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Note: Even when developed in private, confidential sessions, mediators should not assume that parties or attorneys have been completely forthcoming about their alternatives analysis. If the mediator believes that the parties would also benefit from hearing a persuasive presentation on possible outcomes by opposing counsel, the analysis can always be reviewed in a subsequent joint session. However, use of this information is often an extremely useful tool in educating the parties to better understand their risks. Understand basic negotiation principles, including BATNA, WATNA, WAP, and the ZOPA. In other words, what are my "win" and "lose" scenarios along any given alternative path, and how likely are these outcomes or something in between? constantly changing. Like playing hardball, this … . In this instance, the analysis focuses on the "win" and "lose" outcomes in court. These variables may have a significant impact on costs or the perception of costs. Following this section, is a sample BATNA/WATNA analysis in a real estate sale case using a format that is useful in assessing the litigation alternative. What are the three types of negotiation behavior? ", Catholic Charities Hawaii launch $6M rent relief program, Conflicts over noise in apartments on the rise amid pandemic. Court less inclined to grant emotional distress. Do not confuse "alternatives" analysis with "options" analysis. All rights reserved. And show the advantage of having it. Company*, Virtual Training Programs help your team build skills while working at home. Having a decent WATNA can make it easier to walk away from an inadequate offer. It also helps mediators to ground parties in reality and prevent impasse by focusing them on actual possibilities rather than unformulated dreams. Analysis of internal business environment helps to identify strength of the firm. The most common alternative path in many mediated cases is litigation or arbitration, in which parties seek a judgment from a judge, jury or arbitrator that they hope will satisfy their interests better than anything they might be able to obtain in a negotiation with the other party. Sometimes attorneys assure mediators that they have undertaken the analysis with the parties but say that they do not want to share it with the mediator. It is almost always helpful to compare possible outcomes along alternative paths to actual proposals on the table in a negotiation before making a decision within the negotiation. Of course, many attorneys undertake this analysis prior to mediation or negotiation as part of their own case preparation. In the preparation phase of your negotiation, you need to consider what is the worst that will happen if you do not sell in a particular negotiation. Source: Bargaining for Advantage: Negotiation strategies for reasonable people. People who can master the art of negotiation find they can save time, save money, develop a higher degree of satisfaction with outcomes at home and at work, and earn greater respect in the workplace and everywhere else. It is very easy for parties to react in a defensive, hostile manner to an analysis that seems threatening and/or highly exaggerated. Mediators should also keep in mind that they may have different values, risk tolerance levels and approaches to decision-making than the parties and take care to respect those differences. Parties and attorneys almost invariably overestimate their best case scenarios and underestimate their worst case scenarios for many reasons based in human psychology. Question: Can you please explain BATNA to me and tell me how it is useful in negotiating?. Negotiating for Results. For example, parties with weak BATNAs or highly undesirable WATNAs may want to take care not to burn any bridges and/or prepare to minimize the damage this information may cause if known by the other party. At a minimum, parties gain clearer understanding of their interests and the value they are placing upon them. However, if a mediator chooses to do so, the mediator is on safest ground when suggesting possible ranges of outcomes rather than highly specific outcomes and probabilities, and taking care to remind the parties that this does not constitute legal advice and cannot substitute for the opinion of their own attorney. If a mediator needs the parties to be fully honest and transparent, they will need to present the analysis in a way that encourages honesty between the parties and the mediator. You and your colleagues […], Copyright © 2021 Bold New Directions. When BATNA/WATNA analysis is almost inevitable, as in cases already in litigation, it is a good idea to ask attorneys to prepare and discuss the analysis with their clients prior to the mediation. Where money is not involved, the analysis is sometimes simplified to a review of Outcomes and Costs. Mediators who understand these financial realities and can assist clients in examining them have