Winning the Zero Sum Game
Many negotiators approach resolution as a zero sum game. Each side’s gain or loss is exactly equal to the other party’s gain or loss. Viewing the resources available as limited can obstruct getting to settlement.
Particularly when one or more parties have hit their dollar authority limit, adding non-monetary benefits to the discussion creates a larger number of benefits to divide. Some people call this “enlarging the pie.”
When there are more issues to discuss, parties can “log roll,” i.e., swap benefits across a number of issues, not just fixate on more or fewer dollars.
Different kinds of cases call for different solutions. Unique facts can inspire creativity. Here are some tried-and-true ways to add value.
In workers compensation and wrongful termination cases, a resignation can add value. It clarifies the parties’ status and provides finality. Double-check to make sure you do not run afoul of statutory restrictions before raising this issue.
In the right case, an apology can move negotiation forward.
Some claimants feel no one is listening. Perceived disrespect leads to resentment which prevents reasonable negotiation. All participants should make sure to show respect for the opponent’s position. One way to do this is by scheduling a mediation where everyone gets a chance to have their say.
In appropriate cases, you may be able to negotiate to characterize money as non-taxable. If some or all of the settlement can be considered payment for a physical injury or restitution for a loss such as property damage, the net benefit to the payee is greater.
Settlements usually call for a single lump-sum payment. But a different arrangement may be better for all parties. A classic way to do this is through a structured settlement. A structured settlement can provide more money for a claimant without increasing the cost to the payor. Other benefits might include Medicare Set-Aside compliance and professional investment management.
Sometimes, a defendant requests a payment plan. Even the largest defendant may need to spread a settlement over two budget years. When parties agree to a payment plan, a properly worded settlement agreement must spell out each party’s rights, obligations, and remedies.
Protection against damage to reputation can be a valuable bargaining chip whether the party is an individual, a corporation, or a government entity. Confidentiality clauses have appeared routinely in personal injury settlement agreements for decades. Defendants and their insurers don’t want to set a benchmark for future plaintiffs. Note: some jurisdictions have prohibited non-disclosure clauses in sexual harassment settlements.
Victorious negotiators are those who walk away with a settlement. To get there, discard the zero sum approach. Find ways to add value instead