Originally from Alternatives to the High Cost of Litigation

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There are moments in bargaining most of us would like to avoid. One is when a party makes an offer, the other side labels it “insulting,” and the process grinds to a halt. 

Why do bargainers so often make such offers? And how should mediators and lawyers respond when they do?

“Insulting” offers are endemic to settlement negotiations. But in the legal context, “insulting” is a term of art. Bargainers don’t usually make extreme offers to humiliate opponents, and lawyers who complain about them are rarely actually insulted. In most cases making a tough offer, or labeling an opponent’s position insulting, is motivated by:

•     Tactics: “Anchoring” and signaling;

•     Strong emotions (“I spit on your demand!”);

•     Mis-evaluation of the legal case;

•     A poor bargaining decision;

•     Disagreement within a team