Dispute Resolution I Strategies for Successful Outcomes

29 March 2026 in Dispute Resolution Law | 6 min read | skip to FAQs

Alternate dispute resolution is the practice of settling disagreements prior to court litigation, avoiding the risk of unnecessary cost and time involved with some litigation matters. The process gives clients greater control of the negotiation process and the outcome achieved in any negotiated settlement. This article focuses on settlement strategies in the alternative dispute resolution context, providing insight into preparation, processes and negotiation methods.

Each resolution is characterised by the unique circumstances of each dispute, the parties involved and the underlying interests and objectives of each party. We also look at the practical reality of managing people’s perceptions, emotions, and bargaining behaviours throughout negotiations and provides clear alternate dispute resolution strategies that lead to resolutions.

Preparing For Settlement Discussions

Most disputes begin and end at the negotiation stage. Good faith negotiation can resolve misunderstandings if the communication is clear, forthright, respectful and outcome focused. However, effective and practical negotiation is only possible with thorough preparation and a sound understanding of each party’s legal rights and position.

Conscientious preparation is crucial for achieving a favourable outcome. Taking the time to gather relevant documents, identify priorities, understand potential risks, identify the strengths and weaknesses of each party’s case and understand each party’s legal position helps to define a client’s negotiating strategy, and provides a solid foundation to launch negotiations.

Identification of Points of Contention

The first step in preparation is identifying key points of contention within the dispute and factual matrix. This involves a careful and meticulous analysis of the situation to develop a clear and purposive understanding of the factual background.

Determination of Clients Objective

The next step is clearly determining the client’s objective, which includes the minimum acceptable outcome. A thorough understanding of the client’s legal position will assist in determining the worst case outcome that may be acceptable in any negotiation.  It is standard practice to identify the ‘best alternative to a negotiated agreement’ (BATNA) and the ‘worst alternative to a negotiated agreement’ (WATNA). These benchmarks help anchor the client’s position throughout the negotiation process, managing expectations and guiding decision-making when evaluating or making offers and proposals. Importantly, this framework also assists in determining whether to continue negotiations or implement an alternate strategy such as formal mediation, conciliation, arbitration, expert determination or litigation.

Fact Gathering

Throughout the negotiation process, it is important that all relevant facts are known and understood. Thorough preparation helps to avoid common pitfalls such as unwelcome surprises and unnecessary departures from the path to resolution. It is favourable to obtain some form of substantiation of the key facts or claims that are foundational to the position. This involves fact gathering, which requires the collection of relevant evidence and a thorough analysis of the evidence. The subsequent organisation of this evidence is vital to support any claims made or to clarify any facts in dispute.

An Unpredictable Variable: Stated Positions and Underlying Interests

Problem-solving throughout the dispute resolution process often turns on the many variables that are subject to volatility. Some variables are difficult to predict and quantify, requiring ad-hoc problem identification and solving skills. Other variables are more stable, and can be controlled more readily, for example, the facts of the case and case analysis.

The most unpredictable variable is ultimately the people involved in the dispute. The underlying interests of each party may not always be known or understood, as parties seemingly can appear uncompromising or unreasonable in their pursuits and may have objectives that have not been previously expressed or are inconsistent with their legal case. Involving a lawyer early in the process assists to set a framework for the dispute and the parameters of each party’s legal position.

The goal is to achieve the objective of the client, this is usually best achieved by also understanding the objectives of the other parties and seeking resolutions that will provide an incentive for each other party to agree to a resolution that satisfies the client’s objectives. However, it is not always the case that each party understands their objectives, especially if they do not have full knowledge of their legal position. It is important to identify such underlying interests and explain such interests in the context of that party’s legal position. This process of identifying underlying objectives should be thorough and meticulous in order to gain a clear definition of the client’s and each other party’s stated position.

To mitigate any form of miscommunication, a lawyer employs essential skills like interviewing, listening, questioning and observing. Effective implementation of such skills must take place before and throughout the legal analysis of the case and the development of the negotiating strategy.