powerful tools. Bold New Directions specializes in training solutions that build leadership skills, communication skills and resilience at work. However, if parties clearly have substantial work to do in order to reach resolution and the mediator anticipates hard bargaining, the analysis is probably recommended. Preparation of a good BATNA can strengthen a party's leverage in the negotiation. In fact, negotiation experts frequently advise careful analysis and development of at least one BATNA and WATNA prior to entry in negotiation. typically, the money negotiation). From the initiation to actual trial, a new court action can take several months to several years. Advantages of Alternative Dispute Resolution. Both tools are extremely valuable. Of course, the analysis itself is often used to decide whether or not it makes sense for a party to pursue a particular alternative. Last Name* It determines your reservation point (the worst price you are willing to accept). Avoiding a WATNA when calculating your BATNA. 1) Increases negotiating power. When BATNA/WATNA analysis is almost inevitable, as in cases already in litigation, it is a good idea to ask attorneys to prepare and discuss the analysis with their clients prior to the mediation. Read on to learn about the WATNA as it relates to the sale of a house. The parties are making their choices having considered and with full knowledge of these probable alternative outcomes (i.e. If this is not possible, the mediator may try to guide the parties through the analysis, but few parties will have the legal expertise necessary to make reasonable predictions about litigation outcomes. If these can be discovered, the mediator may be better able to negotiate on the process with the party or understand why the analysis would not be beneficial in that case. Let us … Many people think that negotiating is difficult and full of underhanded tactics. Plaintiff proves seller was aware of and failed to reveal these problems with the property, and must reimburse for damages. Typically, it is wise to develop the analysis in private session with each of the parties and their attorneys. Strength of the business firm means capacity of the firm to gain advantage over its competitors. For example, when purchasing a car, the BATNA might be to accept the best deal I can get at a different dealer. This can be stated without using the terms "BATNA" and "WATNA" which are likely to be unfamiliar and confusing to the parties. Moreover, in a confidential caucus, parties and attorneys tend to be more forthcoming and realistic about their alternatives. It can also be your trump card to make the deal happen to your advantage. In a litigated matter, this leads naturally into a discussion of the strengths and weaknesses of the case on both sides. In a non-litigated matter, the mediator should lead the parties in a thoughtful analysis of their reasons for believing that a particular outcome is more or less likely. Mediators who can walk their clients through a carefully detailed and organized BATNA/WATNA analysis are providing a valuable service. Plaintiff proves awareness of some problems but not others. In any event, the analysis usually serves as a tool to help the parties and the mediator explain offers and counter-offers. Costs already incurred are considered water under the bridge. Desire for Leverage: Developing a BATNA/WATNA analysis will ensure that a party has an idea of … By Brad Spangler July 2012 (Original publication date June 2003; reviewed and updated in July 2012 by Heidi Burgess) What BATNAs Are BATNA is a term coined by Roger Fisher and William Ury in their 1981 bestseller, Getting to Yes: Negotiating Without Giving In. Well, that limits your options in the particular negotiation. Using negotiation lingo, alternatives are what you could do to meet your interests if you walked away from the current negotiation. "with their eyes wide open"). Posted Feb 17, 2014 ************************************************************************************, Jim Hornickel is co-founder of Bold New Directions, a transformational learning company that works with companies to transform people and performance through training solutions including seminars, webinars, coaching and keynote events. " is very resourceful and useful in this field. What is Negotiation? [1] It stands for "Best ALTERNATIVE TO a negotiated agreement." It is always in a flux, i.e. For example, an employer may be willing to risk significant losses, at high costs, to maintain a reputation that they do not settle certain types of claims. Whether or not it is appropriate for a mediator to predict legal outcomes is controversial. January 28, 2017 (forthcoming, Negotiation Journal, April 2017) Abstract: The Best Alternative To a Negotiated Agreement (“BATNA”) concept in negotiation has proved to … The value of knowing your best alternative to a negotiated agreement is that: It provides an alternative if negotiations fall through. WATNA is a very helpful tool to consider prior to entering into any negotiation as it helps you have more clarity and negotiation success. 