Grieving Over Settlement: The Role of Loss in Settlement Negotiations

Abstract

The development of negotiation theory and growth of mediation has greatly improved, in fact transformed, how disputes are resolved in America and, increasingly, around the world. Yet in emphasizing so strongly the creative potential of these techniques we have obscured an equally important reality—that in even the best settlement negotiations many, perhaps most, parties must deal with significant feelings of loss.

The perception of disputants that they are losing as they bargain is important for several reasons: Emotions stimulated by loss have a special intensity and often appear without warning, at times when the bargaining process is most vulnerable. The behaviors provoked by these feelings resemble tactics used by adversarial bargainers, magnifying their disruptive impact. Finally, for some disputants their case takes on a significance that makes them reluctant to resolve it on any terms. Disputants’ struggles with perceptions of loss, and the feelings and behaviors they stimulate, are a primary reason that settlement negotiations fail.

This article explores the following issues: What causes parties to feel they are losing as they negotiate? What emotions does this experience provoke, and how do they affect bargaining behavior? And what strategies can mediators use to deal with these feelings and behaviors and assist parties to settle?