Litigation Risk Management Institute

Litigation Risk Management & Settlement Valuation

The model is based on the assumption that each participant in the negotiation does what is in his or her expected best self-interest.

It starts by calculating how each participant regards all of the other participants in the negotiation and evaluates their relative strengths, taking into account the coalitions that each stakeholder likely has. The model develops an assessment of how each of the other participants would react to a proposal from a particular participant, how likely they would be to accede, compromise, or resist a proposal. The model calculates all the proposals that each participant would make to each of the other participants.

Each participant then chooses the best proposal in his or her interest, or the one that they cannot refuse, and the model then calculates the resulting new positions and uses these as a starting point for the next round. It not only shows whether or not there is a negotiated solution acceptable to all, or all those necessary to make it happen, but how each individual changes position round by round.

In addition, it indicates what proposals were not made that could have been and then tracks how that would change the negotiated outcome, what we call Missed Opportunities.

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