“It’s not fair!” How many times have mediators and negotiators heard that refrain? Whether from the mouth of the negotiator across the table or the politician seeking higher taxes, everyone wants their “fair share.” But what is ‘”fairness” anyway?

Is there a more subjective, elusive, or slippery word anywhere in the dictionary? Like other perceptions that affect negotiation, fairness is in the mind of the beholder. Yet the concept is not without objective parameters, and periodic review of fairness guidelines might be helpful to ADR providers and consumers before they resort to emotional arguments about “what’s fair.”

“An outcome that appears to be fair may be more important than winning or losing,” observe ADR authors Jay Folberg and Dwight Golann in “Lawyer Negotiation.” Our perception of fairness consists of two components, distributional fairness and procedural fairness. The former is the quantitative outcome – what you get in the negotiation; the latter is the process used to get there – how you were treated. Both provide the foundation for analyzing the fairness of any negotiation.

The most recent and illuminating illustration of the interplay of distributional and procedural fairness comes courtesy of the Baltimore Ravens NFL football team. As Andrew Beaton reported in the Wall Street Journal, the Ravens propose that the NFL abandon the conventional coin toss for starting overtime. Under current rules, when a game goes into overtime, the referee tosses a coin; the winner gets to decide whether they want the ball or choose to defend. The problem is the winner most often chooses the ball because that statistically determines who wins the game. So it turns out the revered coin toss – the gold standard of who goes first, a 50/50 chance – is not so fair after all in this context.

The Ravens propose a “spot and choose” method to eliminate this luck factor. After a coin toss, the winner picks starting field position; then the other team decides if wants to play offense or defense from that spot. Consider this a football variant of how two friends divide a piece of cake: one cuts, the other chooses. Nobel Prize winning economist, Richard Thaler, from the University of Chicago, endorses the Ravens’ proposal as simple, fair, and fun.

You can see why procedural fairness is so important in football: the distributional outcome is win/lose, all or nothing. The procedural process had better be solid because there is no compromise in the result of the distribution. The same logic applies to resorting to trial to determine conflict outcome where negotiation breaks down. The parties accept the legitimacy of a verdict – even one they don’t like because they respect the process that produced it.

Respect for procedural fairness reflects why mediation is a trusted and popular method of dispute resolution. The parties may design their own “spot and choose” method of facilitated negotiation. And even if they choose not to actively design the process, their opportunity to participate in facilitated negotiation with an experienced mediator provides the parties with control and an opportunity to be heard that they would not otherwise have in a trial. Even if the outcome is not exactly as they would have preferred, they are willing to accept and implement it.

Procedural fairness plays a role even where par ties choose to negotiate directly rather than to mediate. Which negotiating style or procedure produces the best outcome? While opinions certainly differ and choice of style depends on personality and the details of the negotiation, the research appears to favor an interest based approach to negotiation over a competitive or adversarial one. Consider your negotiating style carefully; it may well determine your outcome.

Like procedural fairness, distributive fairness too is highly subjective. Impartial and educated observers will often disagree about the fairness of an outcome. Not all conflicts will have the definitive outcome of an NFL football game. But here too benchmarks are available to guide decision-making.

Folberg and Golann suggest four competing principles or rules for determining distributive fairness: equality, need, equity, and generosity. Equality means everyone in a group should share its benefits equally. The need principle dictates those who need more should get more than those who need less. Generosity says one’s outcome should not exceed that of others. Equity links distribution to relative contribution.

The authors apply these principles to a hypothetical joint venture between two individuals, one the creator and sweat equity implementer of the idea and the other who supplies the capital for the enterprise. How do you divide their outcome? Equality will distribute income equally; need will give the poorer negotiator – here the creator – more income. Generosity will result in want the income of neither exceeding the other.
And equity will require determining whose contribution is most valuable.

These distributive fairness guidelines may be considered and applied in any negotiation or mediation, not just the joint venture hypothetical. Choosing among them will depend upon things like the complexity of the case, the relationship between the parties, your degree of self-interest, and cultural norms – whether your social group values individualism over collective benefit for example.

So, the next time someone shouts “it’s not fair,” remember the Baltimore Ravens. There is more to decision-making than a simple coin toss. Some tried and true rules for procedural and distributional fairness may provide helpful guidance.