Civil Litigation Legal Topics Litigation Strategy Practice of Law Settlement Negotiation

When Settlement Negotiations Hit a Wall

bumper_91824048Settlement negotiations rarely proceed in a smooth forward motion; in fact, most feel more like a ride in a bumper car with a jerky stop and start motion. A good negotiator learns to move past the inevitable impasses.

Here are 8 tips for negotiating past an impasse:

  1. Use Your Leverage. Leverage is all about how much power you or your counterpart have in the negotiation. Don’t use leverage like a blunt instrument by threatening what will happen if the case proceeds to trial, e.g., who will win and who will lose, what tactics you will use, or what your witnesses will say; instead, invite your counterpart to consider what would happen if the case did not settle, i.e., the likely costs, risks, and outcomes of pretrial motions and the trial.
  2. Use Objective Standards. Negotiations often devolve into a contest of wills, in which the stronger and more assertive you are the more you seem to get. In most cases this raises the level of contentiousness and increases the chances of deadlock. Find a neutral, objective standard that can be used to evaluate each side’s proposals, e.g., reported jury verdicts, information about comparable settlements. A standard that is neutral, reliable, and relevant stands the best chance of being accepted by the other side.
  3. Use Objective Procedures. If you and your counterpart can’t agree on an objective standard, consider procedures that might lend objectivity to the negotiation process, such as letting one side decide how to divide the pie and let the other side choose which piece of the pie to take, or soliciting the advice or judgment of a neutral third party.
  4. Name the Dynamic. If the settlement discussion is not productive or moving forward, figure out why you feel this way and express your intuition to your counterpart. Express your concern in terms of your subjective experience of the dynamic—one that is open to correction—and not as an objective judgment.
  5. Exchange More Information. You may need more information to settle the case if, e.g., you skipped the information-exchange process because you believed that settling the case would be straightforward. Ask the questions you need to ask or, alternatively, invite your counterpart to participate in a joint information-gathering session.
  6. Take a Break. If you notice yourself engaged in a battle about who is right and who is wrong, take a break and return to the table with a more constructive orientation. When you return, invite your counterpart to approach your negotiation not as a dispute but as a deal that may leave both sides better off than taking chances in court.
  7. Carve Out Issues. If there are intractable, discrete mini-disputes, consider disaggregating them for adjudication through a summary judgment or adjudication motion, or through arbitration. Maybe use a mediator or other neutral third party to help resolve those disagreements. Meanwhile, focus on the areas of the dispute that are amenable to negotiation.
  8. Reexamine Your Position. If you think you’ve reached impasse and believe it’s all your counterpart’s fault, think again. Perhaps this is a good opportunity to consider how things look from the other side’s perspective.

For excellent advice on negotiation and case settlement, turn to CEB’s California Civil Procedure Before Trial, chap 46. Also check out CEB’s program Overcoming Settlement Impasse, available On Demand.

Related CEBblog™ posts:

© The Regents of the University of California, 2013. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

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