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Plaintiff is suing Defendant in a tort action for negligence and the court orders the parties in mediation.  While in caucus (private meetings with the mediator) each party discloses to the mediator evidence regarding likelihood of outcome at trial and damages.  The parties agree there are even odds on which party would, and the mediator agrees.

The plaintiff has good evidence showing that he has suffered $10,000 in damages, and with a 50% chance of winning, values the case at $5,000, but is willing to accept $3500 to reduce its attorney fees, and because it is slightly risk adverse.

The defendant has good evidence showing that plaintiff only suffered $2,000 in damages and as such values the plaintiff’s case only at $1000.  But, like the plaintiff, defendant wants to reduce its attorney fees and is risk adverse, and is willing to offer $2500.

The mediator believes that both damages valuations are reasonable, and that a jury is equally likely to agree with the plaintiff as with the defendant.

Because there is no zone of possible agreement (ZOPA), the mediator knows that mediation will not ultimately result in a settlement.  After caucusing with both parties, may the mediator immediately tell the parties that mediation will be fruitless and recommend that they proceed to trial?

(Ben Corman has complained that I post questions that I either don’t know the answer to, or which simply don’t have an answer.  In this case I actually know the answer, or at least an answer I think I could argue convincingly.)