What is Mediation?
Mediation is a voluntary and informal process by which a third party neutral assists the disputing parties in reaching a negotiated settlement. It is different from a court hearing or arbitration where a judge or arbitrator makes a final decision in favor of one party.
In mediation, the parties are empowered to design a mutually agreeable resolution that can address the financial and other qualitative aspects of the dispute. The mediator has no decision-making authority but can be a sounding board and propose solutions which the parties are free to either take or disregard.
Bi-lateral negotiations sometimes fail because the parties strategically withhold information so are unable to see where their interests are aligned. The benefit of having an independent, neutral mediator involved is she can guide the negotiation and level of disclosure to help the parties better understand the underlying causes of the dispute, what each parties' needs are and why and ultimately find creative solutions for a final agreement that is mutually acceptable.
I bring my experience as a business professional to help the parties analyze each of their positions from a financial perspective and help find creative ways to structure their resolutions. If the parties wish to continue working together, which is often the case, my process helps the parties define new ways of operating to uphold the agreement and avoid future conflict.
Frequently Asked Questions
How is mediation different from arbitration?
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Arbitration is like a private trial where the arbitrator has final decision authority. The arbitrator's final ruling is binding on the parties, enforced by the courts and difficult to appeal. Mediation, on the other hand, is a process by which the mediator facilitates negotiation between the parties of a final agreement. Unlike arbitration where one side can "win" and the other side "loses", mediation seeks a solution that is designed by the parties and is mutually acceptable.
Is mediation only used when the parties are already in a litigation process?
No. Mediation is an effective tool for avoiding litigation as the parties are able to resolve their dispute privately. Mediation takes a fraction of the time and is a fraction of the cost.
Mediation, however, can be used by parties that are already in litigation as a way to expediate their settlement and increase the likelihood of an agreement that is mutually beneficial.
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Are lawyers, accountants and other advisors allowed to participate in the mediation?
Yes, but they don't have to. Every case is different and some parties chose to conduct the mediation with their advisers present and others prefer to just consult with them during breaks. As part of the pre-mediation work, we will determine what is most appropriate for the given case.
​What is the process and how long does it take?
Step 1. Initial Intake. During the initial intake, I will seek to understand the basic facts of the case to determine whether I am qualified to handle the case or if I should recommend a different mediator. I will also ask questions about the specific parties involved to make sure I do not have any conflicts of interest that would jeopardize my ability to stay neutral.
Step 2. Pre-work. Prior to the mediation session, I will spend time with all parties separately to understand each perspective and the relevant facts. During this time I may ask to review relevant documents (purchase agreements, shareholder or membership agreements, employment agreements, loan documents, valuation opinions, etc) as well as any relevant models or other analysis. I will also ask each party to prepare opening remarks that they will share in the session.
The pre-work is typically done over the phone or Zoom but in certain cases, I will propose we meet in person. Depending on the complexity of the case, the pre-work can range from a few days to up to a month.
Step 3. Mediation. The mediation process somewhat depends on the nature of the case but typically we start with a joint session and each party will give their opening remarks and give their objectives for the outcome. After that, I typically meet with the parties separately in private sessions and throughout the process we may alternate between joint sessions and private sessions while we are finalizing terms.
Again, the length of the mediation depends on the complexity of the case and can take anywhere from a few hours to a full day to multiple sessions that span a few weeks.
Step 4. Post-Mediation. Some parties elect to have a follow up session to check in on compliance with the agreed to terms and make adjustments as necessary.
Are the final terms binding and how do the parties document their agreement?
I will document the final terms in a term sheet or summary of terms document. Typically the parties have their own counsel who will draft the binding documents (typically an amendment to existing documents or a settlement agreement) and I can work with their counsel to ensure the binding documents reflect to agreed to terms. In some cases, the parties ask that I deliver a draft of the binding documents and I will use an attorney in my network who I trust has the relevant expertise.
Contact
Please reach out to see if mediation can help your business partnerships.