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![]() Dispute Resolution GuideJune 1995 Previous | Table of Contents | Next
NegotiationDispute Resolution Series Practice Module 1 Produced by Dispute Resolution Services Department of Justice, Canada I. What is Negotiation?Negotiation has been defined as any form of direct or indirect communication whereby parties who have opposing interests discuss the form of any joint action which they might take to manage and ultimately resolve the dispute between them. [1] Negotiations may be used to resolve an already-existing problem or to lay the groundwork for a future relationship between two or more parties. Negotiation has also been characterized as the "preeminent mode of dispute resolution", [2] which is hardly surprising given its presence in virtually all aspects of everyday life, whether at the individual, institutional, national or global levels. Each negotiation is unique, differing from one another in terms of subject matter, the number of participants and the process used. Given the presence of negotiation in daily life, it is not surprising to find that negotiation can also be applied within the context of other dispute resolution processes, such as mediation and litigation settlement conferences. II. Characteristics of a NegotiationNegotiation is: Voluntary: No party is forced to participate in a negotiation. The parties are free to accept or reject the outcome of negotiations and can withdraw at any point during the process. Parties may participate directly in the negotiations or they may choose to be represented by someone else, such as a family member, friend, a lawyer or other professional. Bilateral/Multilateral Negotiations can involve two, three or dozens of parties. They can range from two individuals seeking to agree on the sale of a house to negotiations involving diplomats from dozens of States (e.g., GATT). Non-adjudicative: Negotiation involves only the parties. The outcome of a negotiation is reached by the parties together without recourse to a third-party neutral. Informal: There are no prescribed rules in negotiation. The parties are free to adopt whatever rules they choose, if any. Generally they will agree on issues such as the subject matter, timing and location of negotiations. Further matters such as confidentiality, the number of negotiating sessions the parties commit to, and which documents may be used, can also be addressed. Confidential: The parties have the option of negotiating publicly or privately. In the government context, negotiations would be subject to the criteria governing disclosure as specified in the Access to Information Act and the Privacy Act (please see page 15 "Statutory/Policy Considerations" for a more detailed discussion of these Acts). For general information on the privileged nature of communications between solicitor and client during the course of negotiations, please refer to the Department of Justice Civil Litigation Deskbook, 3rd edition. Flexible: The scope of a negotiation depends on the choice of the parties. The parties can determine not only the topic or the topics that will be the subject of the negotiations, but also whether they will adopt a positional-based bargaining approach or an interest-based approach. III. Advantages of Negotiation
IV. Disadvantages of Negotiation
V. How to use NegotiationA. Objective of a Negotiation Negotiations allow the parties to agree to an outcome which is mutually satisfactory. The actual terms of the agreement must be concluded by the parties and can be as broad or as specific as the parties desire. A negotiated settlement can be recorded in the form of an agreement. Once signed, has the force of a contract between the parties. If the settlement is negotiated in the context of a litigious dispute, then the parties may wish to register the settlement with the court in conformity with the applicable rules of practice. B. Negotiating Styles Generally speaking, although the labels may vary from one commentator to the next, negotiating styles can be divided into two categories:
(i) Competitive/Positional-Based Negotiation In the competitive model, the parties try to maximize their returns at the expense of one another, will use a variety of methods to do so and view the interests of the opposing party or parties as not being relevant, except insofar as they advance one's own goal of maximizing returns.[4] Competitive bargaining has been criticized for its focus on specific positions rather than attempting to discern the true interests of the parties. [5] Among the criticisms which have been levelled at the competitive model are its tendency to promote brinkmanship and to discourage the mutual trust which is necessary for joint gain. [6] (ii) Cooperative/Interest-Based Negotiation Cooperative or problem-solving negotiation starts from the premise that the negotiations need not be seen as a "zero-sum" situation, i.e., the gains of one party in the negotiation are not necessarily at the expense of the other party. [7] Common interests and values are stressed, as is the use of an objective approach, and the goal of the negotiations is a solution that is fair and mutually agreeable. [8] In recent years, the form of cooperative negotiating style known as principled bargaining has won widespread acceptance. [9] The proponents of principled bargaining believe that bargaining over fixed positions can lead to situations where parties will either be stubborn ("hard bargaining") or accept unilateral losses ("soft bargaining") in order to reach agreement. [10] Principled bargaining, which attempts to reconcile the interests underlying these positions, helps the parties to reach agreement and circumvent the problems of hard and soft bargaining. It is this form of negotiation which is seeing increasing use. See Part G "Steps of a Negotiation" for further discussion. C. What is the Role of Justice Counsel in a Negotiation? Simply put, a negotiator is supposed to advance the interests of the party that he or she represents in order to obtain an optimal outcome. Beyond this general statement, the functions to be performed by a negotiator will vary, depending on the mandate conferred on her or him by the party. In the most elementary form of negotiation, two or more parties work to achieve an agreement between themselves. However, the parties can delegate representatives to act on their behalf. These representatives include the following:
