Negotiations as One of the Methods of Alternative Dispute Resolution: Definitiion, Strategies, Stages

V.I. Benova, Postgraduate Student, Subdepartment of International Private Law, Moscow State Law Academy named after O.E.Kutafi n, Moscow, Russia

Before considering the category of “negotiations”, it is necessary to note that within the framework of this article this concept will be considered through the prism of the conceptual construct of alternative dispute resolution.

Alternative dispute resolution (ADR) shall be understood as a system of means and methods, not prohibited by law, of non-state (private) resolution of disputes and/or legal conflicts in order to achieve the necessary legal result.

The world practice has seen a great number of the ADR methods, among which there are such procedures as: expert determination, negotiations, facilitated negotiation, conciliation, mediation, med-arb, adjudication, mini-trial, fact finding, dispute review boards, private judging, early neutral evaluation, multi-door courthouse, settlement conference, summary jury trial and etc.

The variety of types of the ADR allows researchers of this issue to classify them by various grounds. For example, A.I. Khersontsev, analyzing the data of the European Commission on the issue of alternative dispute resolution, presents classification based on such criterion as functions of the third party in the procedure of conflict settlement. As a result, the author divided all alternative procedures into two groups. Two types of procedures are referred to the first group. The first type suggests that the third party be involved in coordination and further decision – making which shall be obligatory for the parties to the dispute. The essence of the second type of procedures consists in the fact that the third party involved shall give recommendations to other parties which may follow such recommendations or ignore them. The procedures which are referred by A.I. Khersontsev to the second group suggest that an independent participant shall not formally work out a stance with regard to possible ways of resolvinga dispute, but only helps the parties to conclude a mutually acceptable agreement[1].

As N.V. Serdyukova and I.V. Knyazev[2] note, American legal literature recognizes division of the ADR procedures into preventive, negotiation, supporting, fact-finding, consultative and binding. Preventive procedures, allowing to prevent possible disputes, include negotiated rule-making and joint problem-solving, while negotiation methods include interest-based problem – solving methods including directly the process of negotiations. The main supporting methods of the ADR are mediation, conciliation, ombudsman and settlement conferences. Fact-finding procedures include neutral evaluation and expert fact-finding. The most common consultative forms are mini-trial and non-binding arbitration.

Taking into account the fact that in foreign countries the ADR methods develop not only in the sphere of private-law regulation but also within the framework of judicial procedures (the so – called pre-judicial disputes) it is common practice to emphasize private and public types of alternative procedures[3]. This opinion is shared by E.I. Nosy'reva who condsiders the methods exclusively applied on the basis of voluntary will expression of the parties, i.e.: negotiations, mediation, arbitration, mini-trial, etc to be private types of alternative procedures. In accordance with E.I. Nosy'reva, conditionally – public alternative methods include the methods used inside a judicial system, for example, settlement conferences, prejudicial arbitration, summary jury trial, etc[4].

The ADR methods may be also classified on other grounds. The most common classifications in literature are summarized in article by G.V. Sevast'yanov[5].

All the above mentioned types of classifications have the right to exist, however, they have drawbacks inherent in any classification of drawbacks, for example such as impossibility of univocal attribution of one or another method of the ADR to a certain group.

The most traditional division of ADR methods is the division into fundamental and combined ones. The first group includes: negotiations, mediation, arbitration. These three fundamental types are integral elements of many other procedures and form absolutely new combined forms: med-arb; mini-trial; independent expert evaluation on fact-finding; private judicial system or judge “for rent”[6].

Now we shall consider the concept of “negotiations” and possible strategies of participants of the negotiation process.

The negotiations are a process by which the parties involved in the problem discuss it with each other, trying to achieve a mutually acceptable decision.

The negotiations initiated by the parties themselves (subjects of a conflict or dispute) and not providing for participation of the third parties are among the most comprehensible and efficient ADR methods. They do not incur any serious expenses and, whicht is the most important thing, do not need the government permission and legal regulation. Only the activity and expertise of persons participating in a dispute resolution procedure (settlement of a conflict) are needed for negotiations to be an interested dialogue with regard to forming or formed relations.

In comparison with other ADR methods, the advantages of negotiations are the following:

- in the process of negotiations, the direct interaction of the parties takes place;

- the subjects of the conflict can control various aspects of their interaction to the maximum degree, including independently determining time and limits of discussion, influencing the process of negotiations and the result thereof, determining the framework of the agreement;

- the negotiations allow the subjects of the dispute to work out such an agreement which would satisfy each of the parties and would allow to avoid a long-term judicial proceeding, which may end up in defeat of one of the parties;

- specifics of interaction allows the subjects of the conflict to preserve confidentiality;

As a rule, when a legal dispute arises, the negotiations are the first step with regard to its resolution. Traditionally the parties do not include negotiations clause into contracts. However, in some countries, for example in the USA the lawyers recommend to use such a clause. Negotiations as one of the ADR methods are very well studied in the theory of American law. E.I. Nosy'reva notes in her work[7] that to characterize negotiations American lawyers point out the following categories: models of negotiations, strategy and tactics of negotiations; stages of negotiations. The model is understood as an aggregate of certain standards of behavior and mutual relationships which are taken as a ground for negotiations[8]. There are two fundamental models: negotiations-cooperation and negotiations-competition.

