May 2025
Battle of the BATNAs
05/05/25 14:22
When negotiating you are unlikely to have an overt battle of the competing BATNAs - every side generally choosing to keep their BATNAs (best alternatives to negotiated agreement) to themselves.
According to the Harvard PON:-
The following do’s and don’ts will help you manage information about your BATNA with confidence.
The fact, however, that BATNAs may not be discussed openly does not mean that useful communication relevant to BATNA cannot take place.
In a dispute that is litigated or likely to be litigated, the BATNA may involve the continuation, or commencement of, litigation. Relevant to each side’s BATNA will be the perceived costs and potential benefits of going forward.
I usually encourage the parties the share information about perceived costs. When will the dispute come on for hearing? How long is the hearing likely to take? What costs are likely to be incurred? Is there any risk that there could be a mixed outcome on costs? What recovery rate is there likely to be if a costs order is made?
Often the parties will have different views about these matters, but the communication opens up potential for discussion and/or consideration of different ways any litigation may track and the costs consequences that may reasonably follow.
I do not recall any occasion when the parties have spontaneously had this kind of discussion - and yet it is one way to start to work out how comfortable a party should be with their own BATNA as well as how other parties may be reflecting on theirs. It provides an opportunity for re-assessment or at least re-consideration.
Ofcourse other discussions relevant to BATNA are also useful. Does the delay in resolution matter - for cashflow or other reasons? What resources will be employed in pursuit of the litigation and with what consequences? Will there be any opportunity loss as a result? Is there any and what reputational risk? Is there any and what relationship risk? What negotiated outcome might be offered that could not be realised even if the litigation was successful?
And ofcourse understanding the extent of uncertainty about the outcome in any litigation (the risk of going forward) can often be key to decisions made about settlement. What alternative views can reasonably be held about risk?
Fundamentally, the point I am trying to make is that mediation joint sessions should be seen as a time for information sharing/gathering - not just as an opportunity to persuade, let alone advocate. It’s a good time to work on your own BATNA and to try to understand what the other party’s BATNA could be and what you might be able to say that could influence it.
According to the Harvard PON:-
The following do’s and don’ts will help you manage information about your BATNA with confidence.
- Never share your BATNA with the other party if it is hopelessly weak.
- If the other side asks you about your BATNA directly, explain (truthfully) that you are working on various possibilities but want to concentrate on the deal on the table for the time being.
- Even if you’re certain your BATNA is rock solid, hold off on revealing it. It could prove to be a useful bargaining chip during the final stages of a negotiation after you’ve exhausted all other strategies.
- Don’t be surprised if your counterpart disparages your BATNA. Recognize that he has very real incentives to convince you that your outside options are not as good as you’d like to believe.
The fact, however, that BATNAs may not be discussed openly does not mean that useful communication relevant to BATNA cannot take place.
In a dispute that is litigated or likely to be litigated, the BATNA may involve the continuation, or commencement of, litigation. Relevant to each side’s BATNA will be the perceived costs and potential benefits of going forward.
I usually encourage the parties the share information about perceived costs. When will the dispute come on for hearing? How long is the hearing likely to take? What costs are likely to be incurred? Is there any risk that there could be a mixed outcome on costs? What recovery rate is there likely to be if a costs order is made?
Often the parties will have different views about these matters, but the communication opens up potential for discussion and/or consideration of different ways any litigation may track and the costs consequences that may reasonably follow.
I do not recall any occasion when the parties have spontaneously had this kind of discussion - and yet it is one way to start to work out how comfortable a party should be with their own BATNA as well as how other parties may be reflecting on theirs. It provides an opportunity for re-assessment or at least re-consideration.
Ofcourse other discussions relevant to BATNA are also useful. Does the delay in resolution matter - for cashflow or other reasons? What resources will be employed in pursuit of the litigation and with what consequences? Will there be any opportunity loss as a result? Is there any and what reputational risk? Is there any and what relationship risk? What negotiated outcome might be offered that could not be realised even if the litigation was successful?
And ofcourse understanding the extent of uncertainty about the outcome in any litigation (the risk of going forward) can often be key to decisions made about settlement. What alternative views can reasonably be held about risk?
Fundamentally, the point I am trying to make is that mediation joint sessions should be seen as a time for information sharing/gathering - not just as an opportunity to persuade, let alone advocate. It’s a good time to work on your own BATNA and to try to understand what the other party’s BATNA could be and what you might be able to say that could influence it.