Practical Realities in Conflict Management

It is a practical reality that alternative dispute resolution involves the management of people’s perceptions, emotions and bargaining behaviours, which are ultimately informed by a multitude of factors beyond the strength of the party’s legal case, including culture, personality, perceptions of justice, financial considerations, interpersonal relations  and more.

Components in Conflict

Theorists have noted three vital components to be aware of in any conflict:

1. Interests: the things that motivate people including desires, roles, responsibilities, status etc
2. Emotions: feelings which form a part of all human interaction
3. Values: deeply embedded beliefs that govern people’s behaviour and attitudes towards others

These three components act as an undercurrent in all alternative dispute resolution matters. These components must be managed to be able to reach a resolution of the legal dispute. Lawyers must effectively navigate through these forces to arrive at a favourable outcome for the client and the other parties. This usually involves creating solutions that address some or all of each party’s objectives and needs.

Ambit Claims

An ambit claim is an initial, often exaggerated or imposing demand made in negotiations or litigation, intended to set a high starting point for compromise or to seek an outcome with little alternative. Ambit claims may stall negotiations and offer little realistic chance of success. While it is standard practice to avoid proposing a bottom line offer first, an incremental approach is usually more productive than the use of ambit claims, depending on the strategy and the strengths of each party’s position.

High/Low Opening Offers

Like ambit claims, high/low opening offers are a common and controversial tactic that involve setting an initial offer significantly higher or lower than one is willing to accept, rather than starting with a more moderate offer. While this tactic may sometimes be effective, its success is not guaranteed. In one respect, it may open the door to a dynamic negotiation process where both sides are actively engaged in seeking a resolution. However, it risks impasse, escalation of the dispute and erosion of trust. A reasonable, accommodating solution is better than no solution at all for most parties, and it is a common pitfall to let rigidity get in the way of resolution.

Bargaining behaviours such as ambit claims or high opening offers can agitate negotiations, but with a strong foundational position and a management strategy, risks can be mitigated, and a strong outcome can become achievable.

There are a multitude of different approaches to negotiation, and these strategies underpin the alternative dispute resolution process. The approach to initial offers and counteroffers can work to gain favourable outcomes, and the process should be handled with precision, openness and transparency.

Key Takeaways

In general a negotiated settlement is preferable to litigation. A negotiated settlement allows the parties to retain greater control of the dispute resolution process and usually saves time and cost compared to litigation. However, negotiation requires thorough preparation including a comprehensive understanding of each party’s legal position and the strengths and weaknesses of each party’s position. This includes identification of points of contention, determination of the clients’ objective and careful fact gathering. Understanding and management of the human factors is also essential, including the stated positions and underlying interests.

How can BSM Sydney Lawyers assist you?

The dispute resolution lawyers at Brander Smith McKnight Sydney Lawyers have a wealth of knowledge and experience in developing and implementing negotiation and resolution strategies in complex disputes. Our lawyers have experience in resolving a wide range of legal conflicts including building and construction, banking and finance, property disputes, supply and international trade agreements and shareholder and director disputes and contract disputes.

The lawyers at BSM Sydney Lawyer have expertise in developing successful negotiation strategies that achieve our clients’ outcomes by providing incentives to all parties to achieve settlement or resolution. We recognise that a resolution will usually require a solution that provides an incentive for each party to agree to a settlement and work hard to achieve this. We listen carefully to you and respond by obtaining information, analysing the evidence and formulating the best negotiating strategy. This often results in a positive and rapid outcome. If negotiation fails, the framework for formal alternative dispute resolution techniques such as formal mediation, conciliation, arbitration, expert determination and finally litigation already exists and can be easily implemented. Our senior dispute resolution lawyers offer a free 20-minute consultation to discuss your matter.

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Brander Smith McKnight Lawyer Sydney has offices conveniently located in Sydney CBD, Sutherland, Parramatta, Shellharbour and Wollongong