Expect lots of negotiation or perhaps renegotiation in the post COVID-19 world. The global financial economy has suffered an unprecedented electric shock and no sector or industry will be immune from the requirement to negotiate strongly or perhaps renegotiate old agreements or deals for survival. Tough negotiations will occur between all parties such as landlords and tenants, lenders and borrowers (both domestic and commercial), employers and employees, vendors and purchasers, clients and suppliers, taxpayers and Revenue to name but a few.
Force majeure and material adverse clauses found in commercial contracts and M&A documents will be scrutinized by parties for compliance and, in some cases, legal contracts will be incapable of performance and legally frustrated. What will be the outcome? A dash to the Courts between commercial parties perhaps as the true impact of the economic recession bites and a desire for legal redress, a need to renegotiate a better deal and/or preserve a commercial relationship. Alternative dispute resolution methods such as arbitration and mediation are likely to be popular to fast track commercial disputes cost effectively.
With this in mind, let’s briefly examine the best negotiation literature available to identify what are the key basics to negotiate the best possible outcome for you and your business in these challenging times. I examine the seminal work of Ury & Fisher in their international bestseller, Getting to Yes, Robert Mnookin’s Bargaining with the Devil: When to Negotiate, When to Fight and the excellent work by Carl Voss, Never Split the Difference.
Getting to Yes is the seminal book on negotiation. Four key takeaways to achieve a principled negotiation are to (1) separate the problem from the person; (2) focus on interests, not positions; (3) invent multiple options for mutual gain; and (4) insist on objective not subjective criteria.
Mnookin’s Bargaining with the Devil: When to Negotiate and When to Fight is in effect the contemporary sequel to Getting to Yes. He analyses case studies from history such as William Churchill, and Nelson Mandela to identify a framework to decide whether to negotiate with an adversary who has caused you harm, someone you do not trust or whose behavior might be evil. Mnookin recommends using a Spock like emotionless and objective analysis which focuses on interests, alternatives, potential outcomes, costs, and prospects for implementation.
Finally, in Never Split the Difference Negotiating as if your life depended on it, former FBI hostage negotiator, Carl Voss, advises us not to accept win-win negotiations and to never split the difference. He gives us some really practical tools to apply in any high stakes negotiation such as labelling, the use of mirrors and by asking calibrated questions.
To recap, each Covid-19 related negotiation will, of course, be unique but the literature tells us that collaborative negotiation based on objectivity, focused on problems, not people, interests not positions, which develop multiple options capable of implementation and without the trap of emotion is the best path to achieve a mutually satisfactory outcome, even with the devil. Good luck!
If you need more information, please contact Ronan Hynes, Partner in Litigation and Dispute Resolution at Sellors by email at [email protected].