June 2013
Raphael Lapin



10940 WILSHIRE BOULEVARD, Suite 1600

Tel: 888-964-8884

Dear Clients and Friends




In  this June '13 edition of  NEGOTIATION STRATEGIES is a one-minute case study in which we provide some guidelines to help resolve disputes while avoiding litigation. We also distill the column into a brief lessons learned at the end for your convenience.


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Learn more About Lapin Negotiation Strategies  and ways in which we can make an impactful and substantive difference to your organization.


With very best wishes! 



Raphael Lapin

Avoiding Litigation in a Litigious Culture



In the United States, business is based  primarily on law, contracts, rules and regulations, and very secondarily on trust and relationships. In most other countries and cultures, business is based primarily on trust and relationships and secondarily, on law and contracts. For example, we are currently doing significant business in Europe with no signed contracts, just email memos between the parties. We trust each other and value that trust sufficiently that no one wants to risk losing it which is what contributes to the durability of the agreements and relationship.


In America, we put our trust in the judicial system abrogating  any need for personal relationships and trust. In describing the United States approach, Jonah Blank in Foreign Policy Magazine (June 3rd 2013) puts it well when he writes:  "Americans view a deal in coldly contractual terms: You give me this, I give you that in return, we shake hands and may never see each other again. Americans buy cars from complete strangers and refinance houses with banks that are bankrupt. This can be done because there is trust in the overall system: rule of law, functioning courts, policemen accountable to the public rather than the local warlord. The system gives Americans the confidence to entrust their credit card numbers to call centers staffed by prison inmates. (You didn't know that? Yes, it's true.)"


While  strong arguments could be made in favor of both the legal/contractual based system of commerce and the trust/relationship  based one,  the legal/contractual based system falls short however, and becomes costly, cumbersome and inefficient  when a dispute arises. In a trust/relationship based system of commerce, the parties are much more likely to work towards a mutually satisfying resolution by themselves or with the help of a mediator. In contrast, within a legal/contractual  based system, the parties will be quick to seek cold and clinical justice in a court of law. Besides the enormous expense, costs, stress and time consumption associated with a lawsuit, often a negotiated resolution meets the parties needs to a far more satisfying extent than what justice is able to serve.


Even in a legal/contractual based system, it is  prudent, sensible and practical to avoid litigation whenever possible. Following are some guidelines to  help achieve that.


It is easier for parties to talk about how they will resolve  disputes in the future should one arise, rather than attempting to resolve it once already embroiled in the emotions and acrimony of conflict.  Use the opportunity in the contracting phase of the relationship to agree on a dispute resolution process and incorporate that into the contract.


An effective dispute resolution clause usually involves a stepped up process. For example, the parties agree to attempt negotiation at the first manifestation of a dispute. If it is not resolved within 10 days, the parties agree to mediate with the help of a mutually acceptable mediator. If it is not resolved through mediation within 10 days, the parties agree to binding arbitration.


By including an effective dispute resolution clause in your contracts, you will be protected from costly, stressful, destructive and time consuming law suits.



Even in the event that the parties neglected to include a dispute resolution clause in the contract, it is still possible to avoid litigation. At the first sign of a clash, the parties should agree to talk about the process they wish to use to resolve the differences. Sometimes a limited scope mediation for the sole purpose of reaching agreement on the process is useful. This is usually more productive before lawyers are involved but can be achieved even afterwards also.


Identifying an agreed upon dispute resolution process can be quite creative too. Recently, I was facilitating a limited scope mediation (limited to agreement on a dispute resolution process only) between two business partners. One of them insisted upon a lawsuit because he felt he would be best served by justice that the court system offers, while the other preferred resolution through assisted negotiation or mediation. They eventually agreed on an innovative process where they would initially take it to non-binding arbitration, after which they would attempt to negotiate a resolution which both parties felt was  better then what the arbitrator ruled. If they were not able to find a mutually satisfying solution by the end of 30 days, that non-binding arbitration ruling would then become binding.



Once you have agreed to a non-adjudicated process to resolve your dispute such as negotiation or mediation, be prepared to negotiate the rules of the negotiation or mediation. Will the parties agree to put a moratorium  on any legal proceedings such as discovery, depositions and motions for the duration of the negotiations or mediation?  Who will be negotiating and how will decisions be made? Will agreements need to be authorized or ratified before commitment can occur and how will that be achieved? Will parties agree to spend time in the same room and have direct dialogue or would they prefer a shuttle diplomacy  mediation approach? 


The success of the negotiation or mediation will depend to a large extent on how it is initially set up. In addition to creating a productive negotiation environment, reaching agreement on these pre-negotiation issues sets a tone of agreement before the negotiations even begin and help to build the parties' trust in the process.  


As I write this column, the leaders of North Korea and South Korea are in talks about who will head each delegation for the upcoming negotiations over the reopening of the Kaesong joint industrial park on their border.  Other's might see this as procrastination, but I see this as proactive foresight and a great forecast for successful negotiations!

  • Appreciate how unattractive, costly, stressful and time-consuming litigation is
  • Design effective dispute resolution clauses and incorporate them in your contracts
  • In the absence of a dispute resolution clause, don't be afraid to engage the other parties in talks to reach agreement about the process you both wish to use to resolve the dispute
  • Think creatively about processes  or combinations that would meet all parties' concerns
  • Realize that the success of a negotiation or mediation depends on how it is set up initially
  • Negotiate the ground rules that all parties agree will help to advance productive and constructive talks

About1About Lapin Negotiation Strategies 


Lapin Negotiation Strategies offers training, consulting, advising and executive coaching in negotiation, business diplomacy and dispute resolution services.


Our proprietary and aggressively results oriented services are designed to help your leadership, teams and individuals master the essential negotiation, relationship-building and conflict management skills that increase revenues, decrease the high cost of conflict and build strong working relationships.

Our skilled specialists will:
  • Help your organization build a highly effective negotiation competency and culture which translates into increased revenue and strong business relationships.
  • Develop high impact, customized learning systems to develop advanced skills and powerful techniques in negotiation, dispute resolution and relationship management.
  • Provide advice, strategy, guidance and representation in live negotiation challenges
  • Facilitate, mediate and advise in dispute resolution
  • Create a culture of collaboration by guiding and training teams and divisions to engage in dialogue, to negotiate and to partner
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Raphael Lapin

Raphael Lapin, a Harvard trained negotiation and communication specialist. He is adjunct professor of law at Whittier School of Law in Southern California and visiting professor at Southwestern Law School in Los Angeles. Raphael trains and advises Fortune 500 companies and governments around the world and is the author of "Working with Difficult People" (DK Penguin Essential Managers Series)
Working with Difficult People
 Learn more about Raphael Lapin's book, "Working with Difficult People" by clicking on the image above