Third-Party Negotiations

Learning Outcomes

  • Discuss third-party negotiations

For every negotiation that goes well, there is one that crashes and burns. In the last section, we talked about some of the ways a negotiation can go wrong—one of the parties might have an abrasive personality, might be from a different culture, or even be unethical. Or perhaps there seems to be no resolution that will satisfy all parties. Whatever the reason you’re stalled in the negotiation process, you should know that help is available: it’s called the third-party negotiator.

a judge's gavel next to two booksIf you’re surprised that such a “job” as third-party negotiator exists, you’ll be even more surprised to find out that they’re pretty common. A judge, a lawyer, and even an agent for a movie star is a third-party negotiator. Anyone who negotiates on your behalf or listens to your pleas and then decides your fate fits into the third-party negotiator role.

There are four basic third-party negotiator roles: arbitrator, conciliator, consultant, and mediator. Each of these third-party negotiator roles provides a specific service for the parties who have employed him or her, and their services are often situation-dependent. Let’s take a look at each role and how it functions.


An arbitrator is a third party with the authority to dictate agreement. Arbitration can be voluntary or forced on the parties of a negotiation by law or contract. The arbitrator’s power varies according to the rules set by the negotiators. He might be limited to choosing one of the party’s offers and enforcing it, or he may be able to freely suggest other solutions. In arbitration, there is always settlement.

Often used in the U.S. legal system, an arbitrator is used in lieu of a judge (though, technically, a judge is also an arbitrator!). If two people are, for example, involved in a car accident, they might agree to use an arbitrator in order to determine a fair amount of repayment for damages caused. In entering into the arbitrator situation, both parties agree to let that person make the final decision.


A conciliator is a trusted third party who provides communication between the negotiating parties. This approach is used frequently in international, labor, family and community disputes, and, if you’re a fan of The Godfather movies, it’s the role that Robert Duvall’s character played for the Corleone family. Conciliators often engage in fact finding, interpreting messages, and persuading parties to develop an agreement.

Very often conciliators act only as a communication conduit between the parties and don’t actually perform any specific negotiation duties.


A consultant is a third-party negotiator who is skilled in conflict management and can add their knowledge and skill to the mix to help the negotiating parties arrive at a conclusion. A consultant will help parties learn to understand and work with each other, so this approach has a longer-term focus to build bridges between the conflicting parties.

A real estate agent is an excellent example of a third-party negotiator who is considered a consultant. People who are looking to buy a house might not understand the ins and outs of earnest money deposit, title insurance and document fees. A real estate agent will not only explain all of that, but prepare the purchase agreement and make the offer on behalf of their client.


Finally, a mediator is a neutral, third party who helps facilitate a negotiated solution. The mediator may use reasoning and persuasion, they may suggest alternatives. Parties using a mediator must be motivated to settle the issue, or mediation will not work. Mediation differs from arbitration in that there is not a guaranteed settlement.

Mediators are most commonly found as third-party negotiators for labor disputes. If a labor union and a company come together to discuss contract terms, a mediator may be employed to assist in ironing out all the issues that need extra attention—like vacation days and percentage of raise.

Practice question

All negotiations are going to experience issues and obstacles, and how you handle them is going to dictate your success. Every negotiation is different—it’s why applying one particular strategy to a negotiation can be so complicated—but continued practice and awareness of the issues that will trip you up are a good start toward a successful negotiation meeting.


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