Is Business Litigation Just Another Method of Negotiating?
Clearly, parties can elect to negotiate through the litigation process. It happens everyday. But why would any reasonable person elect to use litigation as a negotiation method? Litigation is clearly much more expensive than just sitting across the table and negotiating. The reason parties are litigating is usually because they are already in a relationship. There is either a contract existing between the parties, or some other business relationship that makes one party feel that it has lost something of value by the actions of another party.
I think it is simplistic to just take the position that litigation is just another form of negotiation. I agree that it is, but it is also much more than that. There is an excellent post on the, "Settle It Now Negotiations Blog" that discusses this very point. In negotiations, each party can control the results. Each party can agree or not agree with any proposal. Each party can control whether there is an agreement or not. But once a case is filed in a court, the rules change: the parties lose control of the schedule, and to some extent the cost of the negotiations. If the parties fail to negotiate a settlement, they also lose control of the result.
I recommend the article in the Settle It Now Blog. The suggestion is an excellent one if the parties otherwise trust each other (which is unlikely) and have a desire to continue a business relationship. But, as the old saying goes, "It never hurts to ask!" Sometimes there are surprising results.
Thanks for the mention! Unfortunately, some people have to be brought to the negotiation table at the point of a gun and that is certainly what litigation is -- a VERY EXPENSIVE gun. I recommend that parties negotiate a case management plan (even for the smallest cases) in which negotiation (without assistance of a third party) or mediation is built into the plan so that the parties are brought to the bargaining table on a sufficiently regular basis to stop the bleeding as early as possible. We litigators (for that is what I was for a quarter of a century) will always feel somewhat uncomfortable asking the other side to sit down for settlement negotiations during the course of the litigation because it might suggest weakness, at which point reactive devaluation (http://www.negotiationlawblog.com/2008/04/articles/settlement/the-role-of-specialized-settlement-counsel-by-jay-mccauley/) will kick in and damage one side or the other's bargaining advantage. Regularly scheduled negotiation sessions avoid this problem. Cheers! to you and your readers.