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Summary
- Negotiation is the most common first step in resolving a business dispute, and it can be conducted with or without a lawyer depending on the value and complexity of the matter.
- Before negotiating, identify the key issues in dispute, consider your best alternative to a negotiated agreement (BATNA), and keep discussions focused and unemotional.
- If you reach a negotiated settlement, document the agreed terms in a Deed of Settlement prepared by a lawyer.
- This article explains how Australian business owners can use negotiation to resolve commercial disputes before escalating to formal legal proceedings.
- LegalVision, a commercial law firm specialising in advising clients on dispute resolution matters, outlines the practical steps and considerations involved in negotiating a commercial dispute.
Tips for Businesses
Before negotiating, clarify what each party wants and identify your walkaway point. Keep discussions commercial rather than personal. Engage a lawyer early for high-value or complex disputes. If you reach agreement, document the terms formally in a Deed of Settlement rather than relying on informal arrangements.
Negotiation is the most common form of alternative dispute resolution available to Australian businesses, allowing parties to reach a binding agreement without the time and expense of court proceedings. Before escalating a dispute to litigation or engaging a lawyer, businesses should attempt to resolve the matter directly by identifying the key issues, understanding each party’s position, and considering their best alternative to a negotiated agreement. This article will discuss the commercial tips and tricks you can use to self-solve your dispute and when you should seek legal assistance.
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What is Negotiation?
The term ‘negotiation’ refers to a discussion intended to reach an agreement. Negotiation is also a type of alternative dispute resolution.
Negotiation is the most common process for settling a dispute without going to court, as you can communicate with the other party to reach common ground. You may engage a lawyer to help you negotiate and put your best position forward for high-value disputes.
Disputes resolved by negotiation often involve compromises between both parties.
Considerations When Negotiating a Resolution
Set out below are some key considerations to utilise when negotiating and trying to resolve a dispute.
| Consideration | Strategy |
| What are the key issues in dispute? | What do both parties want, and why do they want this? Understanding both sides of the dispute can help you find a happy medium and progress the dispute. Further, acknowledging the other party’s needs is helpful to bring the parties closer together and soothe any tensions. |
| Keep things impersonal and unemotional | When parties are in dispute, emotions often run high and may continue to fuel the dispute. This can keep parties from coming to a commercial agreement. However, it is important to put these feelings aside to keep an open and honest dialogue open. |
| Before negotiating, consider the best alternative to a negotiated agreement (BATNA) | Before entering or starting the negotiation, consider the worst and best-case scenarios available if you cannot reach an agreement. Knowing your BATNA will help put the issues at hand into perspective. This includes what points you are willing to settle on, and what offers you will walk away from. |
When Should I Get a Lawyer Involved?
There are times when it is appropriate to get a lawyer involved early. The key factors to consider are:
- the value of the dispute;
- how much money is at stake;
- whether you have the resources to engage a lawyer or court;
- your dispute’s legal and factual complexity; and
- whether there is a risk of ongoing loss or damage to you or the other party if the matter cannot be resolved.
These are the primary commercial issues you and your lawyer need to consider when determining your next steps and how best to progress your dispute. Your lawyer will also need to consider your legal position and the strength of your case before advising how best to proceed.
While engaging a lawyer can be expensive, there are circumstances where it may be necessary to minimise your losses.
It is important to remember that going to court and litigating a dispute is expensive, time-consuming, and stressful.
When negotiating a dispute, there are no guaranteed or certain outcomes. You should always consider taking a commercially pragmatic approach to resolving your dispute and trying to compromise with or without a lawyer.
If you can reach an agreement by negotiating, you should document the terms and parameters of the agreement and engage a lawyer to prepare a Deed of Settlement.
Key Statistics
- 30%: Nearly 30% of Federal Court original jurisdiction proceedings were referred to mediation in 2023–24, with the Court treating mediation as an integral part of case management, confirming that negotiation and ADR are now expected first steps before contested litigation in Australian commercial disputes.
- Required by law: Under the Civil Dispute Resolution Act 2011 (Cth), parties must take genuine steps to resolve a dispute before filing in the Federal Court or Federal Circuit Court, including attempting negotiation, and must file a genuine steps statement confirming they have done so — making pre-litigation negotiation a statutory obligation, not just best practice.
- Legal Services Directions 2025: The Attorney-General’s Department’s updated Legal Services Directions 2025 require all Commonwealth entities to consider ADR as an alternative or complement to legal proceedings, reflecting the Australian Government’s position that negotiation should be exhausted before escalating any dispute to court.
Sources
- Federal Court of Australia, Annual Report 2023–24 (October 2024)
- Attorney-General’s Department, Civil Dispute Resolution Act 2011 (updated 2025)
- Attorney-General’s Department, Guidance Note 8: Use of Alternative Dispute Resolution by Commonwealth Entities (March 2026)
Key Takeaways
Negotiation is a form of alternative dispute resolution. You can negotiate with or without a lawyer. However, legal advice can significantly benefit you in the long term depending on the value and risks involved with your dispute. Negotiation is generally more cost-effective than going to court. It can also preserve important business relationships and achieve better outcomes than court orders.
If you need help negotiating or resolving a dispute, LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced disputes resolution lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee.
Frequently Asked Questions
What is negotiation?
Negotiation involves discussing with the other party to reach an agreement. You can do this with or without a lawyer, but you should consider engaging a lawyer for high-value disputes.
What other alternative dispute resolution methods are available to me?
You can also consider mediation, arbitration, and conciliation before litigation if negotiation fails.
What is a BATNA and why does it matter in a negotiation?
A BATNA is your best alternative to a negotiated agreement. It sets the minimum acceptable outcome you should negotiate for, helping you evaluate offers and avoid agreeing to terms less favourable than your available alternatives. Knowing your BATNA before entering negotiations gives you a clearer sense of when to walk away.
Why do I need a Deed of Settlement once we reach an agreement?
A deed of settlement is a binding document that can resolve disputes or end commercial agreements between parties. It prevents either party from pursuing the matter further and gives you a clear, enforceable record of what each party has agreed to do.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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