Southern California Mediator
A mediator's proposal is a "take it or leave it" number proposed by a mediator, typically in writing. Each party will generally be given a limited amount of time to accept or reject the proposal. Usually a mediator's proposal is made at the end of the day. Other times, the mediator will extend the proposal a day or two after mediation. The mediator's proposal is usually a number neither side likes.
If both parties agree, the case is settled. If one party agrees with the proposal, and the other does not, the mediator will not disclose the acceptance to the other party, but advises both parties there is no agreement. If neither accepts, there is no settlement, and the mediator informs both parties there is no agreement.
The benefit to a mediator's proposal is that the mediator can suggest a number neither side is comfortable offering. This could be because neither wanted to make the first move, or some other reason.
A mediator's proposal should not be characterized as a recommendation. The proposal should be based on the mediator's experience. It should be a suggestion as to what the mediator believes both sides might be willing to accept.