November 29, 2020

Negotiation: A Mode of ADR

Alternative Disputes Resolution is defined as a method used for conflict settlement among the parties by reaching an amenable settlement through discussions and negotiations.[1] The concept of ADR has been devised with an intent to provide an alternative to the conventional methods of dispute settlement.[2] Negotiation is one such mechanism of ADR. As stated by Nelson Mandela, ‘Negotiation and discussion are the greatest weapons we have for promoting peace and development’. Negotiation is a dispute where parties come together and then try to resolve their disputes by means of mutual understanding and negotiations. The disputing parties have the choice to appoint a negotiator or not. In case, a negotiator is appointed, he has a very small role to play in getting the parties to a common understanding. Negotiation is not governed by law. All the decisions regarding such negotiation, for instance, the time, procedure and place where the negotiation will be conducted is totally up to the discretion of the parties.

Indians are quite passionate about negotiation. From negotiating over disputes to negotiating over responsibilities, one participates in this mechanism of Alternative Disputes Resolution in one or the other way. The terms Negotiation and Bargaining are interchangeable. However, the difference between these terms two lies in the fact that in bargaining one party ultimately compromises by agreeing to the terms of other parties whereas in negotiation both parties enjoy a win-win situation. The term ‘Negotiation’ has been derived from a Latin expression, ‘Negotiari’ which implies ‘to carry on business’. Negotiation can be defined as a bargaining process done between two parties with the object of dispute settlement. The negotiating parties should consult an advocate before entering into negotiations as then the party will be fully aware of their rights. Also, professional expertise is required during the process of negotiation so as to ensure that the disputing parties put their emotions aside. The parties to the dispute must have their focus on the core of the dispute and thereby only aim at its resolution. The parties involved in the dispute resolution try to reach a mutual agreement by way of settlement. The parties certainly aim at reaching some sort of remedy by cooperating and collaborating among themselves on terms agreeable by both. [3] Negotiation is one of the most commonly used forms of alternative dispute resolution as it is preferred in non-profit organizations, businesses, government organizations, and legal proceedings for instance in matters of divorce, adoption, etc. [4] Following are some of the characteristics of Negotiation:

· Two or more parties

· Negotiation contributes to better results

· Conflicts between needs and desires

· Equalizing process

· It contributes to attaining mutual satisfaction or agreement.

Unlike other mechanisms of Alternative Dispute Resolution, negotiations are concluded without the involvement of the third party and only through discussions between parties and their representatives. Thus, Negotiation is a non-binding process. The parties should consult a lawyer before entering into negotiations as they would get a brief description of their rights and responsibilities concerning the matter they are involved in.[5] There is a minimum requirement of two parties to proceed for negotiation. The negotiating parties are struck between the fulfillment of their needs and desires. Although such parties have their pre-determined goals fixed, which they wish to achieve, still clashes arise during negotiation. Apart from the above-mentioned characteristics of negotiation, the parties undergoing this process are also willing to adjust themselves by being in a compromising position.[6]

A popular legal maxim, “Consilia omnia verbis prius experiri, quam armis sapientem decet” which means that an intelligent man would prefer negotiation before using arms, rightfully justifies the purpose behind using negotiation.[7] This process helps the conflicting parties by suggesting them better results and also aid them in concluding a mutual agreement and settlement. Overall, it is an equalization process whereby a solution is offered keeping in mind the interests of both parties. It is only when the parties at dispute doesn’t consider themselves to be capable enough of resolving the dispute by themselves or by the consultation of independent individual, they might choose another popular mechanism of alternative dispute resolution, namely, Mediation.

Steps of Negotiation Process

The five steps to the negotiation process are:

· Preparing and Planning

The primary step is the preparation and planning where the parties govern their goals for the negotiation. Each party must decide the “best alternative to a negotiated agreement (BATNA)” and “worst alternative to a negotiated agreement (WATNA)”. These two signify the extreme possibilities of the situation. The better the BATNA is, the greater will be the negotiating capacity as a suitable alternative eliminates the chances of an unsuccessful negotiation. Determining the WATNA is equally important as it shapes the worst-case scenario if the negotiation process does not work. It includes risks and costs.

· Defining ground rules

The second step includes defining the ground rules that relate to the procedural necessities for the negotiation. The duration of the process, venue of the proceedings and their initiation are agreed upon in this particular step.

· Clarification and justification

In the third step, parties will clear up and resolve any misunderstanding about the situation. This step is an opportunity for informing and updating the other party on the issues in the dispute. Both the disputants shed light on their demands to ensure that the negotiation is properly done.

· Bargaining and problem solving

The fourth step is bargaining and problem-solving. Bargaining and problem solving is the spirit of negotiation as it is where the parties may take part or cooperate as they each pursue to fulfill their interests. There is no single approach for a negotiation style. Diverse bargaining styles and tactics are adopted depending upon the situation.

