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The basics of settlement negotiation
- A settlement is an agreement to resolve a dispute.
- Negotiation is a communication process to reach a compromise or agreement.
- Settling saves court and travel costs.
- Personal matters, like illness, won’t interfere with negotiations.
- Settling avoids litigation-related stress and time.
- Sometimes parties walk away not feeling as if they’ve won.
- Conflicts aren’t always easily resolved.
- Often, neither party knows how much the other will settle for.
- Settlement negotiations also take time and patience.
- Mediation is facilitated by a third party but is more flexible than litigation.
- Mediation can end the litigation.
Factors in successful negotiation
- Two parties have to be at the table and willing to negotiate.
- Some interests in common: For example, both parties might want to save time, save money or reduce stress.
- Decision-making ability: All sides involved in a negotiation must have the capacity to weigh choices and make decisions.
- Interdependence: The reliance on the other party to achieve your own goals.
- Flexibility: Being flexible means relying on more than one option in a settlement.
- Communication: The parties exchange information in order to influence or inform the other side is also crucial in negotiations.
Making and evaluating settlement offers
- Don’t talk to the other side about settling until you know how much you’ll settle for, what your chances are of winning, and the degree to which you want out of the case.
- Research your opponent and ask questions. What are your concerns? What do you want to happen?
- All sides involved in a negotiation must have the capacity to weigh choices and make decisions. You have options based on the strength of your case, case law, cost of continuing to litigate, and more.
- Understand your case and consider a wide range of outcomes or options.
- Avoid a situation where one side can get their needs met without negotiating with the other side.
- Develop a hierarchy of desired outcomes and alternatives, and try to reach an agreement within your limits.
- Leave some wiggle room to negotiate down from the upper limit of what you will settle for and up from your lower limit.
- It’s okay to start negotiations at the upper limit, but don’t refuse to adjust.
- Evaluate the quality of an offer by the limits you’ve set.
- Base your limits on the strengths and weaknesses of your case, and make them realistic.
- You might want to settle, but don’t appear too eager. Communicate to your opponent that you’re willing to go to trial if need be. Follow this up with discovery, filings as appropriate, as if you’re going to trial.
- You don’t want to leave negotiations feeling as if you settled for less than the case was worth or you paid for something you shouldn’t have. So you want to understand the value of the case by determining the possible outcome of litigation and balancing that with the needs, strengths, and weaknesses of each side.
Transcript
Hi. This is Portia, and welcome to settlement negotiation, the final lesson in our course on introductory legal skills.
In this lesson, we\’ll look at the basics of settlement negotiation, the factors involved in successful negotiation, and making and evaluating settlement offers.
Then we\’ll wrap up with a course review.
A settlement is an agreement to resolve a dispute.
Negotiation is a communication process to reach a compromise or agreement.
Reasons to settle are numerous.
Settling saves court and travel costs.
Personal matters like illness won\’t interfere with negotiations.
Settling avoids litigation related stress and eliminates the time involved in writing motions and pleadings.
In settling, parties can be flexible with timetables and rules.
The disadvantages of settling?
Sometimes parties walk away not feeling as if they\’ve won.
Conflicts aren\’t always easily resolved, and often neither party knows how much the other will settle for.
Settlement negotiations also take time and patience.
Unlike two party settlement negotiations, mediation is facilitated by a third party.
However, parties can draft their own rules and select the mediator.
Mediation can take place before or during litigation and can end litigation.
It requires consent and planning by both parties. It can also be ordered by a judge.
It goes without saying that it takes two to negotiate.
That is, the parties involved have to be at the table and willing to negotiate.
It pays to have some interests in common.
For example, both parties might want to save time, save money, or reduce stress. If there are no interests in common, one or both sides might not value negotiation in the same way.
Ultimately, the people taking part in the negotiation should be the people who are most affected by the outcome, and thus can sign on the dotted line and move the litigation off the docket.
Interdependence is reliance on the other party to achieve your own goals. You want positive interdependence where one person having his goals met means the other person has a better chance of having his met.
Being flexible means relying on more than one option in settlements.
Communication, in which the parties exchange information in order to influence or inform the other side, is also crucial in negotiations.
For instance, if one party knows of a pivotal case, witnesses, or facts that would give them a strong upper hand in litigation, they might communicate this to the other side to encourage them to settle.
After a hearing in which you won on your motion, the attorney for the opponent asks you what you want in settlement.
Chances are, he\’s thought about it a lot and knows what his client will settle for and why.
You\’ve thought about a settlement, but not strategically.
You\’re physically in the game, but not mentally. Don\’t answer yet.
Make an excuse and get back to him when you know how much you\’ll settle for, what your chances are of winning, and the degree to which you want out of your case.
In short, be there mentally and physically.
If possible, research your opponent and ask questions.
What are your concerns?
What do you want to happen?
If you\’re up against Bank of America in a foreclosure case, you know enough about them to realize that they may settle for a deed in lieu rather than continue litigation.
It might be cheaper for them, especially if you\’re a very capable pro se litigant.
All sides involved in negotiation must have the capacity to weigh choices and make decisions.
You have options based on the strength of your case, case law, cost of continuing to litigate, and more.
Understand your case and consider a wide range of outcomes or options.
It\’s important to not let one party dominate.
Avoid a situation where one side can get their needs met without negotiating with the other side.
Develop a hierarchy of desired outcomes and alternatives, and try to reach an agreement within your limits.
Leave some wiggle room to negotiate down from the upper limit of what you want to settle for and up from your lower limit.
It\’s okay to start negotiations at the upper limit, but don\’t refuse to adjust.
Evaluate the quality of an offer by the limits you\’ve set. Base your limits on the strengths and weaknesses of your case and make them realistic.
If the value of the entire case is ten thousand, don\’t set a limit above this amount. There\’s no better signal to the other side that you don\’t know what you\’re doing.
The vast majority of legal cases never reach trial, so settlement is the norm.
You might want to settle, but don\’t appear too eager. Communicate to your opponent that you\’re willing to go to trial if need be.
Follow this up with discovery and filings as appropriate, as if you\’re going to trial.
That way, you have leverage when you negotiate.
You don\’t want to leave negotiations feeling as if you settled for less than the case was worth or you paid for something you shouldn\’t have.
So you want to understand the value of your case by determining the possible outcome of litigation and balancing that with the needs, strengths, and weaknesses of each side.
If, for instance, the plaintiff\’s claim is very strong, the settlement value will be higher than if the defendant\’s case is strong.
In the basics of settlement negotiation, we discussed reasons to settle, disadvantages of settling, and mediation.
The elements of successful negotiation discussed requirements such as two parties, common goals, and decision making ability.
Making and evaluating settlement offers included being present, identifying goals, knowing your options, and other settlement techniques.
The first lesson discussed ways to be assertive, fearless, and focused in litigation.
Lesson two, developing a legal strategy focused on litigation goals, tactics, and legal position.
In lesson three, we used litigation documents to discuss legal writing.
Lesson four, conducting legal research, discussed ways to find and analyze legal authorities.
Lesson five, crafting a legal argument, used legal authorities to craft sample arguments.
And lesson six looked at court protocol, behavior, and procedures.
The focus of lesson seven was courtroom oral argument.
The final lesson discussed settlement negotiation techniques.