I recommend this book, by a former FBI kidnap and ransom negotiator, as a fascinating read . There are plenty of tips which apply equally to civil litigators as to uncivil ones (terrorists and criminals). The consequences of not settling are different, especially for the kidnap victim, but fundamentally both types are just looking for a deal. However the piece of advice that really doesn’t work for civil litigators is the central tenet from which the book gets its name! In legal disputes you should split the difference! In this piece I explain why.
Mediations normally start like a kidnap. The Claimants’ demand is exorbitant, the Defendants refuse to pay anything. Gradually the parties shift towards more realistic positions. When they have both ostensibly or actually reached their ‘final positions’, one or both will assert that they are not prepared to ‘split the difference’.
Viewed through the lens of SettleIndex, the Claimants and Defendants have each started from their best possible Outcome. Negotiations proper begin when the parties start to shift to the implicit recognition that other Outcomes would be possible if the dispute were left to be decided by a Tribunal. Eventually they reach their Award Positions; the most/least they are prepared to pay or take to settle the claim; based on how they assess the chances of Awards across the whole range – from triumph to disaster.
At this point there is still a divide between the parties, based simply on the fact that they do not agree about the merits of the claim. Never underestimate how much client bias affects legal representatives. In a case I mediated recently the Claimant’s solicitors in private session put their clients chances of success at 60%. In the other room the Defendants’ lawyers assessed the exact same chance at 20%. The dispute was over the correct construction of a contract, which is the least fact dependent form of dispute.
In theory the case was unsettleable, unless the parties were to split the difference, which they eventually did. Had the parties modelled their dispute in SettleIndex (which privately I had done), it would have generated a Settlement Positions Report looking like the one below.:
This shows how the Parties’ Positions change as they spend costs. The Model Settlement Value, where the lines intersect, always creates a compromise between the parties’ assessed Award Positions, which are at the extreme right hand edge of their lines. If the parties’ case budgets are equal, then the difference is precisely split. If not, the compromise slightly favours the party with the smaller budget.
Parties that have the intuition to split the difference are not indulging in a ‘cop out’. They are doing precisely what the science dictates!
