ReSolution Issue 25, June 2020 | Page 30

29 www.nzdrc.co.nz

Deal mediation

A deal mediator may be appointed to assist parties that are not in dispute but who are trying to agree the terms of a commercial contract. This is an emerging trend and recognises the fact that parties who have a great deal invested in the outcome of their negotiations often need help getting through impasses in the process.

Deal mediation addresses two things:

• Parties invest a great deal in commercial negotiations (due diligence, loss of business opportunity, sunk costs on advisers, funding costs etc.). This investment can create an adversarial aspect to the negotiations because the parties may each feel they need to recover their investment by obtaining some advantage in the final outcome. Deals fall over when both parties reach a stalemate for these reasons.

• Parties in this position can benefit from a deal mediator’s neutral and objective perspective. Just as when the parties are in dispute, a deal mediator can build rapport and trust with both parties, help maintain relationships that are starting to fail, assist in option generation and essentially carry out all the functions they would when mediating a dispute.

Deal mediators may also remain engaged with the parties and effectively stay on as a mediator to the agreement (discussed below). The mediator can then continue his or her role in assisting the parties to manage the relationship and their communication, as well as mediating any disputes which may arise under the agreement.

Mediator to the dispute

This involves appointing a mediator to a dispute at the earliest possible opportunity. Under a mandatory mediation provision, this would occur when one of the parties first gave notice of the dispute.

The aim of such an appointment is for the mediator to assist the parties in reaching a resolution. Given the early stage of the intervention, the role of the mediator would include:

• Assisting in identifying impediments to settlement;

• Ensuring that the right decision makers are engaged for each party;

• Assisting with the fair exchange of information (an essential ingredient for early resolution);

• Managing expectations;

• Early reality testing;

• Assisting parties to manage the relationship and coaching them on this aspect;

• Designing the dispute resolution process that will best suit the nature of the dispute.

All of these roles can equally be applied to the facilitation of issues that are not yet disputes but may become so if the parties’ communication (or lack thereof) lets them down

Using mediation as a business tool - Part 2

By Paul Sills

In the last article Paul introduced the concept of early intervention in commercial relationships – using mediation as a business tool rather than as an adjunct to litigation.

In Part 2 we will look at some practical examples of this concept at work.1

ReSolution | June 2020