When we think about dispute resolution, our minds often turn towards court action. However, disputes need not be adversarial, and relations between parties need not become irrevocably damaged. It may be possible, through careful discussion, to negotiate an agreement which satisfies both parties.

When entering negotiations, it is important to focus on the matter in dispute, rather than the parties in disagreement. By doing this, you are more likely to maintain a positive relationship with your counterparty. Personal attacks are likely to antagonise and, in many cases make parties less likely to accept a solution, no matter how sensible.

Try to understand the interests of your counterparty and why they want to achieve a particular outcome. A well-worn example of the importance of this is the tale of two children fighting over the last orange. Rather than the orange being split between the two children, each child was asked why she wanted the orange. It transpired that one wanted the fruit to make orange juice, while the other required the orange peel for baking. In a negotiation where parties have a greater understanding of the overall picture, mutually acceptable resolutions are more likely.

In attempting to reach a solution, think creatively. A satisfactory outcome to negotiation need not be black and white – it may not be a case of A being awarded £100 to the detriment and dissatisfaction of B. Consider a salary negotiation between employer and employee where the employer is constrained by a company policy preventing salary increases greater than 10% and the employee is seeking an increase of 20%. Rather than this being a winner/loser dynamic, parties could table a proposed 10% salary increase, together with improved company benefits for the employee with an equivalent value of 5% of their salary. Both parties leave the negotiations satisfied, without either feeling as though they have "lost".

Try to stick to objective criteria when considering proposals from your counterparty – for example, the market value of an item in dispute or legal precedent. It is far more difficult for a counterparty to challenge objective criteria and this forms a solid foundation for negotiations.

Finally, in any negotiation, the golden rule is to consider your best and worst alternatives to a negotiated outcome to allow you to properly evaluate any offer which is made. You should also consider the realistic alternative to a negotiated solution, for example one which is likely to be achieved through a formal dispute process.

Knowing your rights and obligations prior to commencing negotiations is imperative. Understanding which buttons to press and when is key to success.