Best Practices for Successful Negotiations – Part 1
From our perspective as a provider of litigation management software, we know the critical importance of early case resolution. Our customers know, and can support with excellent data that the longer a litigated claim remains open, the greater the expense and (most often) the greater the indemnity cost.
We know from industry statistics that only two to four percent of all claim files don’t settle before trial. That is a tiny percentage of all the litigated files any average claims handler is managing, so it is likely that almost every file on your desk will settle.
How then, can claims professionals resolve their litigated claims earlier without giving away the store? After all, almost any claim file can be closed by overpaying for it. That is certainly not the goal of early file resolution.
The answers to this question can be summarized, at a very high-level, into three additional sets of questions:
- First, it is imperative to understand the true problem. That is, what is driving the litigation? What does the claimant really want? Is it just money? Is it something else?
- Second, how can you advance and share your theory of the case and its value in a more compelling way? In other words, how can you paint a narrative, or tell a story, that actually persuades opposing parties to see your point of view and to become less entrenched their stance?
- Lastly, how can you take advantage of the actual psychology behind negotiation? If the goal is to help both parties come to a resolution, what can you do to not make things worse, and in fact make them better?
Uncovering true needs
The challenge of uncovering the true needs of plaintiffs is a difficult one. Often this is true because both parties are represented, and plaintiff’s counsel is often reluctant to allow direct contact with their client.
In the medical malpractice realm, for example, it is not common for plaintiffs to acknowledge that one of the things they are seeking is an admission that the doctor was wrong, or more directly, an outright apology. Yet plaintiff’s counsel is frequently reluctant to allow those requests to come into the negotiation, and they may insist that the negotiation is about nothing other than financial compensation. There is no contingency payment from an apology, and yet all parties know that, for the plaintiff, it may not be just about the money.
In such cases mediations can be very successful in teasing out the emotional, non-financial, needs of the parties. These are questions that mediators, as neutrals, can ask in order to find, nurture, and promote common ground.
Creating a compelling story
Critical to resolving disputes quickly is the ability to engage in true dialogue with the opposing party. For claims professionals this often means pushing for a dialogue with plaintiff’s counsel early and often.
At the same time, each interaction between the two sides is an opportunity. In situations where there is disputed liability or questionable damages (most files), it is important to shape and explain the defense perspective, and to do so in a compelling way that creates some doubt with opposing counsel.
The questions you have about the case and its value should be outlined early and explained well. It requires clear analysis and strong preparation. To paraphrase another common saying, you can be 100 percent ready for trial, but only 30 percent ready for negotiation.
The role of these conversations is not to draw lines in the sand. It is to create doubt (but not in a way they perceive as a threat). You are not looking for an acceptance of your arguments, but you want the opposing parties to think about them after the conversation. You are setting an “anchor” around which to set expectations and have more discussions.
Join us next for part 2 of Best Practices for Successful Negotiations. We’ll discuss the actual psychology behind negotiation and how CaseGlide’s customers use our unified platform to keep track of ongoing negotiations and optimize settlement timing to improve outcomes.
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