Friday, March 14, 2014

Is Distributive Bargaining Worthwhile when the Parties to a Negotiation are Hundreds of Thousands of Dollars Apart?

       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.