—they should help frame the discussion in a way that advances resolution.
Credibility creates leverage
A well-supported opening position, tied to project documentation, litigation risk, or damages analysis, often carries more weight than a purely inflated figure designed to anchor negotiations. Parties who can explain how they arrived at a particular number are generally in a stronger position than those relying solely on broad assertions or posturing.
This is especially true in construction disputes, where project records, schedules, payment histories, and expert analyses frequently drive the valuation conversation. The more grounded the discussion is in demonstrable facts and risk exposure, the more productive negotiations tend to become.
The mediator’s role in maintaining momentum
Mediators play an important role in managing these dynamics. Experienced mediators can help parties understand how their proposals are being received and whether a particular approach is helping or hurting the process. In many cases, progress depends less on the absolute value of the first offer and more on whether the parties demonstrate a willingness to engage realistically as negotiations continue.
Settlement negotiations are rarely linear. Cases often resolve after incremental movement, reevaluation of risk, and difficult conversations about cost and exposure. But the tone established early in mediation can either facilitate those conversations or make them significantly harder.
The takeaway
In mediation, numbers matter. But how and when those numbers are presented can matter just as much. A thoughtful opening position can establish credibility, encourage productive negotiations, and create momentum toward resolution. An unrealistic one can do the opposite. Successful mediation often depends not just on where negotiations end, but on how they begin.
Michael R. Bosse is a construction and litigation attorney with nearly three decades of experience representing developers, contractors, subcontractors, and suppliers across New England. Known for his diplomatic, client-focused approach, Mike advises on contract negotiation and administration, construction claims, mechanic’s liens and Prompt Payment Act matters, eminent domain, condemnation cases, and more. He can be reached at [email protected].
Bernstein Shur’s Construction Group helps developers, contractors, and construction professionals manage risk and keep projects on track at every stage of the project lifecycle. The group provides sophisticated legal solutions spanning contract negotiation, project administration, dispute avoidance, and litigation, drawing on deep experience in the construction industry.