NEGOTIATION TACTICS Greg Thompson

General Comments 1. Treat this mediation like a trial or at the very least, like a very important hearing in other words, do your homework and be prepared. Send your response to the mediators request for specific information about your case you would be surprised how many people lose the opportunity of educating the mediator by not sending in their side of the story. a. b. 3. When you do send it in, send it in prior to the night before the mediation or the morning of the mediation. Include the relevant cases treat us like a judge highlight the cases for us.

2.

In the absence of a great reason, please prepare an opening that shows that you are on top of all of the issues in the case and you will be able to present your case to a jury very well. a. b. Do use power point and/or posters and/or handouts. Video presentations and video snippits put into power point works very well.

4.

Do send a demand in advance of the mediation. a. b. Plaintiffs must understand how insurance companies and defendants work. Very little on the spot decision making.

c.

Every layer of beaurocracy has to have paper to back up the recommendations they make.

5.

Do not hide that one great piece of information and wait to spring it on someone at the mediation. Again, my experience is that decision making can change at the margins at mediations but it is very hard to see an exponential change on the mediation date itself. Unless you have a history of resolving cases with this particular defendant, doing little to no discovery will not get a plaintiff fair to full value on a case. a. The threat that an attorney can get witnesses that will testify regarding exposure, the events at issue, damages, causation, etc., no longer works. At a minimum, this is the evidence that you should work for. 1. 2. 3. 4. 5. Videotape depositions. Oral depositions. Affidavits that are written in the language of the witness, not the language of the lawyer. Other written and/or documentary evidence. Witness Statements

6.

7.

Have a dialogue with the other lawyer prior to the mediation. Consider having coffee or lunch with them. Try to get a vague understanding of how they and their client view the case and whether you and they view the case somewhere in the same ballpark.

GENERAL PRINCIPLES OF NEGOTIATION GETTING TO YES NEGOTIATION AGREEMENT WITHOUT GIVING IN ROGER FISHER AND WILLIAM URY THE HARVARD NEGOTIATION PROJECT This is the seminal 1981 book on negotiation strategies. 1. Separate the people from the problem. a. Watch the personalities on both sides and relations among the lawyers. Watch the egos, help both sides understand how the other side may be thinking. Remember that differences are defined by the difference between your thinking and the other sides thinking. Put yourself in the other sides shoes. If you want to influence the, then you need to understand the power of their point of view. Give them a stake in the outcome by making sure they participate in the process. Thats why it is so important to have the ultimate decision makers present versus on the phone 1500 miles away. Understand face saving be careful about take it or leave it options regardless of how good they are. Allow people to let off steam and to vent.

b. c.

d. e. f. g.

2.

Focus on the interest, not positions. a. Both of you may want this lawsuit behind you I always say when you are looking backwards, its hard to be looking forward.

3.

Invent options for mutual gain. a. Think outside the box, is it really a zerosome game or is there some way to think of benefits to one party that cost less to another.

4.

Insist on using objective criteria. a. The more you bring standards of fairness efficiency or scientific merit on a particular problem, the more likely you are to produce a final package that is wise and fair. Look at previous case decisions by juries as well as trial judges of appellate courts. Know how they view a particular issue and know what damage amounts have been accepted and approved.

b.

Know your BATNA Best Alternative to a Negotiated Agreement. Know your WATNA Worst Alternative to a Negotiated Agreement. Run a Decision Tree with Expected Value Analysis. DIFFICULT NEGOTIATION TACTICS 1. Its not my job, let the mediator do it. a. b. Example: 1) I have $100,000.00 go settle the case, or 2) I want $100,000.00 go get it. Remember, Im not your lawyer. I also will not lie to the other side. I will tell them I cant disclose certain things, but as long as Im not sure what you really want or what you really have, Im free to speculate with the other side as to where I think we may be able to go. I think its very
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dangerous to let the mediator be your lawyer I wont do it. 2. Good cop/bad cop mediation. a. There are two people present, one of which looks like hes working toward a resolution whereas one of which looks like hes beating the war with drums.

3.

Give me your bottom line number or give me your best offer early. a. b. It rarely ever works and it creates huge problems down the road. When youve issued a Stowers demand for $100,000.00 and youve come to mediate the case, how do you start off with a demand greater than the Stowers demand? How do you have any room to move? Why are you mediating the case?

4.

Bracketology when negotiations are stalled, brackets are a great way to move in larger increments psychologically. a. For example, the plaintiff is stuck at $700,000.00 and the defendant is stuck at $150,000.00. Theyve both been moving in deltas of $10,000.00 and we are now at 3:00 in the afternoon. The plaintiff then sends a bracket that says they will accept $500,000.00 if the defendant offers $300,000.00.

5.

Mid-point analysis. a. Many times, people keep track of mid-point analysis throughout the negotiations as well as percentage moves up or down and absolute moves up or down. Remember, that they have little relevance during the early part of the mediation because the plaintiff controls how high he starts

and the defendant controls how low they start. This can have a super great impact on all of those numbers. For example, if the defendant starts at $5,000.00 and moves to $20,000.00, theyve increased their offer by 400%. If the plaintiff starts at $1.5 million and reduces it to $1 million, they can claim theyve reduced their demand by $500,000.00. 6. Deal or no-Deal Howie Mandell. a. Understand that this is a subject of risk tolerance. Example, theres $1 million left on the board along with $1.00. The banker offers $350,000.00.

