With apologies to Lennon and McCartney, you all know you want the world to change – the world of how we resolve disputes. Let’s start with a discussion of the role of disclosure in mediation.
Imagine (‘it’s easy if you try’) a dispute involving the break-up of a franchisee partnership, followed by non-renewal by the franchisor, and a franchisor-takeover of the franchisees’ former territory – all taking place 8,000 miles away from franchisor’s HQ and mandatory venue for dispute resolution. Both former franchisees (who were involved in an ugly dispute with each other over the split) brought claims against the franchisor. Against that backdrop, what would you say to a proposed mediator who had: 1) represented the franchisor’s CEO in another matter a few years earlier; 2) whose firm was currently representing the franchisor in yet another pending matter; 3) who was now currently serving as an expert witness for the law firm of another of the parties in another matter; 4) who had a long history of representing parties against clients of yet another of the lawyers in the case; 5) and who had a social relationship with 3 out of the 4 lawyers involved in case?
I expect that you’d be aghast at the thought of so many inter-relationships and opportunities for conflicts, especially if you were the 4th lawyer who didn’t even have a social relationship with the proposed ‘neutral’ mediator. But the fact is that it was the 4th lawyer who brought the proposed mediator into the case, and that’s despite what had been a frosty relationship between him and the mediator of long duration relating to work for a former client.
Suffice it to say, the mediator made an extensive and specific disclosure of all contacts, professional and social, with all the lawyers for the past several years with all the lawyers, and perhaps surprisingly, all parties and lawyers engaged the lawyer to serve as their mediator in a an 8-figure mediation. From the lawyers’ perspectives, everyone realized, or at least saw the possibility of, was that the mediator’s familiarity with each constituency (that is, franchisor CEO, franchisee lawyers) could help reach the goal of the mediation process – resolution in a way that worked for all. None of the stake-holders allowed a fear of favoritism to hamper the process; they all took the plunge.
After lengthy pre-mediation calls with all sides (the 2 franchisees had their issues as well), a very full day of mediation hundreds of miles from everyone’s home (with a 12-hour international Skype hook up for one of the franchisees), an unsuccessful late in the evening mediator’s proposal, many later phone calls over the following few weeks, and a looming arbitration hearing date, the case settled for the amount of the mediator’s proposal.
What does this show us? Familiarity breeds not just contempt; it also, in the context of mediation, allows an opportunity for leveraging past relationships and industry familiarity for the benefit of all. But it can only be realized with complete, unvarnished disclosure, and faith in the mediator’s commitment to impartiality.
So, my friends, the next time you see someone you know or believe your adversary knows as a proposed mediator, don’t be so quick to strike; instead, think about how your very own relationship, or prior mediation history with the mediator or how your adversary’s mediation history with the mediator may enhance your chances for a successful outcome.
For completeness, I’ve asked each of the lawyers involved in this mediation to comment upon this post before publishing.
Introduction On August 25, 2021, Law decree 118/2021 came into force, introducing a new proceeding in the Italian legal system, the “Negotiated settlement for the solution of business crisis”, concerning...By Giovanni Matteucci