August 25, 2017

Good Mediation is Usually Not a 50/50 Thing

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Mediation has proved itself over and over again to be a valuable tool in resolving disputes. It is fast, relatively inexpensive, and is risk free since each party controls whether or not there will be an agreement reached and what the terms of that agreement will be. Tens of thousands of dollars in litigation costs can be saved and the parties can customize their deal in a way that neither a judge nor an arbitrator could. 

But mediation isn’t just for the resolving damages in formal proceeding after a project is finished or when a complaint has been filed to start a lawsuit. In an ongoing business transaction such as a construction site where a dispute can disrupt or even stop a construction project, the relatively low cost of involving a mediator who can be on hand often in a matter of hours is a great investment for all involved. 

But why isn’t it done more often?

A common objection to mediation is that it always seems to end up with the mediator suggesting that the parties just split the difference. Sometimes that is the right solution, but usually it is not. If you find that you are regularly getting that result from mediation, you don’t have the wrong process (mediation is not to blame), you probably have the wrong mediator for that particular job. The right mediator will come to the project with a breadth of experience that will allow him to understand the problem and will spend the time it takes to fully understand the true nature of the dispute, the law and the facts. He will be certain that a party taking an unreasonable position is aware of the risks of continuing in that direction and will guide that party away from that position, and he will be certain that the party in the stronger position (often because it is the party that controls the money) is nonetheless benefitted by a settlement and which will require a concession of some kind in recognition of the valid points made by the party with the weaker position.

The right mediator will always work with the parties to be sure each understands the options and to develop creative solutions that address the needs of both sides. Qualitative evaluation by the mediator of the relative positions of the parties is vital to reaching an agreement. Trying to add the demands together and dividing by 2 is doomed to failure because it forces both sides to take unreasonable starting positions. 

When the parties understand that the mediator understands both sides’ concerns, strengths and weaknesses, and is willing to speak frankly with the parties about them, the chance of reaching a settlement that both sides can live with is increased dramatically.