Negotiation is the process of concluding a deal, where the parties have conflicting interests, but wish to have a discussion in the intention of reaching agreement.
Negotiation can take many forms including informal discussions between commercial representatives, discussions between lawyers or may be more formal, such as the more 'structured' process of Mediation in which a third party facilitator is involved.

A useful negotiation (ie one which either concludes a deal, or one which significantly progresses a matter) can (fairly obviously) only start when both parties agree to negotiate. The role of the Commercial Dispute Resolution team is to try to place our clients in a position of strength in order to begin the negotiation process, even if their case has weak elements to it.

Drawing from our significant expertise in this area, we would hope to establish a position where a positive outcome for both sides is more likely, firstly by attempting to persuade your opponent that negotiating is a worthwhile exercise, and then by highlighting your strengths.

Understanding the business arena within which you operate, and advising you on the practicalities of settling are all part of this process.

There are various stages to a negotiation and several negotiation strategies available.

Preparation.
This includes a detailed analysis of the strengths and weaknesses of your position and that of your opponent based on the information available. The range of possible outcomes and the best alternative to a negotiated agreement need to be identified at the earliest stage so that the negotiation can progress from an informed perspective. It is very important, before embarking on negotiation, to identify whether there are any issues that would be "deal breakers".

Establish communication with the other side (including the legal team).

Identify common goals and interests, and agree an agenda and a timetable for the negotiation.

Explore the positions of both sides. Is it possible to obtain a "win-win" outcome? Negotiation, in the context of dispute resolution, should aim to leave both parties genuinely better off than the alternatives would, since it is more difficult to resolve a dispute without resorting to litigation if either party feels hard done by at the end.

It is important to identify why the other side wants to negotiate. What is their best alternative to a negotiated settlement? Do they want to settle more than you do?
The parties' negotiating styles can seriously affect the outcome of any discussion. An aggressive negotiator will not give a great deal to conclude a negotiation and runs the risk of alienating the other side and leaving empty handed. A collaborative negotiator runs the risk of giving too much away and not obtaining the best deal available. The most effective style, generally, is that of a principled negotiator. That involves concentrating on the merits of any argument, searching for the answers to problems and methods of solving them rather than bargaining. Principled negotiators are unlikely to employ tricks or posturing, the aim is to reach a reasonable settlement rather than the best at any price.

Closure.
It is important to conclude a negotiation by documenting what has been agreed and what, if anything, remains outstanding.

The nature of a negotiation means that you will have to give away some aspects of your position. It is not a sign of weakness to recognise that in dispute resolution an early negotiated settlement is likely to be cheaper, less time intensive and therefore preferable to recourse to the other forms of dispute resolution process. If proper preparation has been done, it will become clear relatively quickly whether a dispute is capable of reasonable settlement by negotiation. If it is not, the best alternative will have been identified.