Increasing the Likelihood of a Data-Based Resolution During Mediation: Knowing and Understanding Your BATNA
Wed, Apr 1st, 2026 | by Miles Mediation and Arbitration | Article | Social Share
Any review of current legal headlines will include articles noting crowded court dockets. This crowding is predicted to be exacerbated by the high court’s Loper Bright decision. Thus, the pressure on parties to mediate and resolve cases efficiently and effectively will, no doubt, increase.
Though the statistics vary, civil cases in recent years have about a 97% chance of resolving prior to a trial verdict. As such, and logically, mediation remains an ever-important tool in every litigator’s toolbox. Therefore, preparing for a mediation in a way that increases a party’s chances of achieving a successful mediation is more important now than ever.
Using BATNA and WATNA at Mediation
Preparing for mediation by estimating your BATNA and WATNA can lead to more data-driven results. The term BATNA, the best alternative to a negotiated agreement, was first described in Getting to Yes: Negotiating Agreement Without Giving In by Roger Fischer, William Ury, and Bruce Patton. Simply put, the BATNA is the best option or outcome available if you do not accept the best offer made in a mediation.
The WATNA is the worst alternative to a negotiated agreement. Even though much more is written and discussed about BATNAs, a WATNA can also be important to know. A primary reason for clients to know their BATNA and WATNA before a mediation is to help them make more informed decisions during the mediation.
Calculating BATNA
For example, assume that you represent the plaintiff, ABC Company, and ABC is seeking $1,000,000 for breach of a contract. In the mediation, let’s say ABC is offered $600,000 to settle. Is that a good settlement? Does ABC take it or walk away? You cannot really know the answer without further information. Without more information, ABC cannot make an informed decision. ABC needs something to which to compare the offer. That is why ABC needs to know, at a minimum, its BATNA.
A party’s BATNA and WATNA take time to develop. Thus, a party needs to prepare for the mediation by ascertaining and assessing its alternatives to a mediated resolution. Prior to the mediation the party should assess its alternatives in the event the case does not resolve at mediation; from those alternatives, the party must determine the best (realistic) alternative or path it will take if the lawsuit or claim does not settle at mediation.
Continuing with the same example from above, ABC’s counsel believes ABC has a 70% chance of prevailing at trial. Further assume that the contract has a prevailing party provision for attorneys’ fees. So, if ABC prevails, it will get its attorneys’ fees reimbursed (under ABC’s best-case scenario). As such, ABC’s attorneys’ fees would be a wash, if ABC prevails, because ABC would presumably be reimbursed the attorneys’ fees it paid out in advancing its lawsuit. Thus, if ABC’s best alternative is to continue with the litigation, its BATNA can be calculated as: .7 x $1,000,000 = $700,000.
Now we have something to which to compare the mediation offer of $600,000. We have some context in which we can evaluate the mediation offer. So, instead of just guessing whether the mediation offer is a good number for ABC, we evaluate the offer in the context of ABC’s alternatives. Is ABC now ready to reject the offer at mediation? Or could some further information help ABC with its “take it or walk away” decision at mediation?
Calculating WATNA
Continuing with the same example, let’s say ABC also had its counsel – in advance of the mediation – calculate a WATNA. The worse case scenario for ABC is losing at trial. ABC counsel has estimated $500,000 in attorneys’ fees to get the case through trial. If ABC loses on its claim (and assuming no counterclaims), ABC will get $0. But ABC would have had to pay its lawyer $500,000. And due to the prevailing party contract provision, the defendant will seek its attorneys’ fees, so assume the defendant’s counsel fees would also be $500,000.
In its most simplistic form (and ignoring a number of non-economic business considerations that can come into play in making settlement decisions), the WATNA for ABC is -$1,000,000, meaning if ABC loses the lawsuit, it will be out another $1,000,000 of “good money” spent suing the defendant; this is in addition to not recovering any of its alleged $1,000,000 of contract damages. Put differently, the WATNA for ABC would be it obtaining nothing (no recovery) from the lawsuit and having to pay $1,000,000 total for attorneys’ fees.
At this juncture, we know the mediation offer is $600,000, and ABC’s counsel believes that ABC’s best realistic outcome is getting $700,000 if the case goes to trial. And we know that if ABC loses the case, it could be out another $1,000,000 (worst case scenario). Is the $600,000 mediation offer looking more attractive? Do you agree that some clients, depending on their own situations (such as whether the worst-case scenario of paying $1,000,000 would have a profound, negative impact on the business) would accept the $600,000 to manage risk? Presumably, some businesses would take the mediation offer and some would walk away to go try the case.
Calculating MLATNA as Well
But let’s say that prior to mediation, ABC’s counsel also provided ABC with its most likely scenario if the case proceeded to trial. Although ABC’s counsel already advised that ABC has a 70% chance of getting a favorable or positive verdict at trial, ABC’s counsel further advised ABC that the $1,000,000 damages claim was not an “all or nothing” sum. Instead, ABC’s alleged breach of contract creates various types of damages, some of which will be easier to prove than others. ABC counsel therefore advised that the most likely trial scenario would be proving damages of $800,000. Thus, ABC’s most likely alternative to a negotiated agreement (MLATNA) is .7 x $800,000 = $560,000.
Here is a recap of what we know:
Best offer at mediation: $600,000
BATNA: $700,000
WATNA: ($1,000,000)
MLATNA: $560,000
Based on these numbers, many prudent risk managers would take the mediation offer of $600,000. The decision-making process is very different when ABC can compare the mediation offer to its estimated non-settlement scenario numbers. Information here is power. Information here helps take the guesswork out of the “take it or walk away” decision. Information here allows ABC to negotiate from a position of strength.
Caveats to Keep in Mind
There are several key caveats when calculating alternatives to a negotiated agreement. First, they take time and effort, so they should be done in advance of the mediation. Knowing your options and costs prior to the mediation can help inform your strategies during the mediation.
Second, keep in mind that BATNAs and other calculations are all estimates. They are important but they are not precise. And in some cases, due to the complexity of the facts, the alternatives may be rougher estimates than others. Also, these pre-mediation calculations are meant to help with the decision-making process, but much can be learned during the mediation that may impact those calculations and options or alternatives. The takeaway? Use these tools and update them when feasible.
Third, and keeping in mind that these figures are estimates, there is always a benefit to a “bird in the hand” – that is, the known from the unknown.
Fourth, this article, by design, does not address a myriad of non-economic factors that should often weigh into the pros and cons of a given mediation offer.
Finally, two additional noteworthy issues are beyond the scope of this article. One is whether and when to reveal your client’s BATNA in a mediation; this is always a key strategic issue to consider. The second issue is that it can be very helpful to calculate the opposing party’s BATNA, WATNA, and MLATNA prior to the mediation.
This may – but won’t always – help you focus on realistic expectations, and it also may assist you with strategies for the negotiations at the mediation. Caveats aside, hopefully the use of BATNA/WATNA/MLATNA analysis will help better inform your clients’ decisions during future mediations and lead to better, data-driven resolutions.
*Originally published in Missouri In-House Counsel and reprinted with permission.
About Ed Cohen
Ed Cohen is a mediator who has spent most of his career focusing on a national litigation practice addressing and resolving complex lawsuits, most of which have involved environmental issues. He has been a partner at Thompson Coburn LLP for more than 30 years, splitting much of his time between St. Louis and Chicago offices.