Advanced Negotiation Skills for Mediators

25 October 2021

As an accredited mediator, would you know how to work with parties in this situation?

Let us assume that A plans to sue B for a breach of contract with damages of R100,000. Let us assume that it is an “all or nothing” case and both parties would incur legal costs of R50,000. to get a decision at trial. Before initiating a claim Party A suggests mediation and Party B agrees.

A very simple analysis of the parties alternatives to litigation might be as follows:

Plaintiff’s best possible case

  • Win the case and recover R100,000.
  • Recover say 80% of own legal costs from defendants, R40,000.
  • Not pay the defendant’s costs
  • Gain of R140,000.

Plaintiff’s worst possible case

  • Lose the case and lose R100,000. claim
  • Pay R50,000 of own legal costs
  • Pay say 80% of defendant’s costs, R40,000.
  • Loss of R190,000.

Defendant’s best possible case

  • Win the case and do not pay the Plaintiff’s claim
  • Do not pay the Plaintiff’s costs
  • Recover say 80% of own costs, R40,000
  • Loss of R10,000.

Defendant’s worst possible case

  • Lose the case and pay the whole claim R100,000.
  • Pay own costs, of R50,000.
  • Pay say 80% of defendant’s costs, R40,000.
  • Loss of R190,000.

In my mediation practice, I ask the parties and their legal representatives to bring costs schedules to the mediation so that discussions about these possible scenarios can take place. These conversations typically take place later on in the mediation process, during the bargaining phase. It is at this stage that I am working actively with the parties, coaching them on offers. This doesn’t mean telling parties what to offer. Instead, it means assisting parties make sensible decisions in relation to their alternatives, their best alternative to a negotiated agreement (BATNA), and their worst alternative to a negotiated agreement (WATNA).

These can be difficult conversations. Questions arise such as:

  • What is your first offer and what signal will it send to the other party about your negotiation strategy?
  • How do you think the other party will respond (to your first and subsequent offers)?
  • What else can you offer that might meet the other party’s needs and interests?
  • What trade-offs are you willing to make in this negotiation?
  • What do you think the zone of potential agreement might be in this negotiation (ZOPA)?
  • At what point will you walk away from the negotiation i.e. have you calculated your BATNA and WATNA?
  • At what point will you think the other party will walk away from the negotiation i.e. have you calculated their BATNA and WATNA?

Unfortunately, parties preparing for mediation are often not given much guidance by their lawyers on what mediation is or on these questions. Indeed, lawyers often do not have much mediation experience and have not spent time developing a negotiation strategy for mediation. This means that the mediator has to work with the parties and their lawyers at the preparation stage and during the mediation to help them define realistic goals for the negotiation and to develop options for achieving these.

Please join us for our next Advanced Negotiation Skills Mediators course on 2 November 2021 to find out how the mediator does this. To find out more and to join click HERE

- Felicity Steadman