Commercial Mediation – “We Ain’t Seen Nothing Yet”

Although mediation enjoys wide acceptance in North America and beyond for its effectiveness in the resolution of commercial disputes, “surface scratching” best describes this acceptance when compared to the potential applications for this powerful process (some of which are suggested at the end of this article). Providers, users and regulators of commercial mediation should reflect on the recent history of the process and commit to the expanded principled use of mediation for their mutual benefit.


Mediation begins with a simple idea: an impartial and mutually acceptable third party can guide disputing parties through the tangled thicket of their conflict to a resolution of their own crafting – a resolution they would not have been able to find unassisted. This simple idea, surely as old as human interaction, found new legs in the 1980’s and 90’s thanks to clogged court systems and prohibitive costs associated with traditional litigation. Technology, it seemed, was leaping forward in every avenue of human endevours with the notable exception of commercial dispute resolution where the technologies (i.e. the Court system) seemed intractably rooted in the 19th century rather than the 21st. This environment combined with post-modern social developments most closely associated with the increased liberalism of the 1960’s, proved fertile ground for the growth of commercial mediation.


In the early days it was often the insurance industry most effectively promoting the use of mediation. Anecdotally we understand that early mediation pilot projects undertaken by casualty insurers invariably demonstrated significant savings in transaction (and perhaps claim) costs through the use of mediation. But plaintiffs, and ultimately the plaintiff bar found their interests satisfied in mediation as well. For mediation addressed the “common interests” of defendants and plaintiffs, offering the opportunity to foreclose risk, delay, cost and stress in a procedurally fair setting.


Once the commercial mediation ball got rolling there was no stopping it. The favourable experience in the insurance setting caught the attention of policy makers and it wasn’t long before experiments with “court-connected” mediation led to the mediation process being brought into the tent as an accepted feature of modern courts. Other structural changes fueled the growth of mediation such as Codes of Professional Conduct requiring lawyers to consider mediation when advising clients, ADR “pledge” programs such as that instituted by CPR Institute for Dispute Resolution in New York and the Canadian Foundation for Dispute Resolution in this country and the growth of multi-step dispute resolution clauses (requiring mediation and then arbitration) in domestic and international commercial agreements.


Of course, while all this was happening the cadre of experienced and proficient commercial mediators continued to grow to the point where their “professionalization” is a reality or at least on the radar screen in many locales. Lawyers, too, naturally increased their effectiveness in the mediation process, understanding that in the future it would be traditional trials that would truly become the “alternative” process for resolving commercial disputes.


The foretold abridged history of modern commercial mediation primarily reflects developments in North America where the double whammy of cost and delay lit the fuse (the United States leading the way and Canada not far behind). The resultant explosion on this continent triggered a chain reaction that has now reached around the world. The integration of mediation into the British court system is now well established while the European Commission issued a “Green Paper” on its use earlier this year. Africa, Asia and Australia all have multiple commercial mediation initiatives. Also, pointing the way, the United Nations Commission on International Trade Law (UNCITRAL) adopted a new Model International Conciliation Law in June and it is the rare World Bank justice reform project these days that does not include an ADR component.


With the trend clearly discerned and the continued growth of commercial mediation beyond question the infancy stage gives way to adolescence and the constellation of challenges that stage always implies. Chief among those challenges: housing the flame of enthusiasm for commercial mediation in a lamp of wisdom so as to cast an ever-brightening light down the path of its development. That lamp, fashioned principally by three groups (mediators, users and regulators), can best protect the flame, while letting it shine, if the following principles are observed:


Commercial Mediators must strive for personal and collective continuous improvement in the ethical conduct of a mediation process characterized by integrity, procedural fairness and acceptable results.


Users – parties to commercial disputes and their counsel – must deepen their commitment to a collaborative approach to dispute resolution; understanding that, yes, humans are a competitive species, but that the best resolutions often come when there is a striving to find outcomes that acceptably address the needs of all involved.


Regulators must assist in expanding the opportunities for the appropriate use of commercial mediation while, at the same time, resisting the temptation to restrain the creative potential of the mediation process through well-intentioned but ultimately self-defeating attempts to legislate its conduct.


The opening paragraph suggested that commercial mediation is just scratching the surface of its potential applications. What are some of those “below the surface” applications?


· Pre-litigation mediation sessions in which disputants search for a mutually acceptable solution to the problem prior to the exchange of often incendiary pleadings.


· Mock mediations when litigation is under way. Sophisticated litigators have routinely prepared for hearings using mock trail processes. Mock mediations ensure that parties and counsel are fully prepared to engage in commercial mediation.


· Mediated business negotiations in which a commercial mediator facilitates collaborative solutions and helps parties avoid derailing the deal-making due to the traditional stumbling blocks of game-playing, reactive devaluation and psychological factors.


· Mediated Board Meetings – as part of a necessary trend toward better governance models and in recognition of the potential value-added, business engages commercial mediators to facilitate meetings of boards of directors.


· Mediated caucus and cabinet meetings (and beyond). Commercial mediators facilitate decision making and problem solving in the political environment. And taking what may seem the next logical step, a public governance model in which mediation play a vital role.


Some express concern that the bloom is off the rose of commercial mediation; that the fad has come and gone (or at least is going); that the process is already tired and has run its course. It is simply not true. Increasingly the workhorse of commercial dispute resolution, the untapped value of the mediation process is bounded only by the imagination of mediators, users and regulators. A principled collaborative dialogue among these three groups is also an essential element in realizing the potential of commercial mediation.


                        author

Richard Weiler

Rick Weiler, an internationally recognized commercial mediator, serves on the Chartered Mediator selection committee of the ADR Institute of Ontario, the national executive of the Canadian Bar Association ADR Section and is a Governor and Vice-President of the International Academy of Mediators. He can be reached at rick@rickweiler.com. MORE >

Featured Mediators

ad
View all

Read these next

Category

Tinselgate And Online Redress

From Colin Rule's blog. An inside chonicle of the kerfluffle (a.k.a "Tinselgate") over the White House xmas tree, with an ODR emphasis added: "During the first three weeks of December,...

By Colin Rule
Category

The Art of Mediation in the Real World

I am a full time mediator, I train new mediators, and I teach mediation in Law School.  Most of us who teach this art or discipline seem to have a...

By Donald Cripe
Category

Bill Richardson: America’s hostage negotiation strategy is broken

"The blame is theirs. The lesson for us is that America’s hostage negotiation strategy is broken." The following op-ed from Bill Richardson, former governor and US Ambassador to the UN, shares...

By Jeff Thompson

Find a Mediator

X
X
X