Business Dispute Resolution: Mediation is an Assisted Negotiation

Date: 12/12/2017
Author: David Richbell
Company: David Richbell

Greater Manchester Chamber now has its own Business Dispute Resolution service, which can assist you if you're facing a dispute, whether it be commercial or civil.

This is the fifth in a series of six articles on mediation, by David Richbell, a mediator who has been helping parties resolve business disputes over the past twenty-five years. 

The article briefly covers the work needed before the mediation takes place.

The mediator’s role is to help parties reach a settlement, their settlement It is not the mediator’s role to decide the outcome or to advise the parties – it is the parties problem and the parties solution. The mediator is there to help them get the best deal possible, with their respective needs being met. As in any negotiation, if a party’s needs are being met, the deal will happen.

The first rule of effective negotiation is preparation. Plan the strategy, do the risk analysis, know your needs (and anticipate theirs), establish what is cheap to give but a gain to them, know your walk-away point. The worst negotiations, which often do not settle, are those where a party does not have a strategy or know when to say ‘yes’ or ‘no’ to a deal

Co-operation gets better deals

It may be counter-cultural but there is no doubt that parties working together to find a joint solution get the best deals. Adversarial, or positional, negotiation usually gets the minimum deal possible for parties to say ‘yes’. Co-operative negotiation looks for ways to enlarge the pie.

Enlarging the pie

Co-operative negotiation looks for adding value to the emerging outcome. Payment terms, payment in kind, property-swap, incentives all become possible. None of which are possible in Court or Arbitration. Knowing and meeting a party’s needs gets the deal. And co-operation inevitable strengthens relationships.

Incompatible negotiating strategies/styles

Not everyone has the wisdom to recognise that the best deals become possible with co-operation. Incompatible styles, for example one side being positional and giving little, slowly, whereas the other side is co-operative in style, may well cause a problem. The best response if for the co-operative negotiator to hold firm, explain to the other party why their way is best and wait until they reciprocate. Use the mediator to avoid a deadlock.

Knowing when to walk away

Harvard School of Negotiation call it the BATNA (the Best Alternative to a Negotiated Agreement). Know your walk-away point. It may need to be recalculated as the negotiation proceeds, but it provides confidence and there is nothing more impressive than a confident negotiator.

The final article in this series will be on the Concluding Phase of Mediation.

If this article has made you think mediation could help your business, you can visit www.gmchamber.co.uk/business-dispute-resolution for more information on the Chamber's Business Dispute Resolution service.