The role of Justice counsel in a negotiation will vary with the circumstances and the mandate of the negotiating team. The extent to which Justice counsel will participate in the negotiations will depend on a variety of factors, including whether or not legal issues or issues of mixed fact and law are at stake as well as whether the client department needs or simply wants Justice counsel to participate actively in the negotiation. For example, counsel with Legal Services Units work with their clients and on their behalf and help represent their views in a variety of situations, e.g., formulating contractual terms concerning the development of a project. In some cases, Justice counsel will have carriage of files such as ongoing litigation and may be directly involved in negotiations, e.g., settlement conferences in litigation files. When negotiating on behalf of the client, counsel must ensure that there is no divergence between his or her negotiating stance and the mandate of the client. This is best done through following the client's instructions and providing frequent updates to the client. At other times, client departments may ask the Justice counsel to participate as a member of the negotiating team. Should the client be present at the negotiations, counsel must determine in advance whether the client will actually participate in the negotiations. It is crucial for the success of the negotiations that no divergences, real or apparent, emerge between the positions advanced by Justice counsel and those proposed by the client. To avoid any such disclosures, counsel and the client should clarify their respective mandates and formulate a common negotiating strategy. The choice of negotiating style will also be an important consideration, as a competitive negotiator will view the bargaining exclusively in terms of advancing his or her interests and will conduct the negotiations accordingly. The cooperative negotiator, however, will view the issues in a fundamentally different light and will attempt to seek common ground with his or her counterpart. While the role of counsel will depend on the circumstances surrounding the negotiations, she or he is always bound by the principles of professional ethics. For example, the Code of Professional Conduct of the Canadian Bar Association states that when acting as an advocate, the lawyer must treat the tribunal with courtesy and respect and must represent the client resolutely, honourably and within the limits of the law. [11] Although no two negotiations are identical, counsel must apply these principles of professional responsibility in each situation. [12] Counsel for the Department of Justice are bound as well by the provisions of the Department of Justice Act, R.S.C. 1985, c. J-2, as am., and relevant directives and policies which outline the appropriate role for Justice counsel. Of note is the Treasury Board Manual, which specifies negotiations as one means of resolving contractual disputes. Section 12.8.3 reads: Efforts should be made to resolve disputes as they arise, first by negotiating with the contractor. This can be through discussion between representatives of the contractor and the contracting authority or by a more formal review established by the department or agency. Contracting authorities should develop systems that ensure:
Other potential sources of information that may be of use are the various Treasury Board policies and directives which recognize the role of negotiation. [14] Counsel should also be aware of all other legislative and government policy requirements including, for example, the Access to Information Act, the Privacy Act and the Official Languages Act (a more detailed discussion of these provisions can be found in "Statutory and Policy Considerations" at pages 15). D. Dealing With Differences Underlying any successful relationship is the principle of mutual respect. This is particularly true during negotiations, where cultural and/or linguistic differences between the parties may occasionally result in misunderstandings between them. Such differences will influence the perceptions and assumptions of individuals and how they bargain. [15] Differences in gender may also play a role in the negotiating process, whether the parties are of the same or different cultural backgrounds. [16] Reliance on stereotypes, whether they be based on gender, cultural, physical or racial differences or physical disability, will cause and reinforce misunderstandings between the parties. The ability to deal with others who are not of the same gender or cultural origin or who differ in some way from one's self varies with each individual and the degree to which she or he has been exposed to and is willing to accept diversity. Whatever one's background, clearly demonstrating