QUESTION: What is one strategy for businesses to eliminate the need to go to court?
ANSWER: Mediation (also described as third-party assisted negotiation) is, in my opinion, the best strategy. Litigation operates on the assumption that two opposing lawyers coming before a neutral judge will lead to the full development of truth and, ultimately, a just and fair outcome. This assumes equally skilled lawyers, an utterly unbiased court and limitless amounts of money and legal resources. Anyone involved in litigation will tell the same story. “It took months (maybe years)! It cost so much!” Many will say, “It wasn’t worth it!” Mediation avoids spending endless time and money navigating an arcane system understood only by lawyers.
Q: What is mediation?
GERALD S. CLAY
Title: Founding partner
Company: Clay Chapman Iwamura Pulice & Nervell
Age: 74
Education: J.D. from the University of Michigan
Email: Jerry.Clay@paclawteam.com
Website: paclawteam.com
A: In mediation the parties speak to the mediator in a legally confidential manner and agree upon their own solution. Facilitative mediators use interest-based bargaining, ask artful questions and more to help the parties negotiate agreements that work for them. They carry messages, offers or compromises between the disputants. The mediator can also be a neutral source of relevant legal and social choices enabling the parties to open a discussion of those matters. In an evaluative approach the mediator may posit an opinion with respect to how the conflict might be resolved in the courtroom. It is a system premised on the notion that third-party assisted negotiation can produce better results than a judge’s decision.
Q: Why is mediation the best option?
A: Litigation can go on years and literally costs hundreds of thousands, if not millions, of dollars. In mediation, with the proper planning and discussion, disputes can be resolved in as quickly as one day. The costs of mediation are limited to the fees of the lawyers that represent each side and the mediator. Generally, in mediation there is no need for formal discovery, depositions, motion practice and other costly procedures that are required by litigation.
Q: What are other situations in which mediation has proved successful?
A: Mediation has been proven successful in any relationship-based dispute, and all relationships, including business relationships, begin as personal ones. Some other particular instances in which mediation works particularly well is in cases of divorce or condominium disputes. There the parties may have a mutual interest — such as children or their shared space — that makes it essential to continue the relationship.
Acrimonious litigation can destroy a relationship and, with it, good relations, whether personal or business.
Q: What are the other advantages of mediation?
A: We do not focus on the past moneys lost, rather what future matters may be at stake — some noneconomic. Mediation agreements can focus on solving problems, planning for the future, improving relationships and seeking joint gain.
A positive outcome can improve one’s social standing as a reasonable and reputable person, the type one might want in his or her own social network and business connections. Economic benefits might flow from a mediated agreement: time to pay, security for future payments, new business relationships, mergers, new business referrals, introductions to third parties and potential clients, and, not to be underestimated, catharsis — the release of long-held anger or anxiety.
