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Still More Hard Bargaining Tactics

July 29, 2013 at 2:07 PM

The three previous articles in this series for NZLawyer have each described 10 hard- nosed negotiation tactics: "Hard bargaining tactics ... and how to deal with them them", issue 128, 22 January 2010; "More hard bargaining tactics", issue 188, 13 July 2012; and "Yet more hard bargaining tactics", issue 189, 27 July 2012.

The 10 further tactics described below involve a heavy dose of pretence and deception. I am not necessarily advocating their use. As mentioned in my previous articles, the use of tactics should have regard to considerations of ethics and personal style. However, knowledge of the tactics enables defence against their use.

1. Representative cloak

The representative cloak tactic involves the negotiator making out that he or she is personally supportive of the other party's position, but is hamstrung by the instructions of his or her absent principal, who is declared to be hostile to that position. For example:

"I would love to say yes to your proposal, which seems perfectly reasonable to me, but unfortunately my boss won't agree."

In this way, by asserting an absence of authority to settle on particular terms, the negotiator is protected from difficult demands.

2. Phantom player

Phantom players are absent persons declared by the tactical party to have information and views about the negotiations, which are at odds with the position of the targeted party. These people, either fictitious or real, are unable to be challenged by

the targeted party, given their absence. For example:

"We have spoken to an expert who tells us that the problem could not possibly have occurred in the way you suggest."

"The other members of the family do not agree with your claim."

"I have spoken with a lawyer who says your understanding of the law is incorrect."

3. Disguising opinion as fact

A party which uses the previously mentioned tactic may well also use this one. It involves
the tactical party making statements as if they were accepted facts, when, in reality, they are unsubstantiated conjecture or false assertions. This tactic plays on the genuine difficulty we have in distinguishing fact from opinion, and our tendency to believe things said with apparent sincerity and authority. Examples could include:

"House prices increased by three per cent during the last quarter."

"Ours is the only such product on the market."

"The Government has decided against the proposal."

"Treasury expects interest rates to remain steady."

Are these statements fact, opinion, or falsehoods? It may be hard to tell within the context of a negotiation.

4. Feinting

Not to be confused with the tactic of fainting
in response to a derisory offer, feinting involves deception in order to conceal true intentions and objectives. This is achieved by the tactical party taking the negotiations in a direction at odds with its true goal, thus misleading the targeted party as to that goal.

For example, in relationship property negotiations, the tactical party might seek occupancy of the family home when in fact he or she is happy for it to be sold, in the hope that the targeted party who wants the house sold will make concessions on the value of the family business.

The reason for the feint in the example just given is in order to apply leverage. But there can be many other reasons why parties might want to mislead
as to their true objectives. They may wish to stop a party perversely depriving them of what they seek. They may be seeking to manipulate public opinion. It may be a delaying tactic. It may be to cause confusion and consternation. It may be for complex strategic reasons having regard to wider considerations.

5. Red herring

Here the tactical party introduces an irrelevant
or false, yet highly distracting, issue into the negotiations, in order to unsettle the other party and put him or her on the defensive. For example:

"We need to discuss your possible criminal liability under the Commerce Act 1986."

"Before we discuss the rent renewal, we want to know why your security staff blocked access to the building by our CEO's spouse."

"I cannot agree to child support unless you satisfactorily explain why our child was sent home from school."

6. Linkage

Whereas the previously mentioned tactic involves the introduction of irrelevancies, this tactic involves the legitimate widening of the issues under negotiation in order to increase leverage over the targeted party. If a tactical party has relatively

poor bargaining strength on some issues but good bargaining strength on others, that party ensures that the latter are included in the negotiations and bound up with the former issues. For example:

"We will not settle relationship property issues in isolation from spousal maintenance issues."

"We are not prepared to discuss overtime rates without also discussing holiday pay."

"Your complaint about quality cannot be addressed without consideration of pricing."

7. Trial balloon

This tactic involves a party floating an idea, rather than making a firm assertion. It has at least three benefits. It enables an idea to be tested without the tactical party being tainted by it if rejected. It can be used to conceal a preferred option. And it can evoke other ideas or information.

For example, in an employee poor performance case: "This is not a proposal, but we are just wondering whether your resignation might be
an option if a compensation package could be worked out." Here, the employer avoids the risk

of aggravating the employee and of constructive dismissal allegations if such an approach is unacceptable. Further, the employer has avoided revealing that its preferred option is for the employee to resign. Finally, the employee might disclose another option, such as continued employment until departure overseas.

8. 'Predicting' a favourable offer

Before the targeted party has had the chance of making an offer, the tactical party declares what it anticipates that offer will be. The 'prediction' is always favourable to itself, for example:

"We are claiming $600,000, and so we expect that you will be offering us no less than $550,000 to settle."

When an offer is made, the targeted party will find it more difficult to argue that its offer is a generous one. A subtle benchmark has been put in place by the tactical party by which the settlement quantum is to be judged.

The tactic is also a means of inducing the targeted party to make the first offer. If in response to a 'prediction' the targeted party declares it has no intention of offering at that level, the tactical party may well ask, "Well,
what level are you proposing?". If the question is answered, then the tactical party has achieved this information without having disclosed its own hand.

9. 'Failing' to understand

The tactic of wilful ignorance serves a number of purposes.

It blunts the impact of the target party's good arguments to which the tactical party has no real answer. For example:

"I'm sorry, but I simply cannot follow that argument."

"Really, that is all too complicated for me to understand."

"This stuff is way over my head, I'm afraid."

The apparent failure to score expected points can deplete the targeted party's energy and optimism. It can become frustrated and at a loss as to how to get through to the tactical party.

It may even begin to doubt the validity of its arguments.

The tactic may also be used to draw out the negotiations by giving rise to repeated and lengthy efforts to explain points which appear not to have been understood (but which in fact have been).

A danger for the targeted party is to underestimate the true guile and wit of the tactical party.

10. Appearing irrational

This tactic is similar in approach but distinct from the previously mentioned tactic. It involves the tactical party seemingly not knowing what is good for itself, and hence not being amenable to sensible persuasion. This forces the target party
to make concessions out of despair which it would not otherwise have agreed to.

This is because effective negotiation is usually predicated on all parties being able to apply logic and make judgement calls in their own interests. It is very difficult to contend with a party who says: "You have persuaded us that if this goes to court we could well lose disastrously, but we want to go anyway".

The tactic is most effective when the level of irrationality projected is subtle rather than gross. The former is more believable than the latter, and so the targeted party is less likely to realise that the tactic is being deployed.

Nigel Dunlop is an Auckland barrister who has mediated over 500 disputes of all descriptions throughout New Zealand, involving more than 2,500 hours of mediation, achieving a documented 93 per cent settlement rate. For more information, and to read the previous

articles in this series, see Articles and Presentations at www.nigeldunlop.co.nz or Archives at www.nzlawyermagazine.co.nz.

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Category: Negotiation