What should you determine before arranging a negotiation meeting?
You should be clear about the meetings purpose.￼
There are particular aspects that need to be planned before arranging a negotiation meeting.￼ List these aspects and the acronym used to remember them?
- identifying WHO should attend
- setting the AGENDA ￼
- selecting the MEETING place
- SEATING arrangements
- what to TAKE
- setting a LIMITS and goals￼
- WAMSTL(like the beer)
Generally, a meeting called to negotiate a settlement will have what purposes?￼
- to find the best settlement solution
- to get the key stakeholders to agree with this solution￼
Who should you arrange to attend a negotiation meeting, and why?￼
First you should determine the precise issue or issues that are the subject of the meeting, in turn this will allow you to determine who the key stakeholders are, where agreement needs to be reached. It is best to limit those attending to the people who can helpfully contribute something to the outcome.￼
What is a very helpful tool that can assist you to control a meeting?
A set agenda.￼
Fisher & Ury (1981) developed a method of negotiation. What was this method called?￼
- principled negotiation
- negotiation on the merits￼
Fisher & Ury (1981) developed a method of negotiation which simplifies the negotiation process down to 4x basic points. What are these 4x points and what word play can be used to remember them?￼￼
– Separate the people from the problem
- focus on interests, not positions
- invent options for mutual gain
- insist on using objective criteria￼
Ohhhhh PEOPLE are only INTERESTED in INVENTING OBJECTS!!
Discuss step 1 of Fisher & Ury (1981)’s method of negotiation- Separate the people from the problem?￼￼
It is easier to achieve an outcome if the participants come to see themselves as working side-by-side, attacking the problem rather than attacking each other. A working relationship where trust, understanding, respect and friendship are built up over time can make each new negotiation smoother and more efficient.￼
Discuss step 2 of Fisher & Ury (1981)’s method of negotiation- Focus on interests, not positions?￼
Behind opposing positions lies shared and compatible interests, as well as conflicting ones. The task is to identify these interests and to look for creative solutions to meet them.￼
Discuss step 3 of Fisher & Ury (1981)’s method of negotiation- Invent options for mutual gain?￼
Skill at inventing options is one of the most useful assets a negotiator can have, skilful negotiators will try to broaden the options that are available. It is also important to separate the act of developing options from the act of deciding on them.￼￼ Discussing options differs radically from taking positions. Positions are inevitably in conflict where as options invite other options.￼
Discuss step 4 of Fisher & Ury (1981)’s method of negotiation- Insist on using objective criteria?￼
The idea is to commit yourself to reaching a solution based on principle, not pressure; concentrating on the merits of the problem, not the metal of the parties; being open to reason but closed to threats. This means that part of the negotiation will involve reaching an agreement on the approach that is to be adopted. If you can reach agreement on these sorts of issues, you will have objective criteria on which to base your settlement discussions.￼
Explain the difference between a closed question and an open question?￼
A closed question is one that can be answered by one word or phrase, and will generally end a conversation. Open questions on the other hand invite the other person or people to talk as they cannot be answered with one word or phrase.￼￼
What will be the likely outcome if little time has been spent on the negotiation process?
If the negotiation process has been rushed, then people will feel that they have not been a part of the process and it can be difficult to reach a resolution. Thus, an offer that is not sufficiently informed will probably be wrong and lack credibility.￼￼￼
When is the right time to make a settlement offer?￼
When sufficient information has been obtained and the settlement options have been explored, the time will be right to make an offer. ￼
What are 2x things that need to be checked before making a settlement offer?￼
- What are your limits?
- What are your goals?￼
Explain the settlement zone theory?￼
There is a zone where part of your negotiating space overlaps with part of the other parties negotiating space, this is called the settlement zone and a settlement is likely to be achieved.￼
Which party is a settlement likely to favour?￼￼
The settlement will tend to favour the party that is perceived to be under the least pressure to settle the matter quickly, or is perceived to have less motivation to do so.￼
What option should you choose to use if negotiations are getting heated to the point where progress is heading in the wrong direction?￼
￼ The ‘pause button’.￼
￼Describe what using the pause button could look like?
It might –
￼- be momentarily
- involve a short break
- involve an extended suspension of a negotiation￼￼￼
It is also good to press the ‘pause button’, at least momentarily, before you’re about to settle the claim. What checks should you carry out before providing a settlement offer?￼
- Is this offer sufficiently close to my goals?
- Do I have authority to settle on this basis?
- Have I acted in good faith or is there something that should be disclosed?
- Is this outcome appropriate for both parties?
