Mediation Process and Business Negotiations: How Does Mediation Work in a Lawsuit?

How does the mediation process work in a lawsuit or dispute with business partners? What benefits does mediation offer in dispute resolution?

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How does mediation work in a lawsuit? What benefits can the mediation process offer businesses that deal with multiple contractual agreements, some of which may end in disputes? These questions were answered by Harvard Law School Associate Professor and negotiation expert Dan Greiner in an “Ask the Negotiation Coach” segment from our Negotiation Briefings newsletter.

Question:

My business enters into lots of contracts, and disputes sometimes arise. We want to minimize the time and effort needed to resolve these disputes (for both ourselves and our business partners) in addition to increasing mutual satisfaction with the ultimate conflict resolutions. We’re thinking of including a provision in our negotiated agreements requiring that all disputes go through a mediation process before they proceed to a more formalized conflict resolution mechanism. Is this a good idea?


Download this FREE special report, Mediation Secrets for Better Business Negotiations: Top Techniques from Mediation Training Experts, to discover mediation techniques for selecting the right mediator, understand the mediation process and learn how to engage the mediator to ensure a good outcome from the Program on Negotiation at Harvard Law School.


Answer:

Mediation’s proponents say that it increases party satisfaction with outcomes, saves parties time and money, and reduces overload on formal dispute resolution systems (that is, the courts).

Despite its widespread use, however, there is little solid evidence regarding mediation’s effectiveness. Most of the available research compares the outcomes of disputes that went to mediation with the outcomes for disputes that did not.

But that comparison suffers from classic selection problems: It’s probably the case that parties who used mediation were more willing to settle to begin with than parties who did not. In addition, only a handful of the few randomized studies that have been done were analyzed properly. So we don’t know nearly as much as we need to about whether mediation works.

How does mediation work in a lawsuit: Does the existing negotiation research say anything useful?

On the basis of the few reliable quantitative studies (mostly conducted in courts), we can make some guesses as to when mediation might be effective, at least for commercial/business disputes.

First, the mediation process may help if the disputes that arise for your organization are similar to one another and if you use the same mediator or set of mediators over time, even if the parties are different from case to case. Mediators who see the same kind of dispute a few times may learn to anticipate party reactions and bottom lines, try out potential solutions, and see what works.

So you may want to consider whether the disputes your organization faces involve the same set of clauses in your contracts or involve recurring issues and whether you can use the same mediators repeatedly.

Second, the mediators themselves may matter. At least one study has suggested that, at least for commercial disputes, mediation may work when the mediator has a relatively strong personality.

One stereotype of a mediator is someone who gently absorbs parties’ anger, refocuses them on their interests, and creatively finds common ground for a settlement (see also, creative problem-solving approach). That approach might be helpful for some types of cases, but so far there is little credible evidence to support it. In contrast, there is some data suggesting that a more aggressive approach may be helpful for commercial disputes. So you may want to think about whom you would hire to mediate.

Retired judges may be one possibility, although they certainly aren’t the only option.

Finally, a few negotiation studies have suggested that mediation works when the facts of the dispute are fairly well established. In other words, it is possible that mediation may be more effective when parties agree generally about what happened but disagree about how to respond than it is when parties disagree about what actually happened.

In sum, if the disputes your company encounters tend to involve fairly clear and recurring issues, and if you can find some strong mediators, a mediation clause may be a good option.

Share your mediation process for business negotiations with our readers in the comments.


Download this FREE special report, Mediation Secrets for Better Business Negotiations: Top Techniques from Mediation Training Experts, to discover mediation techniques for selecting the right mediator, understand the mediation process and learn how to engage the mediator to ensure a good outcome from the Program on Negotiation at Harvard Law School.


Adapted from, “Weighing Mediation’s Results,” first published in the November 2011 issue of Negotiation.

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Comments

One Response to “Mediation Process and Business Negotiations: How Does Mediation Work in a Lawsuit?”

  • Dorival D.

    Mediation is a most updated way on resolutions based on de the ” divine culture of Peace”, and it really works. Congratulations about the issue. São Paulo Brazil.

    Reply

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