The purpose of the first model is the achievement of a compromise. Mutual concessions play the decisive role. Although the conception of cooperation has numerous positive properties, it is rather vulnerable. As American researchers note, concessions cannot be endless, and at one time or another one of the parties refuses to make them, and then the negotiations come to a deadlock[9].

The main purpose of the second model is the striving of the participants to regulate the dispute for their own benefit. The decisive role is played by psychological pressure based on aggressive behavior and accusatory stance. At the end it results in the situation when the opponent is intimidated, not sure in his/her stance and ready completely or partially give up the demands. At the same time, application of this conception may lead to the abuse of pressure. If the pressure gets too strong and lasts too long, then the “weak” party may refuse to negotiate and choose judicial proceedings.

Within the framework of a particular type of negotiations, the strategy of behavior determined. In juridical literature, the strategies are classified by various criteria, depending on their character and purposes of the parties[10].

Depending on the strategy character, there are the following types of strategies:

- attacking strategy (conducting negotiations in accordance with a party's own scenario, independent choice of means, methods, place and time of negotiations);

- defensive strategy (passiveness or evasion of coordinating certain issues and also counter-attack);

- direct strategy (direct and open conduct of negotiations without any concessions or contrivances);

- closed strategy (one of the parties does not recognize deviations from relevant conditions and time limits agreed for conducting the negotiations).

Depending on the purposes pursued by the parties in resolution of the conflict, the strategies are divided into the following types:

- anticipation of the most profitable offer (purpose: acquisition of the most profitable conditions in the resolution of the conflict);

- priority of mutual concessions (purposes: alternating provision and demand of concessions and also anticipation of the best moment for provision or demand of concessions);

- strategy of final offer (purposes: quick conclusion of a contract as withdrawal from the agreed stance may lead to conclusion of the contract on conditions non-profitable for one of the parties).

Е.I. Nosy'reva, studying the US experience with regard to the use of negotiations in of commercial dispute resolution, stresses two types of strategies: competitive and integrational, depending on the styles of behavior.

The essence of competitive strategy is in the fact that each participant focuses attention only on his/her problems and interests. The negotiations are conducted on the basis of mutual offers and concessions in the light of the necessity to resolve these problems and satisfy one's own interests. Resulting in a win-lose situation.

The idea of integrational strategy is in understanding disagreement in the dispute as a joint problem to be resolved jointly, taking into consideration mutual interests. In comparison thereof, the parties come to the understanding that there exists a stance in which one of the parties can cede and the other can accept.

The tactics of negotiations is an integral part of strategy and includes means and methods of activities applied to achieve the tasks at hand. There are aggressive, defensive tactics, and the tactics of silence.

In his dissertational study[11], А.А. Bry'zhinskij suggests, in order to achieve conciliation and agreements, applying the following tactical methods:

 - non-attacking the position of opponents;

- transforming an attack directed at oneself as a subject of conflict and negotiations into an attack directed at the problem);

- dividing the problem into separate elements;

- gradually increasing complexity; focusing attention on the interests, not on the stances;

- coordinating actions with partners; expressing agreement with the stated opinions and viewpoints of the other party;

 - searching for a joint zone of solution when the participants, after listening to the opinions of each other, try to find the points which make their stances closer;

- accepting offers of the other party when it does not count on it;

 --suspending the consideration of difficult problems in order to avoid deadlock in the course of negotiations and suspending their consideration until some more convenient time;

- elaborating an alternative to an agreement discussed;

- detecting tactical tricks (it is necessary to reveal the fact of using the tricks and discuss it directly with the other party which applies the said tactics),etc.

The study of strategies and tactics of negotiations can be classified as a separate direction of scientific research in sociology, and in this connection we shall come down to the next mentioned category.

The juridical community cannot come to a unified opinion as to the stages of negotiations process. However, due to the fact that there are a lot of approaches to this issue, we shall stress the one which in our opinion is the most feasible, in accordance with which the negotiation process is conditionally divided into two or three (depending on the results of negotiations) fundamental stages:

- analysing the situation and determining the stance in the dispute;

- resolving the differences per se (the stage of active discussion);

- taking decision, discussing and formalizing the achieved agreement.

The first stage includes two interconnected elements: analysing the situation and determining the stance. The purpose of analysis is familiarization with the stance of the counter-agent. The next step of the analysis is the statement of the party's own stance. The main purpose at this stage is not only to determine the stance, but also to set the limits inside which the free maneuvering is possible, taking into account the course of negotiations.

The second stage is the direct resolution of differences. It includes two fundamental elements: putting forward arguments and offering concessions. The concessions in negotiations are regarded as a fundamental means with the help of which the achievement of agreement is possible. At this stage, the parties shall finish negotiations, and one of them shall make a final offer. The other party may accept it, decline it or propose its own way of resolving the differences.

Depending on the results of the discussion, the negotiations either end in a deadlock and terminate at this stage or pass into the third culminating stage, when the last offer is accepted and the compromise is achieved.

Accepting the last offer means that the parties have achieved an agreement in general and can pass over to a more detailed discussion and formalization. Clarification of details is very important, as it may change the agreement for the benefit of one of the parties. In order to avoid disagreement, the details shall be discussed from the most simple and evident to the most complicated one. The final element of negotiations is formalization of the agreement.

Summarizing the above, one should note that at present, negotiations are the simplest and, in most cases, quite efficient method of achieving an agreement in resolution of disputes. The knowledge of aspects of negotiations procedures will allow the parties to coordinate their stances and find ways out of the conflict relationships.

Bibliography:

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