Negotiation and Access to Information

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Negotiation and Access to Information

The general consensus is that people do not like conflict and thus conflict resolution is “hard” because of this distaste.   The “This is my financial answer on offers” is the beginning to the process of real negotiation.  Often with regulators, counterparties to information, and or due diligence gaining access to the required information is a negotiation and it is not a right.

I believe this is nearly always the case, i.e., that when the parties are near impasse, the true negotiation begins. We see this quite often when parties advise the mediator that they have made their last and best offer, only to change the offer with more time. I also believe that mediation is part of the overall dispute resolution process – though an impasse may be reached during the formal mediation session, the seeds of settlement have been planted and more often than not, the case still settles notwithstanding the formal impasse.  Never more intense have these session become than with counterparties to information require to be incompliance and to conduct one’s due diligence.  One needs – must have – access to the information counterparty possess.

Isn’t this just playing with words? Of course there comes a time when one comes to the end of overtures and turns to the main opus as theses are overtures TO negotiation not overtures OF negotiation?  Either way overtures play their part in creating the ground for the serious negotiation that follows.

Often it can be a tactical feint to choose an impasse early on either to negotiation or in negotiation.

Also while many do try to avoid conflict, I work with many that seek conflict to engineer the results of the conflict to their benefit. These people do a very careful benefits analysis of the conflict and choose to foment the conflict if the odds, as they calculate them, show them as a winner.

The job of a mediator is to have been sufficiently diligent student not only of the issues but also of the parties to be able to anticipate and be prepared for such a feint, or calculated conflict.

Not all wish to reach a settlement.

In negotiation we are often left with an image implying that the impasse to be encountered will be reached through a process where the impasse is not fully known to parties to the process at the onset of negotiations.  Having put forward, poorly, that sometimes the impasse is a predesigned by a party, engineered to foment dissent and conflict, that mediators should be prepared yet often are not prepared for just such a scenario.  Mediators should also be prepared to act and know if the impasse is an acceptance or a rejection before we reach the impasse, thus we to not stall in their obligations of the process of negotiating access.

I see “engineered conflict” battles between rivals in industries with narrow margins, where the cost of conflict, can severally damage a rivals margins and thus its competitiveness.  These battles are not fought straight up but thought proxy warriors, NGO, Non-Profits, small disposable companies, and the like, that are obliquely funded by the target’s competitor.  The mandatory arbitration process is a chance to pre-try the facts and ratchet up expenses for the target and allows the opportunity for potential reputational damage to the target as well.  Look at the damage other banks have done to competitors with little things such as information stripping off of wires, faulty counter party due diligence, or intentionally misleading another bank on the nature of a customer.

This is a cautionary article to remind our readers in finance to plan for access to information and plan for the tactics and strategy of the negotiations as what all many wish to have shared may not be for the stated purpose.

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