Settling at mediation: Helping parties use their BATNAs

Imagine finding yourself in conflict with someone else. You want the issue resolved, but you also want an outcome that feels fair—one you can live with, explain to others, and look back on with confidence. In an ideal world, deciding whether to accept or reject a settlement offer would be simple. But what should your reference point be when making that decision?

In their influential book Getting to Yes, Roger Fisher and William Ury of the Harvard Program on Negotiation define that reference point as the Best Alternative To a Negotiated Agreement, or BATNA. They recommend that anyone entering a negotiation understands their BATNA before discussions begin. Your BATNA helps you determine your Reservation Point—the threshold below which accepting an offer is worse than pursuing your best alternative.

How Do You Find Your BATNA?

Identifying a BATNA involves three steps:

1. Brainstorm all possible alternative courses of action.

2. Assess the merits of each alternative.

3. Select the option that offers the best realistic outcome.

This may appear to be a straightforward exercise. Consider a simple example: buying a book. Your local bookshop sells a paperback for £10. Other alternatives might be:

• A shop in the next village selling it for £8 (but with travel time and cost).

• An online retailer offering it for £7 with a short delivery delay.

• A hardback signed by the author for £12.

The content is the same, the prices differ, and additional factors—format, convenience, personal values—play a role in deciding what is “best.” Even in this simple scenario, assessing your BATNA involves weighing qualitative and personal factors, not just price.

In complex negotiations, this assessment becomes more challenging. But because your BATNA is the foundation of your negotiation strategy, doing the hard thinking early gives you a significant advantage.

Using BATNAs in the Mediation of Legal Disputes

In many everyday negotiations, one option is simply to walk away. But in legal disputes, walking away may not be realistic. If parties do not reach agreement at mediation, several things may follow:

• The dispute may continue to simmer unresolved.

• One party may issue court proceedings.

• The other party may do so unexpectedly.

• Practical steps may be taken to mitigate the consequences of the unresolved issue.

Therefore, when mediating legal disputes, parties must place value not only on sums of money but on a range of non-financial factors, such as:

• The importance of the ongoing relationship, especially in probate or business disputes.

• The value of swift resolution, including time saved and stress reduced.

• The affordability of continuing legal costs.

• The relative certainty of a settlement versus the uncertainty of litigation.

  
  

Good Preparation

Ideally, parties will have considered their BATNA and Reservation Point before the mediation begins.

This involves clarifying their underlying interests and needs, and attaching realistic value to non-monetary factors. Useful questions include:

• What are we actually trying to achieve—commercially or personally?

• What is the impact on wellbeing of settling today versus prolonging the dispute?

• What will it realistically cost if litigation continues?

• What are our prospects of success, in whole or in part?

• Can litigation alone achieve what we want?

  
  

Options for Mutual Gain

Good preparation also involves considering the other party’s BATNA. What might their alternatives be? How realistic are their assumptions? Is there likely to be a Zone of Possible Agreement, where both sides’ acceptable outcomes overlap?

Parties should also explore options that might add value for both sides. One often-overlooked “mutual gain” is settling before substantial legal costs are incurred. Effective mediation advocacy means making offers that address the other party’s needs as well as your own.

It is also important to recognise that when individuals represent organisations, they may carry two BATNAs—their own and their organisation’s—which may not always align.

What Happens in Practice?

Despite best intentions, parties often come to mediation under-prepared:

• Emotions interfere with rational assessment.

• New information emerges during mediation that changes perceptions of the BATNA.

• Assumptions made beforehand turn out to be unrealistic.

• Lawyers may give sharply differing advice; at least one perspective may be flawed.

• Cost estimates for litigation, always difficult, may diverge significantly.

All of this makes real-time thinking and reassessment essential.

The Mediator’s Role

A mediator’s core function is to help parties have better conversations. In civil and commercial disputes, this typically includes:

• Helping parties negotiate more effectively.

• Exploring what genuinely matters to each side.

• Ensuring parties feel heard and understood.

• Helping them rationalise possible outcomes—particularly how they will justify decisions to others.

• Reality-testing their BATNAs, challenging assumptions and highlighting risks and opportunities.

By guiding parties toward a clear-eyed understanding of their alternatives, mediators help them make decisions that are thoughtful, informed, and durable.

Conclusion

Mediation succeeds when parties are equipped not just with strong arguments but with clarity about their interests and their realistic alternatives. Understanding a BATNA—and testing it rigorously—allows parties to negotiate with confidence, evaluate offers wisely, and avoid decisions driven by emotion or uncertainty.

When mediators support this process, negotiations become more constructive and outcomes more satisfying. A well-understood BATNA does more than guide strategy: it empowers people to regain control, reduce conflict-related stress, and move forward with resolutions that truly meet their needs.