Referenda, First-Past-the-Post Parliamentary Democracy and the WATNA, BATNA and NATNA - a True Story

Recently I mediated with German and UK joint venture partners.  The German company had notified termination of the joint venture and the UK party wanted substantial compensation or ideally to cancel the termination and continue the joint venture.  (Sound familiar?!)  The German CEO flew in to negotiate, accompanied by internal and external lawyers, and with a limit of authority from the supervisory board.  The UK party accepted that withdrawal of the notice was not on offer from the German party, which was prepared to litigate if necessary to justify its termination, and instead compensation was agreed.  The compensation was at a higher level than the supervisory board had authorised, and therefore was subject to recommendation by the CEO and conditional on acceptance by the supervisory board, which was achieved a week or two after the mediation.

The most successful negotiators that I’ve observed have a clear Plan B, often risky litigation, in which they have a calm conviction and about which they demonstrate a realistic assessment (the WATNA and the BATNA*). They don’t posture and pretend to prefer Plan B to a negotiated settlement, but they do benchmark their own, and their opponents’, decision-making against the consequences of Plan B.  These negotiators also accept that a deal might not be achievable at the mediation, but trust in their decision-making not least because they have listened carefully to the counter-perspectives and processed what has been communicated during the process.  They have been assertive and open-minded.  Put another way, these negotiators recognise that they must try to avoid the lose-lose scenario, but also that this must be a shared endeavour.

And the “NATNA’?  Imagine if around half of the German party’s supervisory board had publicly declared in advance of the mediation that they would never support a "no-deal" termination, because of the costs and disruption of litigation.  In such a case the UK party would be confident that the other party had No Alternative To a Negotiated Agreement (NATNA) and it would be difficult to see how an agreed termination of the JV could have been achieved by the German negotiators other than on the opponents’ terms.

I have the utmost respect for all who voted in the Referendum, and for all MPs doing their best for their constituents and consciences, and a lot of sympathy for those trying to negotiate a termination with no more than a NATNA in their armoury.

*BATNA - Best Alternative To A Negotiated Agreement.  WATNA - Worst Alternative To A Negotiated Agreement.