When do you cross the line and start providing legal advice?

Let’s assume the following mediation scenario:

A Vendor provides goods and services to a Buyer under a contract. The Buyer pays half upfront and then refuses to pay the remainder when he expresses displeasure with the service. The Vendor files suit against the Buyer, claiming damages of more than 3 times the amount due and payable under the contract. At mediation, the Vendor almost immediately reduces his demand to the amount due and payable plus court costs, and then freezes his position. After two plus hours, the Vendor continues to believe that he has made significant progress by reducing his demand by an apparent two-thirds.

Now, at this point, it might be useful to know that the Vendor is pro se and the Buyer is represented by counsel. For whatever reason, the attorney for the Buyer never pointed out to the Vendor that under the law, the Vendor could not have received three times the amount due under the contract, and was limited to the amount due plus consequential damages and interest (I’m simplifying of course).

The lawyer in me wanted to tell the Vendor that his “concession” was essentially worthless, because, he moved from an amount he could never legally recover to essentially the full amount of his claim. I controlled these strong urges and worked around the problem, finally getting the Vendor to come down to a number that the Buyer was willing to pay to resolve the dispute.

When I debriefed the case with the mediation coordinator and another mediator (within the confines of confidentiality, of course), they both believed that telling the Buyer what he could recover as damages was technically “providing legal advice,” which is considered a big no-no ’round these parts. I am not so certain. If the party’s bargaining position is founded on an erroneous assumption and pointing out that error may help progress the discussion, why shouldn’t a party benefit from my experience?

In divorce proceedings, for example, the mediator works through the parenting plan and child support guidelines with the parties, discussing what can and what cannot be considered when calculating child support. This is an interpretation of the law.

I am very interested in hearing from all of you on how you deal with this.