respect for and an open-minded attitude towards others is always an appropriate course of action. When there are cultural or other differences among parties to a negotiation, it is important to be aware of and sensitive to these differences. In such a situation, it is essential to communicate clearly and effectively with the other party or parties in a negotiation. Doing so will enhance the relationship between the parties as well as minimize the chances of a misinterpretation of the underlying message. [17] E. Dealing With Difficult or Deceptive Conduct At any point during negotiations, one party may decide to use a variety of tactics in order to obtain an advantage over another party. This behaviour can range from pressure tactics (attempting to force a party to accept specific terms), intimidation (implicit or explicit), deliberate ambiguity regarding the scope of the negotiating mandate to blatantly unethical behaviour (providing misleading or false information, lies, etc.). [18] Advance preparation is essential in order to respond effectively to these tactics, whenever they may arise. In devising strategies to counter such behaviour, each situation must be viewed as unique. Previous experience of others can provide useful guidelines in formulating a suitable response. [19] Awareness of basic communication techniques and strategies on how to communicate with difficult or deceptive individuals may also be extremely helpful. Ultimately, the choice of tactic(s) to be used to rebut difficult or unethical conduct is a question of personal judgment, as what may be an appropriate response in one situation may be excessive or too conciliatory in other circumstances. F. Preparing for a Negotiation (i) Initial Assessment The negotiation process begins with a communication or signal from one party to the other indicating a willingness to bargain. Since negotiation is a voluntary process, the first and fundamental step to be taken is to confirm whether or not the other party or parties are interested in negotiations. In making such an assessment, it is important to take into account the following factors:
(ii) Contacting the Other Party Once it has been decided that negotiations are an appropriate course of action, arrangements that must be made with the other parties include:
Consistency in these matters will not only assist in ensuring the negotiations are as effective as possible, they will also reinforce one's credibility and can thus contribute to establishing mutual confidence and trust. [20] (iii) Preparation of a Strategy and Interest Assessment A crucial factor in achieving one's goals in negotiation is thorough preparation. Therefore, it is suggested that the following steps should be taken prior to any bargaining session:
G. Steps of a Negotiation [24] Each negotiation has its own unique characteristics. There is thus no uniform and exclusive manner governing the organization of a bargaining session. For example, the timing of an offer and the question of which party is to make the first offer fall within the discretion of the negotiator and are determined by the overall dynamic of a particular negotiation. (i) Negotiation Session During any negotiation, the following considerations should be kept in mind:
(ii) Statutory/Policy Considerations A negotiator's authority is limited not only by the mandate given by his or her principal or client, but also by factors that may not be explicitly mentioned in her or his mandate, such as existing statutes, regulations or government policies. Justice counsel have a particular duty to ensure that any agreement reached does not breach the terms of any law or policy directive. For example, the Minister of Justice has responsibility for a number of federal statutes, [27] including the Access to Information Act, [28] the Canadian Human Rights Act, [29] the Canadian Bill of Rights, [30] the Commercial Arbitration Act,[31] the Crown Liability and Proceedings Act, [32] the Federal Real Property Act, [33] the Official Languages Act, [34] the Privacy Act, [35] and the United Nations Foreign Arbitral Awards Convention. [36] These statutes are cited here only as examples and are not intended to provide a definitive list of federal statutes to be consulted by Justice counsel. Counsel should examine the relevant federal, provincial or territorial laws which may be applicable to the particular fact situation or client department. Any agreement reached between the parties cannot override the terms of the Access to Information Act, the Privacy Act, or the Official Languages Act as these laws are of general application. Please refer to the documents "Confidentiality: Access to Information Act and Privacy Act " and "Official Languages Act: Considerations " contained in this Reference Guide for further discussion. Appendix A: Checklist for negotiation1. Initial assessment: a) Authority/Mandate to negotiate and reach an agreement or settlement 2. Contact with the other party to arrange/confirm: a) Agenda 3. Preparation of a strategy and interest assessment: a) Study the issues 4. Pointers for a negotiation: a) Concentrate on interests, not positions [<-] 1. The Law Society of Upper Canada "Short Glossary of Dispute Resolution Terms" (Toronto: 1992) at 6. [<-] 2. S.G. Goldberg; E.A. Frank; N.H. Rogers; Dispute Resolution: Negotiation, Mediation, and Other Processes, (2nd ed.) (Boston: Little, Brown and Company, 1992) at 3. [<-] 3. Please refer to the Glossary, supra at page 1 of this document. [<-] 4. Ibid. [<-] 5. Fisher, Patton & Ury, supra, note 1 at 3-11. [<-] 6. Murray, supra,
note 2 at 184-185. [<-] 7. Murray, ibid.
