What practical lessons can we learn from the Brexit negotiation process?

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In the latest UK200Group blog post, Nick Parker, Partner Berry Smith discusses a very topical subject...

Nick Parker
It may have escaped your attention, but at the moment we have a high profile negotiation to try and resolve an important issue being played out in public.

I refer of course to the ‘B’ word.

Many of us get involved in negotiations from time to time. Whether with or on behalf of our clients, our colleagues or with other professionals. We probably all have a view as to how the Brexit process has developed in the last couple of years and, for what it’s worth, I share my thoughts here as a lawyer specialising in resolving disputes for clients, and as a mediator regularly instructed by parties and their advisers to help get an agreement to bring a dispute to an end.

I should make clear this blog does not attempt to stray into the debate as to whether Brexit is a good or bad thing in itself or indeed what the solution should or could be. What I am interested in is what observations can be made about the process of negotiation that has been adopted since the result of the referendum, and what lessons can we take for our every day practices? This approach involves detaching ourselves from the issues themselves and looking down on the process from above.

At the time of writing, Mrs May’s draft withdrawal agreement has been overwhelmingly rejected by the House of Commons, and that helps illustrate the first key point in a negotiation – does the party negotiating have the authority to settle the dispute?

It is not uncommon in a negotiation or a mediation to get to a point where, despite lengthy discussions and progress having been made, one of the participants then says that they need to get agreement from elsewhere before they can proceed further with the discussions to reach agreement. In other words they have reached the limit of their authority.

The downside with this is that the higher form of authority who is required to give approval to go further has not had the benefit of sitting in the room and discussing the issues. Negotiations can sometimes break down when a new participant is introduced to the process at a late stage, as they often focus more on the ground already given by their side from the position they had adopted going in to the negotiation rather than focusing on concessions made by an opponent, or why ground had to be given.

The huge practical difficulty with Brexit is that a deal has to be agreed by Parliament, and given the absence of a clear parliamentary majority, and division within political parties on the issue, obtaining clear agreement on any solution looks to be a tall order, to put it mildly.

In a negotiation, if there is no way in which a positive decision can be made to settle the dispute, the dispute does not get settled.

In legal disputes this usually leads to a judge ultimately imposing a decision on the parties. Where there is no such decision making process, as here, then there is stalemate.

The second key point is to have clarity of what is it you are trying to achieve? Or, to put it slightly different way, what is it you would like to achieve?

The question sounds obvious, and in many negotiations is fairly easy to identify. It could be to make a dispute that threatens to get much worse in terms of risk (cost, management time, potential payment to another party, adverse publicity) to go away and to get on with more positive business.

Despite the repeated assertion of ‘Brexit means Brexit’, the multitude of issues that arise as a consequence and the various permutations of what the future could look like outside the EU means that this is a very difficult question, made worse by the fact that there are so many disparate views.

The reality of a parliamentary democracy means that even though Mrs May and her negotiators (seemingly) had a clear focus on what it was that they were trying to achieve, that is not much good if the people who have to approve the agreement reached by those negotiators do not share those objectives.

This leads to a linked point, ensure that heading into the negotiation you have a shared vision.

If the dispute involves an individual as decision maker then that is easy. If it is a company, then there is usually a pyramid structure of responsibility so that the decision maker’s views, often in consultation with colleagues, is final. In a parliamentary democracy, when hundreds of people have to vote on approval, who are split into competing political parties (that are often not themselves of one mind) it is a nightmare.

How can you improve the prospect of having a shared vision? This can be illustrated by the ‘boiling frogs’ analogy. Apparently, if you put a frog in a saucepan of cold water and heat it slowly the frog adapts its body temperature to the changing heat and falls asleep. Conversely, if you put a frog in a pan of boiling water it will jump out (I hasten to add that I have not tried this myself, and do not encourage you to do so either!).

The adage is often used in the context of change management – if you want to take people with you on the journey then if you involve them throughout the process they are more likely to be engaged and work positively towards the goal. If on the other hand you keep something secret and then reveal it – it is more likely that people will be critical and try and pick it apart.

That is what appears to have happened with Brexit negotiations – after many months of little news of the detail of the negotiation, the draft deal documents were produced in great detail with a fanfare…and went down with many like a lead balloon.

With hindsight, trying to get more people in the tent during the negotiation stage would have been advisable (though undoubtedly difficult). It looks as if a bigger tent will be needed now to try and get more people inside.

The next point is beware of boxing yourself in by deadlines and red lines. While these can be seen as showing decisiveness and clarity, they can come back to bite you.

You may recall that Mrs May decided to announce the date of Brexit, the 29 March 2019, two years ago. The clarity then has created an issue now, given that we are now a matter of weeks away from the date with no exit deal in place and (at the time of writing) it looking very difficult, if not impossible, as to how agreement can be reached in the remaining time.

Giving such a deadline can be risky, unless the downside in not achieving a target date is tolerable to you. Of course, with Brexit there is no agreement on that point either – some think a no deal outcome is acceptable, whereas others think that this would be a highly damaging to the country.

As for red lines – it is not uncommon for a party going in to a mediation to have red lines, being issues which they say they cannot or will not break. Sometimes people keep these private and they emerge in discussion when it comes to trying to piece together a deal, sometimes parties will tell the opponent and the mediator what they are in advance of the discussion.

My observation would be that successful negotiation invariably involves compromise. During the process it is common for red line issues to be prioritised and for some to be traded or adapted as discussions continue. It is often the job of a mediator in private discussion to explore such issues with parties, to drill down into why particular issues are seen as immovable, and consider whether there could be alternative solutions to these concerns. There often can. This problem solving part of the process requires imagination and thinking outside the box.

The risk in being too openly prescriptive about red lines in advance of a negotiation is that you can reach stalemate if the opposing party responds by adopting their own red lines. That stalemate either won’t then be broken at all until something causes a party or parties to change their positions, or further discussions mean that both parties will have to give ground and move from their stated definitive positions (in which case were they truly red lines anyway?).

At the time of writing, it appears that Mr Corbyn runs the risk of being boxed in by his own red line. He has adopted a position of saying that the Labour Party will not enter into cross-party discussions on a way forward until the government has ruled out a no deal outcome. The risk in adopting such an approach is that if the government does not concede that point openly (which currently seems unlikely), that he runs the risk of isolating himself and not being engaged in wider discussions and side-lined in the process.

So, in a negotiation you will probably be more flexible than you think you will be. Things change, things evolve and if the prize of resolution of the dispute is great enough then usually more ground can be given than was first envisaged.

What is the way forward for the Brexit process? Your guess is as good as mine. The days and weeks ahead seemingly need something different to happen in order to identify the ‘shared vision’ for which there would be parliamentary approval.

Of course, Mrs May has to date faced the difficult (impossible?) conundrum of having to enter into detailed, painstaking negotiation of detail on hugely complex issues with the EU27, with a lack of clarity on desired outcomes from those who need to agree to a deal, while playing to her parliamentary political party, her wider party, the media and the public.

Those issues remain for Mrs May, and the wider tent of politicians that it appears will be needed to identify a way forward …

• Nick Parker is a Dispute Resolution Partner at Berry Smith LLP in Cardiff and is recommended by Chambers and Partners Guide as a highly experienced mediator of civil and commercial disputes across the UK

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