- Is there some further concession or benefit that can be secured at little cost before settlement is finalised?￼￼
What is a deadlock?￼
Deadlock happens when the negotiation process hits a ‘roadblock’.￼
What are the 2x options that can be used when a deadlock is reached?￼
- removing the roadblock
- getting around the roadblock￼
Discuss how you can ‘remove the roadblock’?￼
In order to remove the roadblock you must determine precisely what the real blockage/issue is. Once the real issue is identified, progress on a solution can proceed.￼
How do you get around a ‘roadblock’?￼
If a roadblock cannot be removed, a technique that you can use is called ‘linkage’. This involves finding a way to give the party what they want by finding a compensating concession that can be secured. Linkage is a powerful tool that enables you to break a deadlock. It does that by enabling both parties to have ‘wins‘ that are important to them without making a material change to the ultimate cost.￼
Discuss the option of ‘splitting the difference‘?￼
A common suggestion to get past a roadblock is to ‘split the difference‘. However you need to be careful when using this approach – sometimes it is appropriate and sometimes it is not.￼
When would it be reasonable to consider ‘splitting the difference‘?￼
- the gap has been narrowed to a tolerable range
- there are time constraints
- the atmosphere of negotiations does not encourage further protracted formal discussion
- it will not result in an outrageous injustice to either party￼
What issues can arise when negotiations are interrupted, and what can be done to prevent future issues arising?￼￼￼￼
If negotiations are interrupted, or if negotiators are interchanged, then any agreements made on initial settlements (which may include later concessions) can be forgotten or confused. As such￼￼￼ it is best to ensure that each milestone agreement stands on its own merits, in order to ensure that there is no confusion during the negotiation of future agreements.￼
What should be done when specific milestone agreements are reached?￼
These agreements should be clearly documented by the following examples-
- in some situations the minutes of the meeting will suffice
- letters can be exchanged between the parties
- it may also be appropriate to have solicitors draw up a legally binding documents￼￼
What should you do when negotiations fail?
There will be some situations where you’ll be confronted with a non-negotiable barrier and the normal negotiation process will fail. In this situation you can consider ‘closing but not locking the gate‘.￼￼
What should you do before you consider the ‘closing but not locking the gate’ option?￼
- you should carefully review your goals and limits to ensure they are realistic and based on objective criteria
- ￼ consider how your case will stand up if it is subjected to an independent review, particularly one that might require a rigourous and unsympathetic examination in an unfriendly forum￼￼
If you choose to proceed with the ‘closing but not locking the gate‘ option, what is your next step?￼
If considered reflection and discussion with the principal confirms that it is necessary to walk away from the negotiations, then you should do so in a way that clearly communicates your reasons for doing so. The way you terminate the negotiation can still influence the course of the ultimate settlement.￼￼
When writing to the other party to terminate the negotiation, what information should your letter include?￼
- summarise the other parties position- if there has been a misunderstanding, this will allow them to clarify the issue and may enable the negotiations to resume
- summarise your own position– state your own position very clearly
- show respect
- advise/invite the next move- in most cases you will suggest some options for the other party in order to proceed progress in negotiations in the future￼￼
What options are there for dispute resolution?￼
- legal action- legal action is a common and traditional way of dealing with claims that cannot be settled by negotiation
- alternative dispute resolution- Arbitrators’ and Mediators’ Institute of New Zealand (AMINZ)
- the Insurance Council of New Zealand
- the Insurance and Savings Ombudsman￼￼
Mediation is a form of negotiation which takes place in a structured environment with the expert assistance of a skilled mediator. The mediator is an independent person who will have the confidence of both parties to the dispute. Unlike other forms of ADR, the mediation process cannot impose a decision upon the parties.￼
Conciliation is a lot like mediation; however, in this process the conciliator plays a more active role in the discussion and dispenses advice more freely than a mediator.￼ A conciliator may-
- advise on or determine the process of the conciliation
- make suggestions about the terms of settlement
- give expert advice on likely settlement outcomes
- actively encourage the participants to reach an agreement￼
Discuss assisted mediation?
This is a development of conciliation. In this process, the conciliator is a judge or accepted legal authority who can assist in the process with the persuasive force of their own standing.
Arbitration is a more formal process that is governed by different statutes. In this process, the parties refer the dispute to an independent third person for determination.￼ The results of arbitration, known as the award, is binding on the parties. This means that the outcome is not the product of a volunteer negotiation as is the case with mediation.￼
Discuss expert determination?
This is a flexible ADR involving the use of an independent third party- the expert. The parties agree beforehand to be bound by the decisions of this expert. It is often the quickest and most effective way of resolving disputes that are relatively simple in content or essentially technical in nature.￼
Discuss early neutral evaluation?￼
This is a form of mini-trial that can be heard in front of a judge or senior barrister. Each side is required to make a presentation for approximately 30 minutes in front of the judge. The judge is then required to express an opinion regarding how the matter might proceed if it were to develop into litigation. The judge is also empowered to make non-binding judgements for both parties to consider.￼
What are some of the various codes of practice and legislation that can impact the way a loss adjuster negotiates settlements?￼
- general ethics
- codes- ANZIIF, AICLA, New Zealand Fair Insurance Code￼
- laws- common-law, contract law, statute law￼
Discuss common law?￼
Common law is a system of law based primarily on the decision-making of judges, supplemented by laws made in parliament.￼
Discuss statute law?￼
This is the law made by Parliament (or delegated authorities). It overrides common law if they are in conflict.￼
Discuss contract law?￼
This is a specific legal area that, among other things, regulates dealings between manufacturers and suppliers, employers and employees, property owners and tenants and insurance companies and consumers. It also involves interpretation of specific agreements made between these parties.￼