Is it a fair deal? Is it a good deal? Deal or no deal. Why do 95% of the people take that deal that Warren Buffet or Bill Gates would turn down? Its because of the risk of going to zero and losing $350,000.00 is much worse off to them than the prospect of going from $350,000.00 to a million. In other words, the risk of a zero is much greater than the benefit of going to a million. 7. Last Best Chance for a Deal. When youre stalled, give me your best number confidentially. Plaintiff gives me their best possible number they would accept knowing that the defendant is not going to know about that number, the defendant gives me their best possible offer knowing that the plaintiff is not going to be given that offer and I make a determination about whether there is any possible match there. The drawback is that people are very reluctant to do that and many times cannot get levels of authority for that unless its actually real and would actually resolve the case. 8. The zeros game.

a.

My zeros game is that I ask each side how much they would take or pay. It asks each side at what level is their zero chance that they would take or pay a certain amount.

9.

Chinese water torture method of mediation a. Leak out a new piece of evidence during every negotiation session so that you eventually wear the other side down aka Chinese Water Torture.

Ive seen it used very effectively. 10. Mediator number. a. When negotiations are stalled, I may consider giving a mediator number. Understand, these are my rules: 1. 2. 3. 4. 5. 6. Its not the number that I believe is a fair number or a fair value for the claim. Its the number that I believe has the greatest possible chance to be accepted by both sides. I ask for both sides to get me a yes or a no and not a counter-offer. If they reject the mediator number, thats all I need to know. If they accept it, the other side will not know they accepted it unless both sides accept. There is no danger that Im going to let the other side know what youve done. In fact, I tell both sides that I will contact each side after the time period is over for them to respond, regardless of what the other side said. I will be calling you to ask for your response regardless if the other side said
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no or yes. I do this so that no one can wonder what the other side did by the fact that Im calling to ask for your response if you havent made it timely. Outside the Box When negotiations are still stalled and there appears to be no hope, consider things outside the box. a. b. Donate money to a charity in the name of someone see the recent oil refinery death case settlement. name a room or a hall somewhere in the name of someone i.e. the hospital names a room or hall in the name of someone. Teach a course regarding safety over certain aspects of things in the name of someone. Offer to buy the property at issue when there is a dispute over properties. Is there anything of value that the defendant has that is worth more to the plaintiff than it costs to the defendant. I.e. a Harley Davidson motorcycle that has a cost to the defendant of $14,000.00 but a benefit to the plaintiff of $28,000.00. Future business with the plaintiff or defendant.

c. d. e.

f.

Ultimately though, some cases just have to be tried and/or appealed. a. b. for political reasons or perhaps one or the other parties cannot compromise. for precedential reasons, one of the two parties cant give in or theres just an honest to goodness disagreement that cannot be brokered over the ultimate evaluation of the case.

DOCUMENTING THE SETTLEMENT CAUSE NO. __________ PLAINTIFF VS. DEFENDANT * * * IN THE DISTRICT COURT OF ________ COUNTY, TEXAS ___ JUDICIAL DISTRICT

MEDIATED SETTLEMENT AGREEMENT On ___________, 200_, a mediation proceeding was initiated with Greg Thompson, Mediator, and the following parties present: Plaintiff, _________, represented by attorney, __________; Defendant, ___________, represented by attorney, _____________; At the conclusion of the mediation proceedings, the parties announced that they have reached a settlement as follows: 1. $___________ in total consideration payable to plaintiff and their attorneys by Defendant, ______________, represented by attorney _______________ within ____ days of todays date. All sides to bear their own costs. A full and final Release and indemnity agreement to be agreed upon by all parties.

2. 3.

____________________________ Attorney for Plaintiff,

_____________________ Plaintiff

____________________________ Attorney for Defendant,

Disclaimer: This Mediated Settlement Agreement form was prepared by the Mediator at the request of the Plaintiff, Defendant, and their respective counsel (the Parties) and is intended to represent an agreement within the meaning of Rule 11 of the TRCP. By their signatures above, the Parties acknowledge that Mediator is (1) not engaged in the practice of law; (2) not a party to the litigation or the settlement; and (3) not responsible for the Parties fulfillment of the terms and obligations of the settlement. The Parties are responsible for the entire wording of the agreement.

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Afternoon Checklist: 1. 2. 3. 4. 5. 6. The money is to be paid by whom to whom. a. Get tax i.d. number When is the money to be paid by? Taxable court costs what are they and whos going to bear them, if anyone. Are there any interventions, hospital liens, or other items like that who will bear them if there are any? Are there any mortgages on the property how will this affect the resolution? Are there any other potential claims out there are there any requests for indemnity? a. 7. 8. 9. 10. If so, most lawyers will never agree to indemnify anything and most clients will never agree to defend and indemnity only indemnify.

Confidentiality agreement is it draconian does it have a liquidated damage clause or is it common? Request that plaintiff not re-apply for work request that defendant that defendant give a neutral reference. Non disparagement clauses. Make sure to bring up any of the non-monetary issues prior to the end of the mediation or prior to coming to an agreement on the monetary ones.

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