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Using Mediation as a Business Tool- Part 1
By Paul Sills
“We are used to thinking about competitions in which there is only one winner… But the world is not really like that… The key to doing well lies not in overcoming others, but in eliciting their cooperation.” (Robert Axelrod)
Mediation is often effective if the parties can engage in person and in a private but controlled environment. Facilitated direct conversation helps eliminate misunderstandings and failures in communication. Discussions have real context when face to face.
Relationships typically become even more important after a business deal has been completed. Once the contract has been signed it goes in a file and the relationship between the parties becomes the most important thing. That relationship is being negotiated all the time.
A significant aspect of ongoing relationships is negotiating conflict. Inevitably, problems arise during the life of the contract. For example, a party might realise they neglected to stipulate a key term, leading to different perceptions of what is fair. Or one side may come to believe that the other is failing to live up to the agreement.
Agreeing on a dispute-prevention clause in advance, and then actively utilising that provision, can go a long way towards helping parties manage conflict proactively when – or even before – it arises. Learning how to discuss areas of conflict, rather than simply sweeping them under the rug, can be just as important.
Commercial parties should be encouraged to identify disputes early and to identify issues that may potentially lead to a dispute, and then work together to de-escalate the issue or dispute. Both parties to the agreement need to keep their focus on commercial interests rather than the win/lose results of litigation.
Mediation provides a framework that strengthens the ability of business people to adjust relationships and resolve problems in a straightforward, efficient and effective way without losing control of the outcome to a judge or arbitrator. However, after initial attempts to negotiate fail because the parties met with strong emotions and tough initial positions, and settlement momentum dissipates through frustration or lack of structure the common reaction is to move ahead with litigation or arbitration. This is disappointing but not surprising, since litigation and arbitration represent the established “default” framework for handling disputes when party to party negotiations fail.
However, a growing number of business managers and in-house counsel recognise that they need to consider new options besides unassisted negotiation on the one hand and third-party adjudication on the other. Mediation permits parties to engage in a carefully managed discourse where the dispute or issue is viewed against the backdrop of business interests, practical considerations and options for mutual gain.
Mediation can provide distinct advantages over direct party to party negotiations. The mediator can listen, suggest, steer, facilitate, test realities, and explore options for mutual gain. By having a facilitator take control of the negotiating experience, the parties can focus on the outcome.
There are a number of benefits that support the increased use of early intervention facilitation in commercial relationships:
• Customisation of the process: mediation is extraordinarily flexible when used properly. The range of options for business parties seeking third-party assistance to facilitate is limited only by the willingness of the participants and the creativity of the mediator. There are many ways in which mediation can be tailored to the needs of the parties and the particular issues in question. Examples include:
Setting the basic format for interaction between the parties and the mediator;
Use of information to provide an objective foundation for negotiations;
Use of technology (including online mediation);
A mediator can facilitate submissions (joint or several briefs) on legal or factual issues;
Presentation of “best-case” presentations for the benefit of business decision-makers;
Engagement of one or more experts to provide reports on key technical issues.
ReSolution | Mar 2020