#10321 - Negotiation - BPC Alternative Dispute Resolution

NEGOTIATION

Ethos

Why negotiate?

• out of court settlement motivated by fear and flexibility

  • Fears

    • maverick judge - lose a cut and dry case due to judge making unexpected judgment

    • unexpected turn of events during trial - witness could not perform

    • shrinking pie - the longer proceedings are, the more costly it is; the earlier you can settle the more there is to share about

  • Flexibility

    • parties can settle in ways judge would do very slowly

What are we trying to do?

• negotiation is about analysis of risk

  • can't agree on what happened BUT can agree on what judge likely to make of what may have happened

  • insurance salesman analogy; settling for less cf selling insurance against getting even less (or paying more) if case went to trial

  • ID risks and price them

    • what are the risks of us not winning?

    • what are the risks worth?

    • what should client concede to obviate risk?

      • How much less you'd accept (than your pleaded case) depends on odds of winning or losing e.g. 25% chance of losing 25% reduction from pleaded case

  • try to persuade opponent that your analysis of risk is the correct one

Structure

Scenario 1 - usual for contract cases

• character - clear pairing of distinct items of damage with distinct issues on merits

• conclusion - go item by item and make real money offers based on risk of losing argument on relevant issues

Scenario 2 - usual for tort cases

• character - big issue (normally liability) which affects all items claimed

• conclusion - tackle issues and scale whole claim down by a percentage in order to reflect the risk that C might lose everything by failing to prove D as liable

Scenario 3 - mixed cases - e.g. nuisance and behavioural cases

• character - general discussion on pervasive/global issues and a more detailed discussion on an item-by-item basis

• conclusion - proposals will be made in terms of moderations to behaviour, reflecting the likelihood of the court stepping in to moderate the behaviour

Professional ethics

• be clear on instructions, which issues they relate to + don't exceed

• authority

  • usually have authority to negotiate on basis any agreement = provisional + subject to client approval

  • if only have authority to settle for over-optimistically high figure, negotiation unlikely to succeed

• treat opponent with professional courtesy

• don't

  • invent or misrepresent instructions, evidence or law

  • indicate client's offer final if isn't

  • conceal information that should be disclosed

  • threaten improper adverse consequences, or things unrelated to case

  • change position and deny having done so

Planning

• Work out what items are on the table

• Identify as neatly and simply what the issues are

• Consider the right structure

• Consider your ‘opening position’ – i.e. set the tone on whether you are going to be cooperative etc

• Have a note of the arguments on both sides

• Have a sense of what risks you want to point out to the other side

• And those that you will acknowledge is made against you

• Consider what ‘price’ you put on those risks

• Seek concessions and make concessions logically linked to your risk analysis

• Realise that not everything is about money, and some objectives are non-financial

• Have a bottom line, and know when to walk away i.e. where you'll be better to go to trial

Consider the procedural stage the case has reached

• very early stage

• pre-action protocol stage

• after issue of proceedings

• case is being prepared to trial (court door)

STYLE AND STRATEGY

• style - essentially the manner of presentation

• strategy - overall plan for getting best outcome

  • can sometimes use style to mask style e.g. friendly style, aggressive strategy

2 main styles

• cooperative - friendly, courteous, conciliatory, seeking to gain trust

• competitive / confrontational - making demands, argumentative, emphatic language (extreme form can be perceived as bullying)

3 main strategies

• cooperative

• competitive

• collaborative

Cooperative

• focus is on reaching agreement which is fair and reasonable to both sides

• info is shared

• concessions come from both sides

• strengths

  • likely to reach agreement

  • appropriate concessions seen as principled and not as a weakness

  • can support continuing relationship between parties

  • negotiations less likely to break down

  • should reach settlement quickly

• weaknesses

  • can be undermined by competitive opponent

  • settlement may become main goal rather than achieving client's objectives

  • can lea to unnecessary concessions and weaker outcome for client

  • can be tempting to make early unilateral concession which limit room to manoeuvre later on

  • may try to avoid confrontation

Competitive (or positional)

• seeks to win and get best outcome for client

• strong stance on each issue and slow to yield

• little interest in concerns/objectives of opponent

• settlement not key goal (walk away as opposed to accept unfavourable terms)

• strengths

  • can be v successful at achieving good outcome

  • research shows high starting point tends to produce better settlement

  • likely to be most successful where few issues and based on money

  • works well where power imbalance

  • little chance of exploitation

  • easy to use

• weaknesses

  • many lawyers not susceptible

  • can damage ongoing relationship

  • use of pressure can make settlement less likely

  • can be undermined by well prepared opponent

  • not effective with complex issues

  • unlikely to work is hope to get lots of info from opponent

  • can create misunderstanding

Collaborative

• Parties exploit their underlying interests, share information and are creative in finding

• solutions.

• Not necessarily limited by original issues – identify options for mutual gain.

• More than cooperation – requires advance analysis and planning (both parties need to take same strategy)

• Particularly useful where an ongoing relationship

• strengths

  • Capable of achieving very good outcomes (e.g. Mutual shared opportunities).

  • Good chance of success – focuses on issues going forward not in the past

  • Even if no agreement conflict is usually decreased

  • Techniques to expand resources can be beneficial

  • Rational and reasonable approach relatively easy to manage

  • Well prepared collaborative strategy can be...