A Big Piece of Pie!

I had a strange mediation last week. Neither side submitted briefs, and so I was in the dark about what the mediation was about other than an automobile.

The mediation was conducted by telephone. I called plaintiff’s counsel and after introducing myself, the first thing counsel asked was whether she could give me her settlement demand. I responded by suggesting that she tell me a little bit about the case. She did so but then gave me her settlement demand.

I then spoke with defense counsel who also told me a few of the facts in conclusory fashion. I told her what plaintiff’s settlement demand was, and her comment was that it had increased from their previous discussions of settlement.

The views of counsel were diametrically opposed: Plaintiff’s counsel believed her client’s case had immense value while defense counsel believed it lacked any merit. Needless to say, it did not settle.

But Plaintiff’s request to give me the settlement demand at the very start got me thinking about the several types of negotiation. Plaintiff’s counsel was engaging in distributive bargaining, also called competitive or win-lose bargaining:

In distributive bargaining, the goals of one party are usually in fundamental and direct conflict with the goals of the other party. Resources are fixed and limited, and both parties want to maximize their share. As a result, each party will use strategies and tactics to maximize his or her share of the outcomes….” (Lewicki, Roy J., Saunders, David B., Barry, Bruce, Essentials of Negotiation (7th ed., Mc-Graw Hill, NY 2021 at p. 26-27.)    

The negotiation was simply how big of a piece of the pie (that is, how much money) can counsel obtain both for her client and for her attorneys’ fees. Addressing the issues were not a concern.

In explaining the facts to me, I learned that the issue was whether the air vents allegedly were emitting particles that were supposedly unsafe to breathe. Had plaintiff’s counsel been concerned about addressing this issue, she would have engaged in integrative bargaining in which the needs, interests and objectives of all parties are addressed. (Id. at 58.) “One party’s gain is not at the other party’s expense” (Id.)

In an integrative bargaining negotiation, the parties first identify and define the problem, then identify the needs and interests of each party, then the parties brainstorm or otherwise generate workable solutions to the problem and finally evaluate the alternatives and choose among them. (Id. at 61.) While the first three steps involve “creating value,” the last step focuses on “claiming value.” (Id.)

In contrast to the above is the mediation under discussion. It was all about “claiming value.” During our discussion of the facts, I learned that the vehicle was being leased with a few months left on the lease. So, I asked counsel if her client wanted to work on a solution that allowed for an early termination of the lease since allegedly, the vents were emitting air that was harmful to breathe. After speaking with her client, counsel said “no;” her client wanted to keep the vehicle and be paid her settlement demand. (I do not know plaintiff’s reasoning: perhaps it would be almost impossible to lease another vehicle given the shortage of vehicles due to the chip shortage etc.)

The moral of this tale is to figure out beforehand what type of negotiation you are about to undertake. Is it simply about the money and thus how large will be your piece of pie? Or will it be one in which the parties are truly trying to resolve the problem at hand (rather than simply putting a band-aid over it) by delving into the needs, interests and goals of the parties? Whichever way you go, do so with some preparation!

… Just something to think about.

Phyllis Pollack

Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as… MORE