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How we resolve our disputes

Entries in negotiator (4)


Negotiating with terrorists

I went to hear Moty Cristal speak tonight.  Mr. Cristal is an Israeli professor of negotiation dynamics and a negotiating strategies consultant.  His company, Nest Consulting, provides complex negotiations and crisis management training, consulting and operational support to senior executives in the public and private sector in the US, Europe, Asia and the Middle East.  He was instrumental in negotiating the release of Israeli soldier Gilad Shalit last year.  Many people have been critical of the deal, which exchanged more than 1,000 Palestinian prisoners for a single Israeli soldier.  However, Mr. Cristal is an expert in low-trust negotiations.  It is difficult to second guess decisions made in such situations. 

Everyone says you should never negotiate with terrorists.  But everyone does it when there is no other feasible or reasonable alternative.  The argument against such negotiation is that it will only encourage more terrorism.  But history does not support this theory.  No more Israeli soldiers have been captured, nor has there been any attempt to do so since Shalit’s release.  The more time that goes by, the harder it will be to blame any such incident on this negotiation.  The fact is that when terrorists negotiate, they may still be terrorists, but they are not engaging in terrorism while they do so. 

In a civil society, we never negotiate or mediate with parties whose members or representatives have killed members of the opposing party’s group.  And usually there is a deadline for the parties to negotiate a settlement or else a resolution will be imposed on them by some outside entity, like a court.  In the Middle East today, there is no such Sword of Damocles, so there is no motive for either side to negotiate or change positions.  Nonetheless, negotiations do go on.  Small issues constantly need to be resolved, regarding water, electricity, transportation and tourism.  Name-calling (terrorists, occupiers) never achieves anything.  Who knows.  One day, maybe the small negotiations will turn toward larger issues?


Caveat negotiator

An excellent article in the current issue of the Wisconsin Lawyer, titled “Negotiating in the Red Zone,” discusses the risk of legal malpractice liability for lawyers conducting settlement negotiations for clients.  The “red zone” occurs when an opposing party makes an offer within the client’s stated acceptable range but the attorney believes that they can obtain a better offer by rejecting it and negotiating further.  The risk is that the opposing party will terminate the settlement discussions and a trial will result in a worse outcome.  The author argues that lawyers are more vulnerable to professional liability when a settlement opportunity is lost in red-zone situations than in non-red-zone cases.

The article suggests that attorneys fully advise clients of the risks and benefits of continuing negotiations in such situations, and that they document and not deviate from the client’s agreed-on strategy.  It also mentions that this advice should be followed even in mediation.  It does not discuss how the mediator should address or participate in the decision to accept or reject a red zone offer.  At a minimum, the mediator should be aware of the ethical considerations and risks of liability that the attorney is facing.  While the mediator probably has no obligation to advise the lawyer of the heightened risk, doing so could enhance the prospect of a final settlement.  Without a participant’s consent, a mediator cannot disclose whether an offer is a final bottom line.  But the mediator can help attorneys and their clients to intelligently consider and evaluate the risks and benefits of continuing to negotiate versus accepting an offer.  The mediator might also help to document the attorney’s advice and the client’s decision regarding red zone negotiation strategy.  Thus, a mediator may help to reduce the attorney’s risk of ethical problems or professional liability. 

In other words, the article demonstrates another reason to seek out a mediator to assist in delicate or complex negotiations to resolve litigation or civil disputes.


Don't forget the attorney fees

We often hear complaints about the high costs of attorneys fees.  So how could anyone negotiating a settlement of a legal dispute forget about them?  Apparently, it happens.  In a recent Wisconsin Court of Appeals decision, the court held that a party who successfully settled a will dispute could not recover attorney fees despite the existence of a statute that provided for an award of attorney fees to a prevailing party in all appealable contested matters.  (In re the estate of Estate of Wolf)  Key to the decision was the fact that a settlement, by definition, is not an “appealable contested matter.”  If the parties agree to settle, neither side prevails and neither is aggrieved.  Therefore, neither side can appeal.  The courts obviously have no interest in inspecting every settlement agreement to determine who “prevailed.” 

Of course, the settlement agreement could have mentioned attorney fees, but it did not.  It would have been a simple matter for the agreement to state whether or not it included attorney fees.  By now, it should be routine for attorneys or mediators to raise that issue in settlement negotiations, especially where a fee-shifting statute arguably applies to the subject matter of the dispute.  In the absence of a provision in a settlement agreement reserving the right to seek attorney fees in court, parties to the settlement naturally expect that the settlement puts an end to the matter.  The moral of this story is that the settlement agreement should specify whether or not it includes attorney fees. 


Healthcare Options

Attorneys, negotiators and mediators are used to the concept of determining or creating options.  To us, options are good things.  We might take them or leave them, but it is good to know what they are and that they are there if we need them.  Apparently, some Senators, Congressmen and a large portion of the American public are not familiar with this concept.  Inclusion of a so-called “public option” for health insurance in the bill currently pending in Congress threatens to derail health care reform in this session.  I must admit that I had trouble understanding the rancor in the public debate, so I consulted a healthcare economist and friend of mine, Jason Shafrin.  He explained it to me this way:

“If run properly and fairly priced, the public option can provide a superior choice for many consumers.  Those who don’t want a public option could still buy private insurance.  However, the public option likely will not be run like a private business. If the public option runs a deficit, it may use taxpayer money to make up the difference.  If so, there would not really be a competitive environment.  This would be similar to a market where 5 companies compete, but one has access to a government subsidy and free government loans.  This unfairly tilts the playing field.  Opponents of the public option fear that this will take place; the public option will get unfair support from the federal government.  Many opponents believe that in the short run, the public option may be a good idea, but in the long run, it may dominate the market, and become a Medicare-for-all program.

“Also, applying your analogy to government health insurance, the people who get the option (i.e., consumers) are basically the same people who give the option (i.e., the government, a.k.a. taxpayers).”

This was very helpful.  I also understand that options themselves are very much like insurance.  When you give (or sell) an option, you want to be fairly compensated for it.  When you get (or buy) an option, you expect to pay something, but you don’t want to overpay.  What is often lost in the health care debate is that we are trying to insure against continued exhorbitant increases in health care and insurance costs.  So the 64 thousand (or billion?) dollar question is, how much do we pay to get our public option health insurance?  Ideally, only those who opt in will pay.  There will be no subsidy, other than for those who otherwise would not be able to buy any health insurance, and that money could go to any insurer, not just the public one.  The whole point is to have health insurers who will compete with one another and keep premiums down, while negotiating with health care providers to keep costs down.

Now, the question is how do we keep overall health care costs down when the demand (from all those previously uninsured people) will presumably go up, while supply remains the same (at least in the short term).  That sounds like a presecription for rising prices to me.  In any event, I still do not think it is a good idea to reject or reduce our options.  Options are still a good thing, especially in the negotiation phase.