The Value of Mediation
Mediation Offers Advantages Over a Court Decision
By James E. Morris, excerpt from Rochester Business Journal, 10/17/2003
You can achieve a winning result in a vigorously contested lawsuit without a judge or jury deciding your fate. Mediation as an alternative to a court decision is a process that is coming of age and should be considered at any stage of a dispute, including complex multi-party litigation.
Over-worked trial judges, once in court, cloak themselves in black robes, must be formal, cannot talk to parties alone and are required to adhere to precedent and strict rules of law. Even when a decision is final and arrived at after months or years, all too often what appeared to be a final result can be appealed to higher courts with more uncertainty and longer delays. The appellate court can even order a new trial.
In contrast, a mediation is informal. It is a â€œtime outâ€ when an impartial and skilled professional becomes involved in the dispute. The mediator has an opportunity to talk to each side alone to learn about the dispute, earning the trust of the parties in communicating with opposing sides.
The mediator does not give an opinion as to who is right and who is wrong, but points out the weaknesses and strengths of each side. A true and earnest negotiation of every point involving the dispute is then undertaken. Saving of costs, time, energy and dignity are all results of a successful mediation. Issues not even involved in the dispute can be discussed and disposed of as the parties meet.
Attorneys are very much involved in the mediation process. The participants do have their day in court with the mediator. There is no specific time limitation for mediation. It can go on for days or be interrupted and resume a month later. A good mediator will not give up when a roadblock appears. Efforts to work out a solution will continue. Even if litigation is ongoing the case will ripen so that the mediator will be able to try another approach toward resolution.
Wrongful death, personal injury and labor law violations are commonly resolved. Mediations include the breakup of a professional practice. Often lawyers, doctors, architects and other professionals do not enter into an appropriate formal agreement when they first affiliate. When they have a disagreement the disputes are not only devastating to the individuals but destructive of the individual practices. A successful mediation can salvage a life's professional work.
Family businesses can unravel as passed from one generation to the next. Discord can have a devastating effect not only with the business, but also its employees, customers and most of all family relationships.
For example, John, a third-generation member of a family involved in a successful manufacturing corporation, wanted to energize and update the company's processes. After attending business meetings and machine shows he believed that purchasing new equipment and teaching employees new work methods would improve efficiency and employee morale and increase the bottom line.
He progressed over the years, building the company's gross sales in excess of $20 million. By inheriting his father's shares, however, his interest only represented one-third of the ownership. His older and more reserved cousins, sons of his two uncles, became more and more distrustful and wanted to resume the old ways that had worked in the past. At a shareholder's meeting, John was booted from his position as Chief Operating Officer and his salary was reduced by 50 percent.
John sued for dissolution of the corporation. During the next four years, attorneys for the individuals and the corporation, together with those representing employees, engaged in hundreds of hours of court proceedings, discovery, inspection of records and depositions.
Each side hired experts and appraisers to evaluate the stock of the business. After they all spent more than $400,000 in legal fees and costs, one of the attorneys suggested that a mediator be engaged in an attempt to untangle the boondoggle and resolve all of the issues.
This became a most difficult case because not only was a business relationship involved but a family had basically stopped its own communication.
After three days of discussions with the mediator, one week before the trial, the dispute was resolved. Several weeks of court time were avoided, and each party felt a victory had been won.
The attorney who suggested mediation became the hero as the mediator untangled the web and was able to humanize the issues. The hope was raised that the family could pick up the pieces and resume its ordinary interactions, and the business could go on and become profitable once again.
In another case, a $7 million construction project went badly. Each of the contractors seemed to bump into the problems of the other and cast blame for faulty workmanship and delays. The owner refused to pay. Months of litigation cost much in terms of money and unproductive time in court and dealing with attorneys in preparation for further proceedings.
The bleeding needed to stop. All nine of the litigants, including the building owner, contractors and suppliers, wanted to call a truce and salvage what they could. The owner needed to release the money for more repairs. The contractors wanted to get on with others projects, which was difficult unless the bonding company cleared the builder's name. And suppliers just wanted to get paid.
Mediation seemed a natural remedy.
After 30 hours over a two-week period, full agreement was reached on all issues, even those not involved in the litigation. Money was paid, bonds discharged and suppliers paid.
Not all mediations are successful. However, just getting the parties together to talk is helpful because it may be the first time they have ever met fact to face to express their positions and sentiments. It ultimately can lead to a better understanding and a resolution.
If no resolution is reached, the discussion during mediation must remain confidential and cannot be used in the litigation.
Having served as mediator in hundreds of complex and high-end cases, I am convinced that true successes are found. These successes achieve efficient and equitable results through an understanding of human needs and interests of the parties.
The best result is one in which the people involved have a sense that they worked together to achieve a lasting result. No stranger dictated his or her path. Now they can go forward feeling as if they helped broker a win. There is finality.
|The best result is one in which the people involved have a sense that they worked together to achieve a lasting result. - James Morris|