Journeying to settlement

The art of negotiation is one that every entrepreneur should work to perfect, especially if they're trying to organise trade deals that cross borders. Lawyer and entrepreneur Stephanie Chow has already given us advice on how mediation can transform your business, now she explains the steps businesses need to take to reach a settlement after negotiation… 

Even in a simple two party dispute, in which the sole material term is dollars, hammering out a settlement can be a challenge. Toss in multiple active parties, multiple jurisdictions, complex legal and factual issues, diverse nationalities and cultures and the journey reaches heroic proportions.

Fortunately, there are a few guideposts along the way.

Step one: Consider hiring a neutral

Sure, you could get there on your own.  But while you have been busy litigating or growing a business over the past few years, there are mediators who have hiked this terrain many times. Take advantage of the experience of a mediator who has walked through hundreds, or thousands of resolutions of complex cases. It is not just a question of experience, but of access to a different dynamic than is available to even the most experienced litigator.

Adversarial systems of civil adjudication are inherently and potently reactive. They are designed to thresh out factual and legal issues for resolution by a third party at trial. They are not designed to facilitate negotiated resolution of disputes.

To meaningfully address the manifold issues in any action, there has to be a switch from dialectic to dialogue. Yet it is equally essential that advocacy be maintained throughout the negotiation process, both to refine understanding of issues and risks in assessing settlement options, and to maintain litigation postures in the event that negotiations fail.


Step two: Engage in a joint session

While negotiation posturing may impede direct efforts by a party to convene such a session there will usually be less resistance to initiation by a neutral.

The agenda for this initial session should not include discussion of monetary terms — on which positions at the outset of negotiations are likely to be so far apart as to drive impasse. The focus should be on such fundamentals as the feasible scope of settlement, the confirmation protocols of the jurisdictions implicated, and which parties will need to be at the negotiating table to achieve a meaningful resolution.

If consensus cannot be reached on these foundational terms there will never be adequate support for any settlement structure. Conversely, once such a foundation is laid, structuring a

negotiation process for a global settlement can be relatively straightforward.

On the day of the mediation the predicate for rational discourse – clear communication of how each party views their position is established at the outset through a joint session. Although positions may have been articulated ad nauseam in the course of litigation the impact of reactivity is profound and little real communication occurs.

In recognition of this, the mediator summarises each position statement, usually in a small fraction of the presentation time, and without spins, recharacterisations, or material omissions.

This accomplishes two things. First, the party who made the presentation is reassured that they have been heard and understood, and that the mediator took the time to read and assimilate their brief sufficiently to have tracked their presentation. Second, the opposing side – having been mentally counter-punching throughout the presentation, and thus taking little of it in – is usually listening intently to gauge what the mediator has taken away from the presentation. Ironically, even in heavily litigated cases, this is often the first time the decision makers have truly heard – rebounded off the mediator – the basis for their opponent’s position.


Step three: Caucusing

Critical evaluation of issues and options is essential. It is asking the impossible of parties to take in critical feedback with an open mind if it is being delivered in front of their opponents. Yet, there may be information which should be made known to the mediator that could alter risk analysis, or inform or constrain settlement options that parties would prefer not to disclose to opponents. Finally, caucusing permits frank discussion of options without fear of compromising negotiating positions.

By the conclusion of a few rounds of caucusing the mediator should be in a position to advance a proposal for settlement, confident that it at least tracks the course of dialogue that has occurred between the mediator and each party. And this is the critical and simple difference: rather than striving to force or cajole touching fingers across the table, the process allows each party to safely evaluate risks and options in a secure and non-reactive dialogue with a third party. When each party has touched fingertips with the mediator they have effectively touched fingertips with each other.

Can it possibly be that simple? Thousands of successful mediations over the course of decades answers that question. The answer should be no surprise to anyone who has ever tried forcing opposing poles of powerful magnets together. Lots of energy can be expended with only the illusion of progress, while in reality resistance is steadily increasing. Redirect those poles toward a neutral point and it becomes a challenge to keep them apart.

Position bargaining or "shuttle diplomacy" cannot have this effect. It is the conveying of positions between opposing parties that itself inexorably elicits reaction, regardless who conveys them.

The theory of how to manage conflict by redirecting dialectic into dialogue has been field tested and proven by mediators around the world. We now know that we have the ability to respond to conflicts more effectively. The only question is whether we will accept the responsibility to do so.

This is a guest blog and may not represent the views of Please see for more details. Thumbnail from gettyimages.


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