‘Avoid deals where the other side does not demon­strate com­mit­ment’

Yorkshire Post - Business - - FRONT PAGE - Rashmi Dubé

There are many books that have been writ­ten on the art of nega­tions (few out­side the le­gal world on the un­der­stand­ing of when to use “with­out prej­u­dice”).

The books that have been pop­u­lar are Get­ting to Yes: Ne­go­ti­at­ing Agree­ment With­out Giv­ing In by Roger Fisher and Wil­liam L. Ury or Never Split the Dif­fer­ence: Ne­go­ti­at­ing As If Your Life De­pended On It by Chris Voss

with Tahl Raz.

There are many styles and guides but at the end of the day you have to be armed with the perime­ters of nega­tions and un­der­stand if you are the weak­est link. So when do nega­tions ac­tu­ally be­gin?

Par­ties can dis­cuss, for an ex­am­ple, an agree­ment and if both par­ties agree, you have an agree­ment/con­tract. At no point has there been a ne­go­ti­a­tion. That is to say that each party ac­cepted what the other has sug­gested/ of­fered.

A ne­go­ti­a­tion starts when one party says “No”. No should not be viewed as a re­jec­tion, but as an op­por­tu­nity to dis­cuss and ne­go­ti­ate terms.

I am not of the opin­ion that your only po­si­tion is how to get to yes for the ques­tion/deal that you seek. What can hap­pen in ne­go­ti­a­tions is that some­times you find a dif­fer­ent deal, and some­times a bet­ter deal through nega­tions. This also does not ne­c­es­sar­ily in­volve com­prise.

Ne­go­ti­a­tions are part of the ev­ery­day life of a busi­ness from ne­go­ti­at­ing your new terms of lease on a prop­erty to a new man­u­fac­tur­ing agree­ment.

The im­por­tant stages of any nega­tions are –

Pre­pare: En­sure you are clear on what you re­ally want out of the ar­range­ment. Re­search the other side to bet­ter un­der­stand their needs. Fo­cus as well on their strengths and weak­nesses. En­list help from ex­perts, such as an ac­coun­tant or solic­i­tor in your prepa­ra­tion so you are armed with ar­gu­ments or de­tails as to why you seek what you do.

For ex­am­ple, if you were in talks about merg­ing, speak to your ac­coun­tant in terms of your fig­ures and en­sure you un­der­stand why you are seek­ing a set fi­nan­cial amount. Equally, speak to your solic­i­tor be­fore the meet­ing as they will be able to ad­vise you on what type of struc­ture in terms of the com­pany or share­hold­ing, you should be look­ing at upon a merger.

If you don’t ask, you don’t get. I am a firm believer in al­ways ask­ing for what you want. The worse that can hap­pen is they say no and then you can be­gin your nega­tions. Al­ways have some­one with you that will ask for the moon and be­yond. When we ne­go­ti­ate for our­selves we some­times tend to worry about los­ing the deal and there­fore ask for less!

Of­fer and ex­pect com­mit­ment. The only thing that will keep the deal to­gether is your abil­ity to en­sure you de­liver. Equally, avoid deals where the other side does not demon­strate com­mit­ment. If your in­stincts are telling you to walk away – Walk Away!

Ob­sta­cles: The other party will al­ways have a rea­son why they can­not do some­thing. Deal with th­ese head on and solve them where pos­si­ble.

Con­fi­den­tial: Al­ways con­sider if you want to carry out any nega­tions on a con­fi­den­tial ba­sis.

Some­times dur­ing the nega­tions, the phrase “with­out prej­u­dice” is used. This phrase tends to be used (but not al­ways) when par­ties have a fall­ing out and are at­tempt­ing a set­tle­ment of a dis­pute.

Through­out my 20 odd years in the le­gal pro­fes­sion and 10 years in the busi­ness world, this is by far the most com­mon mis­un­der­stood phrase and most in­cor­rectly used phrase dur­ing nega­tions.

What I have found is that peo­ple use it be­liev­ing that if you head up a piece of com­mu­ni­ca­tion with the phrase “with­out prej­u­dice” then the com­mu­ni­ca­tion can­not be re­lied upon. This is not ne­c­es­sar­ily the case. The with­out prej­u­dice rule – in gen­eral terms.

The rule gen­er­ally is, if you are in a dis­pute and are mak­ing state­ments in terms of nega­tions and are mak­ing a gen­uine at­tempt to set­tle a dis­pute, then that state­ment or state­ments are pre­vented from be­ing put be­fore the court as ev­i­dence against the party that made them. The im­por­tant points to note are that the state­ment must be:

An at­tempt to re­solve the said dis­pute; and

A gen­uine at­tempt at res­o­lu­tion. Why have the phrase With­out Prej­u­dice? Surely any party should be able to rely upon what an­other party says? The think­ing be­hind this rule is to en­cour­age par­ties to at­tempt early set­tle­ment.

In the cur­rent cli­mate where the courts are en­cour­ag­ing al­ter­na­tive res­o­lu­tion, then it can save go­ing down the court process.

So when do I use it? You can mark com­mu­ni­ca­tion as “with­out prej­u­dice”

when ne­go­ti­at­ing a deal or res­o­lu­tion of a dis­pute. This is not to say all com­mu­ni­ca­tions are to be marked with­out prej­u­dice, it has to con­tain in­for­ma­tion that is di­rectly re­lated to the nega­tions in hand.

For ex­am­ple, if you were at­tempt­ing to set­tle a dis­pute con­cern­ing late de­liv­ery of a con­sign­ment where you are due to make a pay­ment of £10,000.00 you may write to the sup­plier on a “with­out prej­u­dice” ba­sis of­fer­ing £8,000.00, but do an open let­ter ( a let­ter that is NOT marked with­out prej­u­dice) ex­plain­ing the late de­liv­ery and the is­sues this caused and any costs as a re­sult.

The of­fer of the £8,000.00 is part of your nega­tions to re­solve the mat­ter while the open let­ter is stat­ing what the is­sues are. What does the court have to con­sider in de­cid­ing whether com­mu­ni­ca­tion is ac­tu­ally made on a “with­out prej­u­dice” ba­sis?

The cir­cum­stances in which the com­mu­ni­ca­tion was made;

What was in­tended by the party who sent the com­mu­ni­ca­tion; and

What was be­lieved by the re­ceiv­ing party.

La­belling com­mu­ni­ca­tion “with­out prej­u­dice” will not au­to­mat­i­cally lead the com­mu­ni­ca­tion to be deemed as with­out prej­u­dice. Equally, by not us­ing the phrase, the doc­u­ment will not au­to­mat­i­cally be ad­mis­si­ble.

The po­si­tion is far from be­ing clear cut.

There­fore, in a dis­pute, at­tempts to set­tle in a gen­uine man­ner need to be clear to en­sure that the com­mu­ni­ca­tion is with­out prej­u­dice.

So, in terms of busi­ness ne­go­ti­a­tions – be pre­pared, seek ad­vice, deal with any ob­sta­cles, be com­mit­ted and re­mem­ber it is not all on a “with­out prej­u­dice” ba­sis.

Ne­go­ti­a­tions are part of the ev­ery­day life of a busi­ness.


MEET­ING OF MINDS:When we ne­go­ti­ate for our­selves we some­times tend to worry about los­ing the deal and there­fore ask for less.

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