Citibank

A distributive negotiation will focus on the division of a set amount of resources, largely determined by the aspiration price (the maximum that party A would like to get, and which is also the leastamount that party B would like to pay), and the reservation price (the least amount that party A would accept, and the maximum that party B would prepared to pay). Well over 90% of all civil lawsuitsin the America are settled out of court, and most are largely resolved through the application of a distributive negotiation.

On a dreary, rainy night in October of 1968, a young woman wasdriving behind a lorry truck in the U.S. Perhaps impatient with the speed of the transport in front of her, the young woman by the name of Ms. Anderson steered her vehicle to peer around the lorry driver’sside to see if the way was clear. Before she could react, she was struck head on from an oncoming vehicle from the opposite direction. Ms. Anderson sustained permanent and debilitating injuries as aresult of this horrific crash. Just recently, she had retrieved her vehicle from Sorensen Chevrolet which she had been having some repairs completed. Unbeknownst to her, Ms. Anderson did not noticethat her front driver’s side headlight was malfunctioning. The oncoming driver who had struck her had not seen her on that dark misty night when the accident occurred.

Mr. Miller, lawyer representingMs. Anderson, held Sorenson Chevrolet as being liable for the accident and subsequently filed a $1,633,000.00 law suite against Sorensen. Sorensen had a faulty repair policy with an insurance company(which shall be called ABC Insurance). The policy had a ceiling of $500,000.00. Sorensen made it very clear to ABC Insurance that they would readily sue ABC if they settled for anything over the halfmillion limit of the policy, urging them to settle out of court.

Miller, the plaintiff’s lawyer countered that he would not accept an out of court settlement for anything less than the maximum...