Mediation: The Real Advantage

If you stay in business long enough, inevitably you will get into a dispute with a customer, supplier, joint venturer, partner, or a tenant. That’s just the way it is. The real question is: what do you do about it before you get down to the brass tacks of being in a lawsuit?

You have to view the dispute like you would when a machine is broken where you do not have the expertise to repair it or when you have a medical condition which requires the aid of an expert (a physician) to treat you. You need such an “expert” for your dispute; an individual who is trained in effectuating resolutions - a mediator.

Mediators are skilled in negotiations, not only in the mechanics of haggling toward a monetary resolution, if necessary, but they know how to make the individuals comfortable in the adversarial setting, how to elicit suggestions and how to calm those who are volatile. Mediators can skillfully direct the parties to a financial resolution through techniques like bracketing (having the parties commit to a range in which they will settle) or framing (presenting the odds in a favorable fashion, i.e. most could agree to accept $200 of a disputed $600 as opposed to a one-third chance of getting $600).

But by far, the most important thing a mediator can offer is what they are not. They are not the judge and not bound by the law. Mediators can guide parties to resolutions that no judge can award, and can structure arrangements which are outside the scope of a verdict.

An example of this relief is one that I cite from personal experience. I was sitting as a mediator where two partners were in a monetary dispute concerning the dissolution of their business. The monetary negotiations were going nowhere and there seemed to be no way to bridge the gap between the demand of the departed partner and the offer of the one who remained in the business.  

When I was reviewing documents which reflected the scope of the business, I noted the existence of several massive pieces of what I thought were items of farm machinery located in Greece (they had absolutely nothing to do with the dispute). It was unclear who owned them, how they were owned, whether they had to remain in Greece, whether they were collateralized or, because I am a city kid totally unfamiliar with farming equipment, what the machines actually did or what they were worth. But what came out of my mouth was, “what about those tractors?” After about two hours, the transfer of the rights to those tractors (not all in the same fashion) was what put the parties over the threshold and settled the case.

A judge could never have done that. A jury could never have found that. In the situation I have outlined, the court-ordered relief would have been restricted to monetary damages. But as a mediator, I was not so restricted and could effectuate a result which settled the case without the time and expense of going to trial because we went beyond the boundaries a trial could reward.

Next time you are faced with a dispute, give mediation a try. Remember, your business is not the lawsuit business. You want to end the dispute as quickly and as cheaply as possible, and mediation is the path that will get you there.

For questions, comments, or additional information, please contact Steve Kapustin at skapustin@regerlaw.com, or via phone at 215.495.6534.