at 180-181. [<-] 8. Ibid. [<-] 9. Fisher, Patton &
Ury, supra, note 1 at xviii-xix. [<-] 10. Fisher, Patton & Ury, Ibid. [<-] 11. An example of the
rules of professional conduct governing lawyers' conduct in negotiations
can be found in the Code of Professional Conduct published by the Canadian
Bar Association in 1988. Chapter IX, "The Lawyer as Advocate",
(pp. 36 ff.) does not specifically describe the steps to be used by lawyers
in negotiation. However, it elaborates on what constitutes appropriate
behaviour, including the following: [<-] 12. Janos Nyerges, "Ten
Commandments for a Negotiator", (1987) 3 Negotiation Journal 21. I believe that it is not a sound practice to negotiate in a way that rewards deception, stubbornness, dirty tricks, and taking risks. I think it wiser for our clients, ourselves and our society to deal with differences in a way that optimizes the chance of reaching a fair outcome efficiently and amicably; that rewards those who are better prepared, more skilful and efficient, and who have the better case as measured by objective standards of fairness; and that makes each successive negotiation likely to be even better. (This does not mean that a negotiator should disclose everything or make unjustified concessions.) Roger Fisher, "A Code of Negotiation Practices for Lawyers" (1985) 1 Negotiation Journal 105 at 106. [<-] 13. Treasury Board Manual, Information and Administrative Management Component, Guideline 12, 31-05-93, page 13. [<-] 14. Ibid. "Expanded Use of Arbitration for Contract Dispute Resolution", Treasury Board, Contracting Policy Notice 1993-1, File No. 3800-027, 28 January 1993. "Guidelines for Settling Disputes in Real Property Transactions by Arbitration" Treasury Board Manual, Information and Administrative Management Component, Chap. 1-12, App. C., 31 October 1994. This and other relevant policies can be found in the "Dispute Resolution Reference Guide" published by this Department. [<-] 15. I. William Zartman & Maureen Berman, The Practical Negotiator (New Haven: Yale University Press, 1982) at 132, 226. [<-] 16. See for example Eve Hill, "Alternative Dispute Resolution in a Feminist Voice" (1990) 5 Ohio State Journal on Dispute Resolution 337 at 370. Ms. Hill describes negotiation as a method of ADR that allows feminists to inject a female perspective into the process of dispute resolution. [<-] 17. Jeffrey Z. Rubin and Frank E.A. Sander, "Culture, Negotiation and the Eye of the Beholder" (1991) 7 Negotiation Journal 249 at 253. Zartman and Berman, supra, note 20 at 229. [<-] 18. Fisher, Patton & Ury, supra, note 1 at 131-140. Thomas R. Colosi, On and Off the Record: Colosi on Negotiation (Dubuque: Kendall/Hunt Publishing Co., 1993) at 54. [<-] 19. Colosi, ibid. at 54-56. Fisher, Patton & Ury, ibid. at 129-143. William Ury, Getting Past No (New York: Bantam Books, 1991) esp. at 94-104. [<-] 20. Thomas R. Colosi, On and Off the Record: Colosi on Negotiation (Dubuque: Kendall/Hunt Publishing Co., 1993) at 9-11. [<-] 21. Ibid. at 40-44. [<-] 22. Fisher, Patton & Ury, supra, note 5 at 100. [<-] 23. Ibid. [<-] 24. The ideas found in Part G of this text have been derived from the works of a number of the authors previously cited in this text. However, the basic steps enumerated in this part are taken largely from Getting to Yes by Fisher, Patton and Ury (supra, note 1). Footnotes are provided where reference is made to the works of other authors. [<-] 25. Colosi, supra, note 23 at 52-53. [<-] 26. A discussion of these tactics and how to deal with them can be found in Part E of this text "Dealing with Difficult or Deceptive Conduct" at page 10. [<-] 27. 1994-1995 Estimates Part III: Department of Justice Canada (Ottawa: Supply and Services Canada, 1994) at 81-82. [<-] 28. R.S.C. 1985, c. A-1, as am. [<-] 29. R.S.C. 1985, c. H-6, as am. [<-] 30. R.S.C. 1985, Appendix III. [<-] 31. R.S.C. 1985, c. 17 (2nd supp.). [<-] 32. R.S.C. 1985, c. C-50. [<-] 33. S.C. 1991, c. 50. [<-] 34. R.S.C. 1985, c. 31 (4th supp.). [<-] 35. R.S.C. 1985, c. P-21. [<-] 36. R.S.C. 1985, c. 16 (2nd supp.). |
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