Litigation is costly and time-consuming, leaving the outcome of the case entirely in the hands of a judge or jury. Fortunately, litigation can often be avoided when negotiations occur – particularly when done strategically as a method of alternative dispute resolution (ADR). Even if unsuccessful, negotiations can often help develop your arguments, so that if the matter does go to trial, you have stronger arguments to support your position.
At Venditti Law, our legal team is skilled at negotiation designed to settle disputes. We encourage negotiation before litigation because it is the one way our clients can maintain maximum control over the outcome. If you are engaged in a legal dispute that could become litigious, contact us at 480-771-3986 today to schedule a Consultation and to learn more about ways to resolve legal disputes without litigation.
Negotiation as Alternative Dispute Resolution (ADR) in Arizona
Negotiation is an ADR method where the parties discuss the issues with each other to try and agree on a resolution. Unlike mediation or arbitration, there is no neutral third-party involved. Instead, the parties communicate directly with each other or via their lawyers.
Negotiation is often the starting point for ADR. Parties have total control over the negotiations including how they are conducted and what the terms of the settlement are if a settlement is reached.
Ideal Situations for Successful Negotiation
It can be ideal for situations where the parties are on speaking terms and are open to resolving the matter amicably. In negotiation, the parties must be willing to compromise. They need to be able to communicate effectively with each other and understand each other's position.
Less Ideal Situations for Negotiation
Negotiation may not work where there is a large power imbalance between the parties. As an informal process, it does not offer any legal protections to ensure fairness for the weaker party.
Also, complex disputes or disputes involving many parties may need a neutral third-party to moderate the discussion and therefore be better suited to mediation or arbitration.
Stages of Negotiation in Arizona
Like all ADR methods, negotiation is a process that involves several general stages.
- Preparation. The parties identify their goals, including their respective best and worst-case scenarios. Goal-setting creates a framework that helps guide the parties either toward an agreement on a settlement or an understanding that at least one party is not yet ready to settle.
- Procedure agreement. At the outset, parties should decide on certain procedural aspects such as where and when the negotiations will happen, how long they will last, and how parties will communicate. Parties can choose how to conduct their negotiation, but agreeing to some general guidelines assists their discussions.
- Proposal and counterproposal. During negotiations, the parties put forward their positions and clarify any misunderstandings. This allows the parties to start negotiating with a proper understanding of the issues and each other's interests.
- Bargaining and compromise. Once positions are understood, the parties can begin to bargain with each other to hopefully reach a mutually acceptable outcome. Depending on the nature of the relationship or dispute, the parties may take a cooperative or more combative approach to negotiations.
- Conclusion. If the parties reach an agreement, they set out the details in a written settlement agreement and sign it. As your legal representative, we will make sure any agreement is legally sound and favorable to your position.
Legal Ethics and Negotiations in Arizona
Lawyers who represent parties in informal negotiations are still bound by professional rules of ethics.
This includes a duty to represent their client competently. A lawyer must avoid any conflicts of interest. A lawyer may be able to represent multiple parties in a negotiation if there are no conflicts of interest, and the parties give their informed consent. However, conflicts often arise, especially when it comes to finalizing a settlement, so representing multiple parties is not ideal regardless of the safeguards put in place.
Lawyers must also be truthful and not knowingly misrepresent facts or mislead the other party during the negotiations.
Pros and Cons of Negotiation as an ADR Method in Arizona
Again, like any other ADR method, there are advantages and disadvantages to negotiation. Keep in mind that negotiation is most often the initial step of any legal dispute, so if it does not work out initially, there is always hope that either another ADR method may work, like mediation, or that negotiations later in the process may eventually produce a settlement before the case goes to trial. Even then, parties can still continue negotiations while the trial ensues.
Benefits of Negotiation
- It is one of the simplest and most affordable types of ADR. Unlike mediation or arbitration, there is no cost to engage a third-party.
- When successful, negotiation can be a quick and informal way to resolve a dispute. It can also help preserve, or even improve, the relationship between the parties.
- Negotiations are private. Discussions and outcomes are kept confidential, unlike in a trial where they become part of the public record.
- Parties have full control over negotiations. With a high degree of flexibility over the process and its outcomes, the parties have ample space to find a resolution on which they can both agree.
- Even if a settlement is not reached, negotiation can be a useful tool for focusing on issues and encouraging parties to take a more collaborative approach.
- Negotiations are conducted without prejudice, allowing the parties to engage in open discussion. If unsuccessful, the parties can still pursue other options, including litigation.
Potential Disadvantages of Negotiation
- Negotiation requires the parties' agreement. Parties cannot be forced to negotiate; they must do so voluntarily. It also requires good faith on behalf of the parties – otherwise, it's unlikely to work.
- An outcome is not guaranteed. If negotiations fail to resolve a matter, it must proceed to another type of ADR or to trial.
- Negotiation does not create legal precedents.
- Legal protections are limited. When a power imbalance exists between the parties, the party with less bargaining power will have little protection.
Contact an ADR Attorney in Phoenix Today
At Venditti Law, we aim to obtain the best outcome for our clients in the most efficient manner possible. Negotiation is one tool to this end. Contact us today to schedule a Consultation and to find out whether your legal dispute can be resolved through solid negotiations.