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Making Peace

If you haven't yet considered mediation as a way to resolve business disputes, here's why you should.
January 1, 2004
URL: http://www.entrepreneur.com/article/66072

That our justice system is rife with problems is not news. With few exceptions, litigation takes too long, costs too much, and often leaves even the winners feeling like victims- just some of the many reasons why deal-makers should favor mediation over litigation.

Think of mediation as negotiation with a moderator. The mediator (a neutral third party) listens, questions, clarifies, sets ground rules and suggests alternatives, all to help the parties work out their own solution. A mediator has no authority to bind the parties, unlike an arbitrator, a judge or a jury. Jane Guerin, an attorney specializing in mediation and a UCLA law lecturer, highly recommends mediation. "Compared to litigation and arbitration," she says, "the parties have greater control over how their dispute is resolved."

Because mediation is informal, nonadversarial and keeps disputants talking directly, it is surprisingly effective. In fact, experts say that mediation is successful 80 percent of the time. In the United States, studies show high satisfaction rates on both sides, and that mediated settlements are far less likely to be protested or later attacked than litigated ones.

Mediation is a good choice when parties are cooperative, want to preserve a relationship, and/or want a creative solution that a court doesn't have the inclination or legal authority to grant. For example, in a lawsuit recounted by Guerin, "The plaintiff agreed to accept frequent flier points in lieu of cash-a win-win compromise that was unlikely to have occurred in court." However, mediation probably won't work if one side's out for blood, or too stubborn or far apart from the other.

Today, there are hundreds of public mediation centers operating nationwide, as well as numerous for-profit dispute resolution services that offer mediation. Your mediator should be unbiased, experienced and skilled. However, because there's currently no widely accepted certification or training for mediators, you may have to do a little extra shopping. Get recommendations from your lawyer or the local bar association. Be wary of former judges; they're used to orchestrating (that is, coercing) settlements and may lack the diplomacy required of a mediator. If your dispute involves technical knowledge, get a mediator with the right background.

When one side wants to mediate and the other doesn't, an invitation from the mediator to the reluctant party is helpful. For best results, each side should bring someone with the authority to settle and the ability to be an articulate, level-headed spokesperson. Having people on your side with a calming influence, or that the other side really wants to talk to also helps. If you're called on to make an opening statement, take it easy. Antagonizing the other side defeats the purpose of mediation.


A speaker and attorney in Los Angeles, Marc Diener is author of Deal Power.