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Negotiation in your weathertight claim

If you're making a claim to repair your leaky property through dispute resolution, this information sheet will give you details about the negotiation process as an option for lower-value claims.

Negotiation is an informal, flexible way of finding a solution between parties where the value of the claim is less than $20,000.

If you choose to proceed with negotiation, a claims advisor will discuss with you how a negotiation may work for you. However, the claims advisor will not attend or chair any negotiation sessions.

Choosing negotiation

There are many advantages to entering into negotiation with parties to your claim.

  • It requires a constructive, co-operative approach.
  • Parties can develop and agree workable and mutually acceptable solutions – often outcomes that could not be achieved in adjudication or court.
  • Parties can discuss matters outside the scope of an adjudication hearing.
  • Negotiation is likely to be less expensive than adjudication or court action (the process is also quicker).
  • Even if negotiation does not result in agreement, the process of isolating issues and agreeing on facts can help if the claim continues to mediation or adjudication.

Benefits and limitations

You need to consider whether negotiation is right for you before deciding to go ahead with it as there are many benefits and limitations of the process and the potential outcome.

Benefits

  • Negotiation is completely in the hands of the parties (you included). Parties could arrange to negotiate on a weekend, or by phone, which may not be possible with a professional mediator.
  • It can be arranged quickly.
  • It's a more more informal process than an adjudication hearing.
  • Parties can decide the outcomes for themselves.
  • It's cheaper than a tribunal hearing or to court.
  • You're in control of resolving your dispute.
  • Parties can tailor the process suit your needs.

Limitations

  • It is not helpful when the parties do not participate with respect and in a rational way.
  • Parties can't be forced to negotiate.
  • There is no impartial person to help guide the process (like there is in mediation).
  • Negotiation does not work where there are power imbalances between parties.
  • It could be stressful, as is any dispute resolution process.
  • Participation can be futile if you have not clearly identified your position and are not fully committed to the process.
  • Some issues may not be negotiable for particular parties.

Attendance and participation

Parties have no legal requirement to negotiate as it is a voluntary process.

However, parties should consider the cost and time that could result if it is unsuccessful and your claim is drawn out longer, possibly even going to adjudication.

An effective negotiation will usually be conducted face to face.

It is essential for each party to actively participate if you are going to reach an agreement. Negotiation requires good intentions and patience on the part of all parties.

Preparing for negotiation

You need to be prepared for discussions with all parties on the day. Before the negotiation takes place, make sure you:

  • understand the process
  • have all the information you need to represent your interests
  • have clarified the role of any support people, and understand how they can help you in the negotiation.

You should also consider:

  • what you want out of the negotiation
  • your needs and concerns
  • the other parties’ concerns
  • any potential solutions (keep in mind it may not be helpful to be locked into particular solutions at the beginning of the negotiation).

You need to share any documents you plan on referring to with the other parties before the negotiation happens. That way there are no surprises on the day. Remember to bring the documents to the negotiation.

Your assessor’s report is likely to be used as a document in the negotiation. It is a neutral document that you and the other parties can refer to. Any party can agree or disagree with the report, in whole or in part.

Role of representatives

You are the the best person to discuss your needs and priorities and reach agreements.

However, if you wish a representative to act in your place, make sure they have full authority to settle. Discuss your claim fully with them beforehand.

Settlement proposals can be of an unexpected and unpredictable nature. If your representative is restricted to settling within strict guidelines you've set in advance, then settlement might not be reached on the day.

You can have any support people you wish, but you should let other parties know who will be present. That way nobody feels surprised or disadvantaged.

How negotiation works

A private negotiation will run in different ways depending on how many parties are involved, how complicated the issues are, and how the parties choose to structure the negotiation.

Although negotiation is informal, one that is run to some kind of schedule and with a clear structure is more likely to achieve a settlement that all parties are willing to commit to.

Your negotiation could follow the structure below:

1. Chairperson

You will act as the ‘chairperson’ for the negotiation. You will have discussed with your claims advisor a way of structuring the discussion so that all parties are able to put their points across.

2. Ground rules

You should start with an introduction about what the aim of the negotiation is and how it will progress.

You will need to set some ground rules to help the discussion move smoothly. It is important that all parties commit to following these rules. They are not restrictive, but merely common sense. They are designed to help all parties get a chance to participate fully and get their point across.

3. Introduction and initial discussion

Each party will introduce themselves and give a brief statement on what they feel the main issues are for discussion. This will give each party an opportunity to hear the others’ perspectives.

4. Summary of agreed issues

You will need to summarise the issues you have all agreed on. Each issue should be fully discussed so everyone understands each other’s views.

5. Exploring options

You should ensure every one has discussed the issues before you invite parties to explore options.

You will need to make sure each option is evaluated so a solution can be found that will satisfy as many people as possible.

6. Set break

It may be helpful to set a break time in the discussions. That will give everyone time to themselves to make sure they understand what is happening and to possibly discuss things privately with their support people.

7. Settlement

You should make sure a settlement is written up at the close of the meeting. The settlement advisor will have provided a form that can be used to write the settlement up.

All parties will be sent a copy of the signed settlement agreement after the negotiation. This way everyone knows what has been agreed to and what each party needs to do to meet any obligations in the agreement.

An MBIE mediator can also sign a statutory declaration, which enables the agreement to be enforced through the District Court. Your claims advisor can arrange for this to happen.

Types of settlement

In general, monetary agreements are more successful than agreement for work. You may have issues enforcing any agreement for work, and problems can arise if the work is delayed for any reason.

If other parties were dependent on the work agreement, then your repair process is stilted.

Despite this, negotiation agreements should be flexible. You should clearly spell out your expectations around payment and time frames if a work agreement is the best solution.

You should also agree a back-up monetary amount should the work agreement fall through.

Getting the most out of the negotiation

You and the parties should agree to stop and continue at a later date with a mediator if there is a power imbalance in the room or the discussions are too emotional.

It is better to delay the discussions than to lose the goodwill and willingness to participate of those involved. If a party feels they signed an agreement under duress, then the agreement is less likely to succeed.

You can help to make the negotiation more successful by:

  • turning off your mobile phone
  • trying to understand the other parties and make sure they understand you
  • trying to work from agreed sets of information and facts
  • participating rather than just reacting to other parties’ actions
  • allowing everyone to speak without interruption
  • being aware of how long you speak so everyone can participate in the discussion
  • speaking for yourself rather than dictating what other parties should be saying
  • standing in the shoes of other parties to see things from their points of view
  • clarifying any point you are unsure about with the other parties
  • staying to the end unless you wish to formally leave the negotiation.

The other parties are likely to be feeling the same pressure and frustrations as you.

Negotiation is flexible. You can take a break if any of the parties need to get advice or calm down.

There are no time limits for negotiation under the Weathertight Homes Resolution Services Act 2006 (the Act) and the parties can control how the negotiation takes place.

You claims advisor is available during work hours for any assistance or support required.

Outcomes

You need to enter any dispute resolution process with an open mind and realistic expectations. You can only reach a settlement if you find a mutually agreeable solution with some or all of the parties.

If you cannot reach a settlement at negotiation, mediation or adjudication is the next step. Negotiation provides a good background to settle your problems at mediation with the assistance of a professional and impartial mediator.

Mediation in your weathertight claim tells you about the process.

This information is published by the Ministry of Business, Innovation and Employment’s Chief Executive. It is a general guide only and, if used, does not relieve any person of the obligation to consider any matter to which the information relates according to the circumstances of the particular case. Expert advice may be required in specific circumstances. Where this information relates to assisting people: