Recently, I conducted a mediation during which the matter did not settle. However, after the mediation session was over, the parties continued to negotiate- trading monetary demands and offers back and forth. It was a credit reporting case in which plaintiff alleged and defendant denied that an alleged credit transaction had been reported erroneously to the credit reporting agencies. The settlement came down to money; how much would plaintiff receive and how much would her attorneys’ receive in fees (as authorized by statute to be paid by defendant)?
As the post mediation negotiations progressed, plaintiff’s attorney seemed to get angrier and angrier each time I conveyed Defendant’s latest offer which was always minimal. Defendant just was not willing to pay the amounts demanded by plaintiff and increased its offer ever so slightly in response to what it viewed as Plaintiff’s highly inflated demands.
Why was the plaintiff’s attorney getting so angry? After a few moments of thought, I recalled attending a seminar presented by J. Anderson Little about negotiating money claims. I found an article on line which shed some light on what was truly happening.
According to Mr. Little, many negotiations, in reality, are traditional bargaining – that is, distributive bargaining in which the parties give or take. It is fixed pie to be divided; not one to be expanded by integrative bargaining and problem solving and “thinking outside the box”.
So, the parties communicate indirectly by offering money. They react to the other’s party demand/offer by offering either very little or a lot. That is, if plaintiff is dissatisfied with the tiny movement made by defendant, plaintiff reacts by making a similar small move downward to indicate her displeasure with defendant’s latest move.
This is where the emotion shows up; the parties get angry, frustrated, if not insulted with the other side by the indirect “conversation” of a small move in response to plaintiff’s prior move. It is taken as criticism of the other person, personally. The “message” is that the move was unacceptable/ “you are unacceptable”. But, in the words of Ury and Fisher in Getting To Yes-we should “be hard on the problem; be easy on the people” and thus read a different meaning into it; it is all about the case, not us personally. (Id. at 8.)
The parties will not have a direct conversation and tell each other what amount is really needed to settle the case or the most to be offered, because neither wants the downward/ upward pressure that the other side will place to go either below or above the “bottom line”. So, the dance is done, and the communication is indirect.
Mr. Little asserts that this typical negotiation gets matters off on the wrong foot. To correct this, each party should – prior to the mediation- determine what is her Best Alternative To a Negotiated Agreement (BATNA) or “walk away” number, and then during the negotiation, make movements in response to one’s own “bottom line” number; do not react to the other party’s movement but simply plot your moves according to your own ultimate number.
The other suggestion is to use the principle of reciprocity; a big move will be responded to with a big move:
Movement towards the other side breeds movement. The closer we come to the other side, the more incentive there is for the other side to move. Movement creates the perception that settlement is possible and that perception creates a further impetus to move. (Id. at 7)
So, the next time you are negotiating monetary amounts, consider that: (1) you are indirectly communicating your view of the other’s side position which may cause her to get angry or frustrated or vice versa; (2) you should determine your own “bottom line” and negotiate independently of what the other side does, with that ultimate number in mind; and (3) big moves will breed big moves.
….. Just something to think about.
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