With occasional exceptions, it’s been my experience that settlement negotiations tend to break down for one primary reason: one or more of the parties have chosen to employ various negotiating strategies and tactics which prevent the parties from reaching the “outer limits” of the dispute.
Whether designed to gain the upper hand or simply as a pre-emptive strike, one party may make a tactical decision to negotiate from the extreme end of the spectrum. Reacting to that party’s tactics, the opposing party adopts the same strategy, with results that are easy to predict. Eventually, one side’s frustration builds to the boiling point and, drawing a line in the sand that will undoutbedly be washed away sometime down the road, the decision is made to terminate negotiations.
Personalities, egos, timing and legitimate differences of opinion can all be contributing factors, but impasse occurs more often than not because one party decides to end negotiations before reaching what reasonable minds would consider to be the true parameters of the dispute.
Conversely, it’s been my experience that if the parties can find a way to reach the “outer limits,” they will usually find a way to bridge the gap. That being the case, it’s important to identify the “outer limits” in every dispute and to employ every possible strategy to reach them.
When negotiations get bogged down beyond the “outer limits,” it can be useful to privately ask each party to consider at what point they would begin to find it difficult to reject a Statutory Offer to Compromise, pursuant to CCP Section 998 (“998 Offer”).
For example, if plaintiff concedes it would be difficult to reject a 998 Offer of $125,000 and defendant admits it would be difficult to reject a 998 Offer of $75,000, it’s a safe bet that those numbers are much closer to the real “outer limits” of the dispute. For the parties to refuse to engage in further negotiations when they are at $250,000 and $25,000, therefore, would simply be foolish.
Once the “outer limits” have been identified, one strategy for reaching them is to suggest using a conditional or bracketed proposal – i.e., simultaneous moves, agreed to in advance. Bracketed proposals often foster greater trust and cooperation between the parties. They also reveal a wealth of information, giving each side a window to the other side’s thinking, which is often all that’s needed to get negotiations back on track.
When the parties continue negotiating until they are able to reach the “outer limits,” they will frequently find there were never any real limits to achieving a settlement in the first place.
As always, it would be my pleasure to assist you and your clients in the dispute resolution process. Please don’t hesitate to contact me if I can be of service.
Best regards . . .
Floyd J. Siegal
fjs@fjsmediation.com