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Rules for Negotiating in Litigation – 5 Things You Must Know Before Going Into The Room

The art of negotiating is a life skill and is crucial to master for any disputes in business situations or your personal life. Executing a well planned negotiation, especially when drawing close to the conclusion of the matter whether it be at mediations or at the door step of trial, can yield tremendous results. So how do you get the most out the situation? Consider the following points below to put yourself and your advocate in the best position prior to going into the negotiating room:

  1. Know your bottom line– Is what you are asking for reasonable? Does the law support your position? Are you relying on the general presumption at law or  are you seeking to rely on an exception to the law? Whichever the case, only you know how much you have spent not only in legal fees, but time and effort to reach the pivotal moment of being in a position to settle a dispute that has possibly dragged on for months (or even years). Only you can place a financial value and how much settling the matter is worth to you if you can put the dispute to bed and move on with your life. Thus, be clear of the figure that will allow you to finalise the matter early, compared to having it proceed to trial and deal with the uncertainty of the outcome. If the matter proceeds to trail you put your fate in someone else’s hands.
  2. Know why you are there in the first place– Whilst this is harder said than done, particularly when you have probably invested emotion into the outcome, try to not let emotions such as spite and revenge get in the way of a settlement. That’s the reason why you engaged professionals in the first place: impartiality, objectivity and disinterest. When at the pointy end of discussions, be sure to trust your advisors and their advice.
  3. Know your limits – When “final offers” are being made by either side, there may exist the temptation for one side to call the other side’s bluff. While this may be a common strategy in negotiating, just be wary and cognisant that the other side might call your bluff. If you are wrong, are you prepared to walk away from the table and proceed to court? Can you afford your solicitor’s fees and also the legal costs of the other side if you lose at trial? Determine all the risks involved and only make genuine offers that you can accept.
  4. Know the consequences– It’s said that only a small number of cases proceed to trial (no more than 5% of disputes) ever proceed to court.  That means that about 95% of cases will settle prior to the hearing. This means that your matter could settle at any stage including discussions prior to mediation, at the mediation conference itself, post-mediation but before trial, on the door steps of the court, etc. Nevertheless, most cases will contain standard (yet strict) terms of settlement that you will bind you legally and any breaches may attract penalties or open you to a fresh law suit. Are you aware of the effects of an agreement recorded in a terms of settlement or an agreement recorded in a deed? Do you know the difference between a clause of ‘no adverse comments’ compared to ‘no derogatory comments’, or how the confidentiality clauses will affect you from telling other parties that may have been involved but did not form under your agreement to settle? What if you have other claims against the other side – does this settlement preclude you from bringing any and all actions against them in the future? Be sure to table all your concerns, possible causes of action(s) against the other side and get clarity on your entitlements and obligations under the agreement prior to signing as it may affect your future rights.

Know yourself – Although you are surrounded by legally trained professionals and advisors, ultimately it’s your claim, your settlement,  and your signature. Similar to the earlier point made in the first paragraph, only you know the true value of the claim. Generally speaking, there is no cooling period once the document is signed, there is no turning back, so make sure that you do not regret your decision. While lawyers deal with settling disputes on a daily basis, for most people this will be a once-off occasion so take time to consider the personal cost and impact to you and your family and ensure that you do not regret not going to trial or not settling the matter earlier on when you had the chance.


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