Negotiation is when you try to end a problem or dispute with another person, by reaching an agreement.
When to negotiate
The first step is to think about how you would like to settle the dispute and what the other party might accept. Then, suggest a settlement to the other party.
You can negotiate by talking to the other party, or by writing a letter, or both. If the other party has a lawyer, you should speak to their lawyer rather than directly to the other party.
Negotiation can take place at any time, for example, when a problem first happens, when you are thinking about starting a case, or even after a court case has started.
If you need help negotiating with the other party, you could try mediation. This is where an independent third party can assist you and the other party to discuss your issues and hopefully come to an agreement. For more information, see Mediation.
Negotiating in writing
Written correspondence that includes a settlement offer usually has the words 'Without Prejudice' written at the top. This means that things you say in a genuine attempt to resolve the dispute out of court can't later be used against you in court.
You should write ‘Without Prejudice’ on the top of any letter or email containing an offer to settle that you send to the other party if you do not want any of your negotiations to be used against you in court.
Sometimes you should not put 'Without Prejudice' on the top of a letter. For example, if you decide to go to court you may want to show that you made an offer to settle.
Before you write a letter of offer, you should get legal advice on how to write the letter.
Reaching an agreement
Although negotiating with the other party can be very informal, if you are able to reach an agreement you should write down what has been agreed. For more information, see Put it in writing.
If your dispute is about a home loan, personal loan, credit card or consumer lease or other type of credit from a bank or credit provider, see Resolving your dispute with the bank or credit provider. If your dispute is about a bill with a utility provider, see Electricity, water, gas and phone bills.
For more information about negotiating with the other party, see the Negotiation section of the Legal skills topic.