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How Effective is Distributive Bargaining when the Parties are Hundreds of Thousands of Dollars apart?

by Jan Frankel Schau
March 2014

From Jan Frankel Schau's Mediation Blog

Jan Frankel Schau

 

I find that most of the cases that I mediate need a third party neutral because the two sides are evaluating both liability and damages very differently. The mediator is the bridge to some better understanding. But beyond the conceptual, how effective is it to conduct distributive bargaining by way of demand, offer, counter-offer and counter-demand when the parties start out with a demand of something like $1 million and an offer of $5,000.?

My experience recently tells me that the simple acting of loosening up the parties towards movement, even if it’s minimal, is useful to gain some momentum and narrow the chasm between the two sides.

In a hearing this week, the Plaintiff responded to that hypothetical $5000 offer with a drop of $100,000. The clever defense lawyer moved up another $5000 and was surprised to get another $100,000 drop in exchange. Though there was an obvious slowing at a certain point, the seemingly futile dance had begun, resulting in a mediator’s proposal within a field that had been considerably narrowed against what would otherwise appear to be great odds.

Yes, I’d say showing up to the dance is only the first step. After that, you actually have to get out onto the dance floor and take those first risky, uncertain steps before the rhythm of the music takes over.

 

Biography


Attorney Jan Frankel Schau is a highly skilled neutral, engaged in full-time dispute resolution. Following a successful career spanning two decades in litigation, she has mediated over 700 cases for satisfied clients. Ms. Schau understands the nuances of trial and settlement practice as well as client relations and balancing the needs of their representatives with the risk and expenses of trial. Those who have used Ms. Schau’s services recognize excellence in her persistence, optimism, creativity and integrity.

Ms. Schau was the President of the Southern California Mediation Association in 2007 and is recognized as among the most outstanding mediators in Southern California in the mediation of civil disputes by her peers and clients. She also serves as a Trustee of the Board of Directors of the San Fernando Valley Bar Association, and has presided as Chair of it’s Alternative Dispute Resolution Section and Litigation Section. She holds a Certificate of Advanced Skills in Negotiation from the Straus Institute for Dispute Resolution of Pepperdine University as well as from the Western Law Center for Disability Rights at Loyola Law School.



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Website: www.schaumediation.com

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