Opening offers can help make or break a deal. A reasonable opening offer can help achieve an 'anchoring effect', tilting the settlement in that party's favour.
However, an overly aggressive opening offer can significantly hinder the chances of settlement. As a mediator, I often find it helpful to try and explore that party's interests and bargaining strategies, by asking:
- How do you think that offer is likely to be received?
- How might you react to that offer if you were in the other party's shoes?
- Do you consider that your offer/demand will be sufficiently attractive to the other party to generate a reasonable counter offer?
- Whose interests do you consider would be best served by resolving the dispute along those lines, on in that range?
I have found that learning/discussing the motivations behind aggressive opening proposals helps that party consider their own bargaining strategies. This can help soften their opening demands, and make more reasonable opening offers.
The real drivers of settlement at mediation tend to be the need for finality and closure, the need to limit costs, a need to maintain dignity, a need for certainty of outcome, and a key way to achieve these is by the mutual recognition of the common interests of the Claimant and Defendant.
