In procedural terms, negotiation remain one of the most flexible form of dispute resolution. It involves only parties with an interest in the matter and/or their representatives. Parties are free to shape negotiations in accordance with their own needs and by ensuring that all those having an interest in the dispute have been consulted regarding their willingness to participate, the chances of reaching satisfactory agreements are enhanced.
Being a voluntary process, participation is purely based on party’s willingness to join in the negotiation.
Like any ADR method of dispute resolution, negotiation cannot guarantee any party’s success. However, possibility of a successful outcome and the chance of reaching an agreement that meets the needs of the parties, are more enhanced when parties focus on theirmutual needs and interests (Typically referred to as “win-win” approach).
Having recourse to a Third Party neutral, is not mandatory, especially if parties do not want to involve outside parties in the process, or the dispute is highly sensitive in nature.
Outcomes of a negotiation bind only parties who were involved in the negotiation.
Assuming that the parties are negotiating in good faith, negotiation will provide the parties with the opportunity to design an agreement which reflects their interests.
Negotiations may preserve and, in some cases, even enhance the relationship between the parties, once an agreement has been reached between them.
Opting for negotiation instead of litigation may be less expensive for the parties and may reduce delays.
Disadvantages
The absence of an impartial third party may result in parties being incapable of defining the issues at stake, hence not being able to reach an agreement.
The absence of a neutral third party may influence one party to take advantage of the other party, especially if the other party is not aware of its limit of authority in the process.
In the event a party is not aware of its negotiating mandate and authority, that party may not be able to participate effectively in the bargaining process.
The negotiation process cannot guarantee the good faith or trustworthiness of any of the parties.
Since negotiation is purely voluntary, any party may opt to terminate negotiations at any time in the process, notwithstanding the resources invested by the other party, such as time, effort and money.
Negotiation may be used as a delaying tactic to prevent another party from asserting its rights, such as through litigation or arbitration.