Oliver Coppolino & Mark Hearns
07/07/2015
Our argumentation style evolved throughout the negotiation. We initially opened with a fairly confrontational negotiating style due to a disagreement on elementary facts of the case. The claimant’s party insisted that a vehicle was responsible for the injuries of their client, but we took the position that there was no evidence of any such vehicle apart from
Mr. Romero’s recollection of the events. The rationality behind the confrontational negotiating style was for two reasons. First, we believed that the onus fell upon the claimant to prove that there was a vehicle present. Secondly, it was our job to verify the legitimacy of cases and we made the assumption that State Farm was presented with many fraudulent or frivolous claims; therefore, this case was approached with skepticism due to the vague nature of its facts.
Both parties came prepared with written testimony from medical experts. This helped to clarify the issues. The letters first established that there were facts not being contested. Both parties agreed that Mr. Romero was injured and the extent of what those injuries were. The main issue of contestation was the presence of the vehicle and this is where the expert testimonies differed. The claimant’s expert assessed the injuries as most likely caused by a vehicle, but our expert assessed the cause of the injuries as inconclusive.
It was due to this stalemate regarding the cause of the accident that our argumentation style evolved from a more confrontational negotiating style and into a more co-operative negotiating style. With the help of our facilitator, both parties came to the agreement that we would be in trouble if this case progressed to court and that it was in everybody’s interest to not let this happen.
Our objective for this negotiation was to settle the matter with as little cost to State
Farm as possible. Although State Farm has nearly unlimited resources, we were instructed by State Farm that we must reduce the costs of claims in our department. It is our job to protect State Farm from fraudulent and unfounded claims as well. In this particular case, our bargaining range encompassed values between $1,000.00 and $25,000.00, but our target point was $18,000.00. When establishing our target point, Oliver estimated that the cost of physiotherapy for the claimant would not exceed $3,500.00 and the claimant’s lost wages would amount to around $4,800.00. We believe that after the claimant’s expenses are covered, a sum of $10,000.00 should certainly cover his pain and suffering; therefore, we decided that a sum of $18,000.00 would be fair for the claimant and constitute a minimal expenditure on the part of State Farm.
Our resistance point in this matter was $25,000.00 due to the external pressures from State Farm to keep costs minimal. We also felt that this resistance point was fair for
Mr. Romero since it was established that he worked at a minimum wage job and it would result in the equivalent of a year’s wages for him. Our BATNA would have been to go to an arbitrator with whom we often do business and who is inclined to see from the perspective of State Farm. We would feel fairly comfortable that the arbitrator would make a decision that is favourable to State Farm. Our WATNA would have been going to trial in front of a judge who may be sympathetic to Mr. Romero’s position and may rule in his favour, resulting in costs paid by State Farm upward to over $100,000.00.

Oliver Coppolino & Mark Hearns
07/07/2015
Considering that the claimant’s position included a $100,000.00 claim, and although there was case law submitted by Mr. Romero’s representative supporting this figure, our first offer was a “cold water offer” of $1,000.00. The reason for this was that while the claimant’s case law supported their $100,000.00 asking price, the facts of our case were distinguished enough that a repeated outcome if it went to court would not be as certain as the claimants insisted. Once the cold water offer was made, then both parties willingly negotiated on reasonable terms and avoided extremes. We were very happy to engage in cooperative negotiation after the claimant’s position gave way to their real interests.
Our interests in this matter include our objective of coming to a negotiated agreement without further consultation/intervention, as well as the necessity of settling for a sum of less than $25,000.00. Our fear in this scenario was that we may have had to go to trial and pay a much larger settlement if we could not come to a negotiated agreement. We believed that the claimant’s interests were similar to our own. Mr. Romero likely wanted to come to an agreement without further intervention, needed to get a settlement upwards of
$10,000.00, and was afraid to go to trial where the decision is difficult to predict and where more legal fees would be accrued.
The most difficult part of this negotiation was setting aside the issue of whether or not a car had actually been involved. We also had difficulty when discussing the intoxication of Mr. Romero at the time of the incident and whether his lucidity and state of mind were really relevant. Overall, we found that the claimant’s representatives were reasonable to negotiate with. Once we agreed to disagree on certain unimportant issues it was a fairly easy process to come to a fair settlement of $21,250.00. Settlement allowed both parties to avoid their WATNA scenarios and that the agreed to sum was lower than our resistance point and higher than the other party’s target point. We consider this negotiation to therefore have been a success for both parties involved in its decision making process.