4) Bargaining and problem solving 5) Closure and implementation Preparing and Planning. There are five interactive areas that make up the range: the Wish, the Aspiration, the Bottom Line, the BATNA, and the WATNA. Give at least one example for each. If an alternative looks highly attractive and is highly probable, a party may choose to reject a proposal that is significantly less satisfactory. You’ll be glad you did when you come out of your next negotiation more satisfied and financially ahead. Again, the purpose of the analysis is to educate and promote informed decision-making, not to force settlement or impose the mediator's idea of what makes sense. If the mediator provides the information for the analysis (assuming that the mediator is competent to do so), the mediator risks losing neutrality and/or the appearance of neutrality. The basic formula for the analysis, where money is involved, can be described as "Initial Result" - "Costs" = "Final Outcome." At Bold New Directions, we are known for our interactive training programs that allow breakout groups, small discussions and learning partners. where the probability of a $100,000 judgment is only 5%, the expected value of this outcome is .05 x $100,000 = $5,000). Parties and attorneys rarely resist undertaking the analysis if they understand and believe that it is in their own best interests, serving as a useful tool for informed decision-making. The analysis assists the parties in deciding if a particular resolution is in their best interests or not. For example, in a personal injury case, decision-tree analysis might look at the separate probabilities for establishing each of the legal elements involved (duty, breach, causation and damages) in order to reach an overall probability for win or loss with the expected values for those outcomes in light of the assigned probabilities. When the analysis focuses on alternative paths other than litigation, the parties themselves and/or other types of experts or resources may be needed to provide information about possible outcomes. And the organization must keep a close at its environment via environmental scanning. Where the negotiation focuses less on money or other specific outcomes that might be awarded by a court, the BATNA/WATNA analysis may be less influential in the development of settlement proposals and may be completely unrelated to what the parties decide to do. They do not need to conclusively determine what would happen court or along another alternative path during the mediation, but rather get a clearer sense of probable outcomes as possible reference points for their negotiations. The determination will depend on the type of claim, for example, if the case is for breach of contract, for personal injury, for … The exact opposite of this option is the WATNA (worst alternative to a negotiated agreement). This is Earlier articles in the series focused on the power of the Wish, the Aspiration, the Bottom Line, and the BATNA. A simple statement should be sufficient, suggesting that it may be helpful to the parties, at some point in the process, to examine their alternatives outside of mediation so as to compare them to options on the table in the mediation. Plaintiff proves seller was aware of and failed to reveal these problems with the property, and must reimburse for damages. This article explains the concept of alternatives analysis and presents a method for conducting an analysis with parties in mediation, including many of the considerations that may affect the parties’ perception and use of the analysis. In some circumstances, however, a case is clearly “all or nothing” and development of a mid-case scenario does not apply. On the other hand, if proposed options in the negotiation look reasonable or better in comparison to probable alternative outcomes, a party may feel more comfortable accepting a proposed deal. The worse their alternatives, the more accommodating they may be in the settlement negotiations. Sales Targets A customer can sense that a salesperson hasn't hit their sales target and it is almost the end of the financial year. In their seminal book, Getting to Yes, published in 1981, Harvard Professor Roger Fischer and Dr. William Ury proposed "principled negotiation" as a third way to approach negotiations.A principled negotiation seeks to divide the emotions of participants from … It is often most useful to conduct this analysis after information-gathering and exploration of interests and prior to beginning distributive bargaining (i.e. Said another way, it is the best you can do if the BATNA vs WATNA - 2013 Apr 7: Commentator: Josh Roles (United Kingdom - Southampton) "HYour article has been extremely helpful in clearing up exactly what the uses of assessing your BATNA can achieve, alongside the pitfalls if you don't realise your BATNA. BATNA means “ Best Alternative to a Negotiated Agreement.” This is your alternate plan when the talks start to wobble out of control. These costs can be both monetary and non-monetary and should be detailed to the extent possible. The content and use of a BATNA/WATNA analysis will be affected by variables such as contingency fee arrangements, the use of in-house counsel, the involvement of insurance companies, statutory or contractual fee-shifting and the possibility of bankruptcy. Related to BATNA is a WATNA, the Worst Alternative To a Negotiated Agreement, a concept aimed at reducing the risk of one being too realistic during a negotiation process. 