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The Divorce Encyclopedia
Negotiated Settlement; Negotiated Agreement


Term Definition Negotiated Settlement; Negotiated Agreement - when the parties, usually with counsel, develop a separation agreement that is not mediated or arbitrated.
Application in Divorce In divorce actions, a negotiated settlement by the spouses is a much desired goal. Negotiated settlements are easier on the parties and much less expensive.

In a negotiated settlement, the husband and wife deal with each other face-to-face, and they make up their own way without a paid mediator or binding arbitrator. In a negotiated settlement, the spouses move at their own speed. Very often couples exchange proposals, and then, after reviewing them with the respective lawyers, make counterproposals, and the process repeats its until the two of them have a tentative agreement. This back and forth between spouses keeps the direct involvement of the respective lawyers at a minimum. In other words, couples who negotiate for themselves keep the lawyers on what one lawyer called "a tight leash." In some cases, the lawyers’ involvement is limited to filing paperwork, and if the couple decide to go pro se, not even that.

Couples who can come to agreement on their own are also much more likely to have a civil relationship after the divorce. This can make parenting much easier. This form of negotiation is much less expensive than either mediation or arbitration (and everything is less expensive than litigation).

Negotiation between spouses works when both act in good faith. An negotiated settlement dovetails easily in a simplified uncontested divorce. In negotiation with a spouse, couples may find it advantageous to meet in some neutral place that carries no emotional memory.

If after a good faith effort negotiation breaks down, the couple can turn to mediation.

Sometimes in divorce actions, spouses trade off interests that they might otherwise claim in the hope of an expeditiously negotiated settlement. For example, John may have an arguable claim to the appreciation of securities Ginny received as a gift from her grandmother, but waive that claim in exchange for Ginny agreeing not to assert her legitimate claim to a share of John’s company stock. John and Ginny agreed to this together, without lawyers and even a dollar-and-cents calculation of value. The agreement removed two items from discussion and moved them closer to an agreement they both can live with and one they negotiated together. By doing so, neither John nor Ginny held out for top dollar, but both made life easier for themselves.

In a negotiated settlement the role of the lawyer is that of counsel and advisor, not a hired gun. In a negotiated settlement, a lawyer keeps his or her client on track, moving toward a settlement that is fair and reasonable.

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