The negotiator who engages in a competitive bargaining style is exclusively concerned with attaining his individual goals without bearing in mind the impact on either party. The competitive negotiator forces the opposing party to a settlement that is favorable to the negotiator, and he aims to win as much as possible.

The negotiator who engages in a cooperative bargaining style identifies the interests of the parties and seeks for choices and resolutions that will satisfy both the sides. Cooperative negotiators make effort to settle conflicts so that everyone benefits and focuses on utilizing problem-solving methods to create value for both sides. Such negotiators stress on creativity, empowerment, and control by the parties.

· Closure and implementation

The last step is the validation of an agreement that has been worked out and elucidates how the parties will supervise each other’s actions to ensure that the negotiated agreement is carried out.[8]

Pros and Cons of Negotiation

There are numerous advantages to a negotiation process.

1. Negotiation is a party-based dispute resolution that only involves the stakeholders and no additional third party which makes it a private affair.

2. Negotiations safeguard the freedom of the parties. The parties are free to set plans of their choice which helps in the attainment of the purpose of the negotiation.

3. The consent of both parties is regarded. Also, it is made sure that there is no play of powers and both parties are given equal footing to speak.

4. The negotiations have a possibility of a more successful result as it is eventually grounded on the party’s interest and is completely run by the party’s consent to dissolve the dispute.

5. Negotiation is a voluntary process and there is no intrusion of any third party in the proceedings which results in the protection of the confidential information.

Some of the disadvantages of the negotiation process are:

1. The parties may not always be equal in status and power, which leads to a situation where the party in power uses the scope to dominate the other party’s consent. The consequence may be an unfair agreement which acts as a big disadvantage to the process.

2. The disagreement between the parties occasionally leads to an impasse. An impasse is a situation when the disputant parties come to a halt in their discussion and they are not ready to proceed further. This happens when one of the parties is stubborn over its goals and no middle ground is achieved.

3. The walkout situation occurs when an impasse frustrates the parties to such an extent that no productive discussion can take place.

4. An ineffective negotiation results in unpleasantness between the parties. This leads to strained relations.[9]

Developments in Negotiation

Negotiation is not always a harmful process. In fact, it has the capacity to be a remedial process which helps the disputing parties to converse and reflect upon their differences and settle their disagreements. The cooperative bargaining style can be adopted in the field of negotiation so that the dispute can be resolved amicably. A skilled negotiator should be an expert in varying between the distinct approaches to negotiation to accommodate the specific issues that may arise during the process.[10]

Negotiation can be invoked by the parties at any time, even if the matter is pending in the court. Likewise, it can be terminated at the discretion of the parties. It is the choice of the parties to decide their fate and reach an amicable settlement.[11]

[1] BYJU’S, Topic of the Day: Alternative Dispute Resolution (March 31, 2020) https://byjus.com/free-ias-prep/alternative-dispute-resolution/

[2] GKTODAY, Alternative Dispute Resolution (ADR) in India (May 10, 2017) https://www.gktoday.in/gk/alternative-dispute-resolution/

[3] Alternative Dispute Resolution: Negotiation, LawShelf (March 31, 2020) https://lawshelf.com/shortvideoscontentview/alternative-dispute-resolution-methods-negotiation

[4] Drishti, Alternative Dispute Resolution (ADR) Mechanims, () https://www.drishtiias.com/to-the-points/Paper2/alternative-dispute-resolution-adr-mechanisms-paper-2

[5] CLG, Negotiation, Mediation and Arbitration (October 14, 2018) https://clg.ab.ca/programs-services/dial-a-law/negotiation-mediation-and-arbitration/

[6] MANAGEMENT STUDY HQ, Characteristics of Negotiation (March 24, 2020) https://www.managementstudyhq.com/characteristics-and-steps-of-negotiation-process.html

[7] Saroj Murmu, Negotiation: Meaning, Scope, Advantage & Disadvantage, Legal Bites (July 15, 2019) https://www.legalbites.in/negotiation-meaning-scope-adv-dis/

[8] Alternative Dispute Resolution: Negotiation, LawShelf (March 31, 2020) https://lawshelf.com/shortvideoscontentview/alternative-dispute-resolution-methods-negotiation

[9] Saroj Murmu, Negotiation: Meaning, Scope, Advantage & Disadvantage, Legal Bites (July 15, 2019) https://www.legalbites.in/negotiation-meaning-scope-adv-dis/

[10] Non-Adjudicatory Modes of ADR: Conciliation, Mediation and Negotiation, Shodhganga (March 31, 2020) https://shodhganga.inflibnet.ac.in/bitstream/10603/41488/11/11_chapter%204.pdf

[11] V.G.Ranganath, Negotiation-Mode Of Alternative Dispute Resolution, Legal Service India (September 20, 2019) http://www.legalservicesindia.com/article/245/Negotiation-Mode-Of-Alternative-Dispute-Resolution.html

Author Details: Yashika Kapoor (Fairfield Institute of Management and Technology)

The views of the author are personal only. (if any)

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