Fair Resolution Of Business Disputes Is Possible

Why Do Mediations Fail?

There are dozens of reasons why disputes that should be able to be resolved at a mediation sometimes fail. One reason may be that the mediator selected was not the right person for the type of dispute involved. Another may be that the attorneys involved were not fully prepared and that lack of preparation impacted the willingness of the parties to move from their original positions. Another might be that the parties themselves simply did not attend the mediation in good faith, ready, willing and able to settle the dispute.

The empirical evidence about mediations is that they generally are very successful in resolving disputes. The number of successful settlements in mediation often times rank in the 80-90 percent range. But again, sometimes cases do not settle.

Those that have been involved in mediations over the years generally know the difference between good and bad mediators. Mediators that simply shuttle offers between the parties tend to have far less success than those that foster communication between the parties. Similarly, those mediators that fail to help clarify the issues in dispute, fail to explore the true interests of the parties or fail to help to craft meaningful solutions to problems will commonly have less success than those that fail to participate in the process of resolution and the hard work that goes with it. Good mediators should facilitate communication between the parties, analyze the people and situations that led to the dispute and work with the parties to find solutions.

Attorneys that fail to prepare for mediations can often be responsible for their failure as well. Most importantly lawyers must prepare their clients for what will happen in a mediation, the time it will take, the importance of participating in the process as well as acknowledging that to be successful the parties must be willing to move from their respective positions. The attorneys must engage all involved parties in the mediation, including insurance companies that are potentially liable, whether subrogation or contribution will be an element of the resolution and should verify the financial settlement authority of the parties that the lawyer is representing. All of this is separate from preparing the presentation of the facts and law needed to sway the other parties involved so that they consider the risk of litigation. The lawyers should have all of their evidence available at the mediation and a clear understanding of their eventual trial strategy. Without a demonstration of a strong case by the parties involved, mediation won’t be successful simply because neither side will feel as if they have risk in going to court.

Lastly, the parties themselves must be participants in good faith. Especially when the mediation is voluntary and not court ordered, the participants must be emotionally present to attend the mediation with a goal of resolution. If the parties attending enter the mediation overconfident and appear at the mediation only for “free discovery”, the process will likely not work. A recalcitrant party, unwilling to be flexible and unwilling to move from their stated position or change their financial offer, will undoubtedly lead to an impasse. For mediation to truly work the parties themselves, the central figures in deciding to settle or fight further  must be in the mindset to be open-minded for resolution. Otherwise, the effort at mediation will be wasted.

For almost thirty years, Scott Zucker has acted as outside legal counsel to a variety of privately held and publicly traded businesses involved in multiple industries. His legal services have ranged from employment, real estate, construction and corporate consulting to representation of companies in the litigation of their financial and business disputes. Scott’s goal is to utilize his legal and business. experience to foster the use of Alternative Dispute Resolution to help parties reach resolutions without the time, effort and cost of court litigation.