1. It is free from technicalities of courts, here informal ways are applied in resolving dispute. Or some insurance companies may routinely refuse to settle certain cases beyond certain amounts because they are following standard procedures that they believe serve them well overall, and they are willing and able to bear the costs involved in continued litigation. When BATNA/WATNA analysis is almost inevitable, as in cases already in litigation, it is a good idea to ask attorneys to prepare and discuss the analysis with their clients prior to the mediation. Since its usually the last resort, the other party involved has to accept the BATNA presented or lose the negotiation. The Advantages of Mediation Save time. Generally it's an advantage to keep your BATNA secret. Gain skill in developing alternatives and recognizing options. The options analysis remains within the context of the negotiation with the other party and is not the same as "BATNA/WATNA" analysis. It is usually easier to question and refine these estimates using the other party's predictions and information rather than risking more direct contradiction by the mediator. The parties evaluate these options, formally or informally, to see how well they satisfy their interests. The starting point for determining a party’s P-BATNA and P-WATNA is estimating the outcome of the case outside of mediation. As demonstrated in the subsequent examples, outcomes and costs should be developed carefully and specifically so that they can be analyzed and understood by the party and potentially explained to the other side. Again, most parties and attorneys are willing to allow the mediator to share information that they believe will be helpful in persuading the other party that they over-estimating their strengths or under-estimating their weaknesses. Mediators should, nevertheless, seek permission to share any information gained during the analysis that they believe will help the parties to better understand the case and the other party. If slowing things down works for crisis hostage negotiators, it can help you too . However, the exercise is still useful in this instance because: 1. In that case, the focus of the analysis shifts completely from theoretically possible legal outcomes to one party’s actual resources and the value that the party places on avoiding bankruptcy. Mediators can also remind parties that this is a "background" analysis that can be set to the side as parties return to negotiation within the mediation. Ideally, they have the litigation experience and knowledge of the venue in which they operate to be able to provide "expert" information about possible best and worst outcomes. In either case, parties should be reminded that the BATNA/WATNA analysis is a “backdrop” analysis for the negotiation and that they are free to settle their dispute in any mutually agreeable fashion, perhaps completely unrelated to the outcomes possible along alternative paths. Knowledge of these interests may be helpful to continued negotiation. Q & A Table of Contents. Neighbor A’s reputation suffers because other neighbors hear about Neighbor A’s behavior. The tone and confidence of the mediator in presenting this tool are usually significant to acceptance. Advantages of this approach are that the analysis may be more thoughtful given more time to prepare and the clients have had more time to absorb the implications prior to the mediation. For example, a mediator may discover during BATNA/WATNA analysis that the attorney for one of the parties is serving on a contingency fee basis. It can involve deceptive measures such as intimidation tactics, concealing facts about the transaction and using means that present unfair advantage over the other party. Even when attorneys have refused to share their own thinking with the mediator, the mediator may gain helpful information by sharing their own or the other party's estimate of a range of possible outcomes and noting how the attorneys react or correct them. Sometimes, mediators can prompt parties to consult with an attorney prior to mediation, or by phone during the mediation. And, always think mutuality-based, win-win as these will deepen relationships so people want to work with you again. More Dayton residents have conflict during COVID-19. Whatever