The following dispute resolution question was posed to a faculty member and executive committee member Guhan Subramanian as part of our “Ask the Negotiation Coach” series of articles.
My company is in the middle of a contract dispute with a customer. The dollar values are large, but thus far things have stayed professional. Our contract specifies binding arbitration in the event of a dispute, but the customer has proposed mediation as a way to avoid the risk of an arbitrated outcome and also to preserve what will hopefully be an ongoing relationship. Though we are amenable to mediation, we are concerned that the particular mediator their team has proposed does not have expertise in the technical issues at stake. We have a different person in mind who, in our view, has a greater technical expertise and would do a better job of bridging the gap between the parties. Should we recommend our preferred mediator as a counteroffer?
First of all, I commend you for keeping things professional and for aspiring to preserve the relationship with your customer. As you know, in many business disputes, particularly when the stakes are high, emotions can escalate, and the result can be less-than-productive negotiations.
To answer your question, I recommend that you have an open-ended conversation with your customer on the objectives of the mediation. I have witnessed situations in which one or both parties think they want mediation but assume that all mediation is the same. In fact, it’s not, and clarifying your objectives before you pick a mediator will ensure you are on the same page once the process begins.
The Definition of Mediation and the Differences Between Facilitative and Evaluative Mediation
There are many different kinds of mediation, but two are most relevant for your question. In a facilitative mediation, the mediator’s role is to smooth the lines of communication between the parties, make sure each side is listening to the other, and generally ensure that the conversation is a productive one. In an evaluative mediation, the mediator’s role is not only to facilitate the conversation but also to evaluate each side’s position (and in some cases) predict what judgment an arbitrator might make, and possibly propose a settlement for the parties to consider.
Your team and your customer’s team should think about what role you collectively want your mediator to play. In your context, it would be critical for the mediator to have technical expertise in an evaluative mediation but not necessarily important in a facilitative mediation. So determining jointly what kind of mediation you want will determine whether technical expertise is important.
In situations where emotions, personalities, or past history are creating a breakdown in the negotiation process, facilitative mediation might be more appropriate. By contrast, when a key goal for one or both sides is to educate themselves and the other side about the underlying facts and legal backdrop, evaluative mediation might be best.
The Substance of the Dispute Resolution and Choosing a Mediation Style
It sounds as though your problems are not interpersonal. If this is correct, evaluative mediation might be what you want. If your customer agrees, then they should be able to see why their proposed mediator is not the right person for the job. Hopefully, what might have been a fight between your pick and theirs will be resolved by your mutual interest in finding the right person for the task.
If instead you jointly conclude that facilitative mediation is what you want, and thus that technical expertise is not that important, I would suggest going with their mediator. My impression is that their person is a reasonable choice, but not perfect from your perspective. In the end, you want the other side to feel good about the process to preserve the relationship and maximize the likelihood that the mediation succeeds. Letting them have their mediator gives them one less potential reason to complain after the mediation ends. The customer isn’t always right, but this might be a relatively cheap “give” for your side.
What are your thoughts on dispute resolution? Leave us a comment.
Adapted from “Dear Negotiation Coach: Negotiating for the Right Mediator,” first published in the September 2012 issue of Negotiation Briefings.