Unfortunately, parties frequently fail to undertake an accurate and comprehensive analysis of their alternatives and, therefore, negotiate poorly based on unrealistic and uninformed ideas of what they might obtain in the absence of a negotiated agreement. Similarly, a company or government institution using in-house counsel may discount the costs associated with such counsel as simply part of their overhead. All rights reserved. Having your BATNA prepared can also enable you … If an alternative looks highly attractive and is highly probable, a party may choose to reject a proposal that is significantly less satisfactory. where the probability of a $100,000 judgment is only 5%, the expected value of this outcome is .05 x $100,000 = $5,000). Plaintiff proves seller was aware of and failed to reveal these problems with the property, and must reimburse for damages. 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. 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. Said another way, it is the best you can do if the WATNA is the Worst Alternative to a Negotiated Agreement. WATNA is a very helpful tool to consider prior to entering into any negotiation as it helps you have more clarity and negotiation success. For example, in an employment discrimination case, the predicted outcomes may be based on elements that a court would include in an award such as back pay, front pay, emotional distress and so on. 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? Now that you have read all 5 parts of this series you are well on your way to negotiating success. Plaintiff proves awareness of some problems but not others. 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. And show the advantage of having it. It is very difficult to reach a settlement if one or both parties are seeking an amount outside of these parameters. 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. ", Catholic Charities Hawaii launch $6M rent relief program, Conflicts over noise in apartments on the rise amid pandemic. You and your colleagues […], Copyright © 2021 Bold New Directions. One of the mediator's tasks is to help parties make more realistic assessments of their case to improve decision-making. 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. Whether or not a good BATNA exists or can be developed, parties are well advised to enter negotiations with accurate information about possible alternative outcomes because this gives them a better sense of how to manage the negotiation. 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. 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. The tone and confidence of the mediator in presenting this tool are usually significant to acceptance. Parties and attorneys almost invariably overestimate their best case scenarios and underestimate their worst case scenarios for many reasons based in human psychology. When parties are in litigation but are not represented by attorneys or do not have attorneys present in the mediation, development of the analysis is usually more difficult. In some cases, a party will reject a proposed resolution even though the probable alternatives are clearly less attractive in a "business" sense. But defendant has different estimates for some damages. 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. "Mediate.com is very resourceful and useful in this field. Of course, many attorneys undertake this analysis prior to mediation or negotiation as part of their own case preparation. Neighbor A analyzes how Neighbor B may react, from compliance with requests to retaliatory actions. Give three examples; What are the different types of Negotiation? Whether or not it is appropriate for a mediator to predict legal outcomes is controversial. The determination will depend on the type of claim, for example, if the case is for breach of contract, for personal injury, for … 1. 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. 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. In this case, you might restructure your bottom line back to $350,000 or even lower to sell faster. The exact opposite of this option is the WATNA (worst alternative to a negotiated agreement). 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. In some circumstances, however, a case is clearly “all or nothing” and development of a mid-case scenario does not apply. Question: Can you please explain BATNA to me and tell me how it is useful in negotiating?. As suggested earlier, BATNA/WATNA analysis can also be less influential where parties simply refuse to give it meaning because they can afford to do so and have other interests that are more important to them. 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