I ), Lumping it (and hoping the situation will improve). For example, a win of $100,000 may sound wonderful to a plaintiff until he or she hears that there is only a 5% chance of such a result. Advantages of this approach are that the analysis may be more thoughtful given more time to prepare and the clients have had more time to absorb the implications prior to the mediation. If parties refuse to undertake the analysis despite helpful education by the mediator, the mediator may want to explore the reasons behind the refusal to better understand the interests driving the resistance. Neighbor A analyzes how Neighbor B may react, from compliance with requests to retaliatory actions. If parties feel pressured or fear that it will be used as a hammer against them, or shared inappropriately with the other party, they will naturally resist. They may be more concerned about the mediator sharing their worst case scenario and any costs involved on their side (best or worst case) but this information is often less helpful as leverage. In some cases, a party will reject a proposed resolution even though the probable alternatives are clearly less attractive in a "business" sense. You may ask “what is the range?” Many business professionals who negotiate in their jobs focus only on the monetary aspect when thinking about their range. Those who do not welcome the analysis are more likely to go along with it in private. BATNA/WATNA analysis can also lose meaning in some contexts, such as cases where bankruptcy is a realistic possibility. The probabilities give greater meaning to the numbers. Many parties will naturally use these same factors to formulate their offers and counter-offers in mediation, usually working toward a settlement amount that lies within the parameters created by the best and worst case outcomes in court. Principled Approach To Negotiations. These benefits include: Enhancing a BATNA: By looking closely at a BATNA and the other alternatives, a party may be able to identify ways to remove their WATNA and make their BATNA a sure thing should the negotiations not work. Again, this can be explored and negotiated as with any other tool in the process. Advantages of this approach are that the analysis may be more thoughtful given more time to prepare and the clients have had more time to absorb the implications prior to the mediation. Analysis of Mediation in the Indian Context Section 89 of the Code of Civil Procedure, 1908 (“the CPC”), inserted by CPC (Amendment) Act 1999, and brought into effect on 1st July, 2002, is an attempt to blend the judicial and non-judicial dispute resolution mechanism in order to envisage the equal rights of every person in the eyes of law. Now that you have read all 5 parts of this series you are well on your way to negotiating success. Mediators can try to improve the quality of analysis by taking steps, as necessary, to educate the parties and their representative regarding the analysis. WATNA stands for the Worst Alternative to a Negotiated Agreement. 2. By explaining the educational purpose and method of analysis, mediators can reduce the tendency to perceive this tool as "blackmail" or inappropriate arm-twisting. WATNA is the Worst Alternative to a Negotiated Agreement. Even if they are less knowledgeable than the mediator might like, they will expect to be consulted if this analysis is undertaken. Identify the various negotiation styles and their advantages and disadvantages. However, when first drawing out the analysis, the mediator may find it more effective to accept a party or attorney's estimations for possible best and worst outcomes. Any outcome, best or worst case, has costs. You can learn more about Jim Hornickel and the topic of Negotiations Training at Bold New Directions by visiting the company web site at or at our negotiations training site, First Name* This five part series uncovers the value of key elements in the negotiations process – specifically the negotiations range. Moving through a BATNA/WATNA analysis can be beneficial for a few reasons other than just to determine a BATNA and WATNA. Parties will often give the mediator permission to share with the other party their best case prediction when they understand that it gives the mediator leverage to move the other party in their direction towards settlement. Mediation - speak freely, listen, understand, then problem solve, Legal Problems between Business Partners Can be Resolved with Mediation Tools in Costa Rica, Court urges family to make efforts to mediate in dispute over hotel business, EEOC Announces Extension of Act Mediation Pilot, Clear Space, theater complex opponents enter into mediation, Moving America forward: lessons from the mediation table, Seven Steps for Effective Problem Solving in the Workplace, Are You Really Ready for Divorce? However, if the other side sticks to an offer that's worse than your BATNA — you might need to reveal it in a final attempt to get them to raise