FRIDAY, MARCH 13, 2020
This is prime territory for mediation—especially because it’s not easy for judges or arbitrators to resolve disputed issues of business judgment, nor may they impose on the situation the kind of resourceful business solutions that the parties can hopefully fashion with the mediator’s assistance.
Most of the business disputes mediators handle are what I call “one-shot dollar disputes,” involving parties with no continuing relations squabbling over money. This often becomes a zero sum game, with few variables that can prove useful in crafting a creative resolution. And since things usually end up in court if the parties are unable to reach a negotiated agreement, the litigation alternative forms the measure against which the parties evaluate any proposed mediation resolution.
There is, however, another kind of situation ripe for mediation that presents a blend of “dispute” and “deal” factors—what I call “deal.dispute mediating.” Here, although specific items are in dispute (or even the subject of active litigation), other vital issues separating the par.ties aren’t litigable at all. Rather, they’re business matters, not involving claims of legal wrongdoing, that need to be resolved for final agreement to be reached. While the litigable disputes involve prior issues, these other matters deal with current and future issues relating to assets, liabilities, trans.actions and conduct—all of which can be difficult for the parties to reach agreement on without the help of a neutral.
The need for deal-dispute mediating can arise in a number of differ.ent contexts—for example, a corporate joint venture that has soured, or a financially troubled company (with too many mouths to feed) attempting a turnaround to avoid bankruptcy, or a business breakup between long-time partners, each of whom wants to remain in business. I consider this prime territory for mediation—especially because it’s not easy for judges or arbitrators to resolve disputed issues of business judgment, nor may they impose on the situation the kind of resourceful business solutions that the parties can hopefully fashion with the mediator’s assistance.