their offer. Litigation involves a lengthy process of discovery, court pleadings, and court hearings. If your WATNA is weak, you may be less concerned about the concessions you have to … The costs used in the analysis are usually limited to future costs that might be avoided in the event that the mediation or negotiation is successful. How to Learn More: Now that you have read all 5 parts of this series you are well on your way to negotiating success. The reason to consider carefully whether or not to inject BATNA/WATNA analysis in this context is that, by its nature, the analysis can seem negative or threatening and may inject an undesired tone into a negotiation that is proceeding amicably. In this example of selling a home, you may need to sell your home by a certain deadline to relocate for a new job. Less time consuming: people resolve their dispute in short period as compared to courts; Cost effective method: it saves lot of money if one undergoes in litigation process. If Neighbor A decided to pursue the pressure campaign described above, and Neighbor B was considering alternatives to negotiation, one path he/she might consider would be “do nothing and hope it goes away.”, Initial Presentation of Analysis Within a Mediation. Seeking results from a higher authority within an organization, Seeking new (suppliers, buyers, distributors, employees etc. BATNA/WATNA analysis can be highly influential in case assessment and settlement. To avoid the emotional cost of accepting an offer that gives us very little, we often react self-destructively. However, there are many other elements that can be included such as service hours, warranties, extras, delivery times, percentages… Be creative! The purpose of the analysis is to help parties make informed decisions about possible options for resolution or a deal. The 8 Questions You Need to Ask, Styles of Mediation: Facilitative, Evaluative, and Transformative Mediation, 50 Questions You Can Ask Friends and Relatives in Political Arguments, Mediation Strategies: A Lawyer’s Guide To Successful Negotiation, How To Screw Up a Mediation in our Brave New World, We Have to Talk: A Step-By-Step Checklist for Difficult Conversations, Glasl's Nine-Stage Model Of Conflict Escalation, Mediation, Neutrality, Political Conflicts, and the 2020 Elections, 13 Tools for Resolving Conflict in the Workplace, with Customers and in Life, Psychological and Emotional Aspects of Divorce, Top 10 Tips for a Successful Employment Mediation, Informal Conflict Resolution:A Workplace Case Study, Top Mediator Website,, Celebrates Past, Present & Future of Mediation. For example, private equity companies report that retailers facing bankruptcy often choose to close their doors rather than accept a low offer that would leave the owners better off. Who Provides the Information for the Analysis: When the analysis focuses on possible litigated outcomes, attorneys are the natural sources of information. The parties may consider some ideas to be favorable or "winning" options and others to be "losing" options, but all are theoretically possible bases for resolution between the parties to the dispute even though some are not realistic or would never be acceptable to both parties. Of course, mediators may still find that that a well done BATNA/WATNA analysis is more persuasive than expected or admitted with clients such as these. What are the best (“BATNA”) and worst (“WATNA”) possible outcomes along a particular path if I try to get my interests satisfied in a way that does not require negotiation with the other party? They can also guide the parties through the elements of the analysis during private sessions so as to ensure that it is done thoroughly, and play devil's advocate and ask reality testing questions when attorneys make predictions that seem overly exaggerated or inaccurate. Thus … very helpful for mediation promotion in Hong Kong. Possible disadvantages of this approach are that attorneys may be less honestly spontaneous about their predictions of litigated outcomes with the mediator. However, other alternative paths that might exist could include: Each of these alternative paths has its' own best and worst outcomes. The format presented here may be more “user-friendly” for mediators, parties and attorneys in the average case. Note: the defendant’s analysis is not necessarily a mirror-image of the plaintiff’s analysis because the parties may be making different predictions regarding outcomes and may have different costs. Advantages of this approach are that the analysis may be more thoughtful given more time to prepare and the clients have had more time to absorb the implications prior to the mediation. If the parties appear to be reaching an interest-based resolution with relative ease, the mediator may decide not to undertake a BATNA/WATNA analysis at all, or only in a cursory fashion as part of reality-testing before closure.

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