Commercial mediation: are you prepared?

Franklins Solicitors

1st March 2019

Legal Briefing

Franklins Solicitors

By Sarah Canning

A MEDIATION is an opportunity to resolve a dispute on your terms and therefore being prepared is key to securing the settlement that is best for you.

Approaching mediation as a negotiation with a difference helps. The neutral and independent mediator makes a great sounding board throughout the process in the secure knowledge that what is said to the mediator is completely confidential and will go no further unless you agree otherwise.

As with any negotiation, it is important to understand what is at stake and what is important to your business. The benefits of mediation make the difference because this is the forum when commercial acumen can come to the fore and the rigidity of the law and litigation process can take a back seat.

Look beyond the legal advice - what will a settlement mean to your business

If you have received legal advice, you will be aware of the strengths and weaknesses of your case in law. What lawyers cannot factor into their advice though is the actual impact upon you and your business and what that may mean in the short and long term.

A lawyer will not know whether this dispute could be hugely damaging to your reputation in your sector and if confidence in your business is lost the next tender you pitch for may not go your way. Neither will he or she know that you are about to launch a new product or enter into a new market and your time, energy, focus and funds are going to be far better spent on moving your business forward than addressing historical disputes. As a result, obtaining the best out of a mediation for you and your business means being open minded, looking beyond the legal advice and really understanding what a settlement means.

Understand your best or worst negotiated outcome

One useful approach is, to use an acronym, knowing your BATNA - your Best Alternative to a Negotiated Agreement. The bestselling book on negotiation, Getting to Yes by Roger Fisher and William Ury sets out how to understand your BATNA. There are essentially three separate steps. Firstly, listing as many possible actions as you can that may take place if no agreement is reached. Often, brainstorming this with a wider group is helpful. Secondly, take a couple of the more promising ideas listed and convert them into reality and practical alternatives by setting out exactly what would happen if they came into fruition. Finally, with the alternative options set out, select which would be the best. You now have your BATNA against which to compare any offer received during the mediation process. It provides you with a reality check that is specific to your business and circumstances.

Of course, there is also your WATNA... Worst Alternative To A Negotiated Agreement. Many enter mediation choosing a bottom line figure as their walk away number and become fixated upon that until the mediator begins to explore the risks and what will happen in reality if a settlement isn't reached. Exploring this before your mediation will help you develop your negotiation strategy and any initial offer. There can be some sensitivities about putting forward the first offer and yet this can be a very positive move for a party, enabling them to set the potential area for an agreement on their terms and not those of their opponent. Being prepared, factoring in all the information available to you and understanding the actual position for your business can put you in a strong position during the negotiations and, as mediation has a high success rate, investing the time beforehand is time well spent.

An opportunity for everyone to have their say

Finally, you will be given the opportunity to speak in an open meeting with your opponent. Parties, and indeed their solicitors, can be reluctant to participate in this joint session and yet it is very helpful and can be a turning point after entrenched positions have been reached in communication. The mediator will control the session and ensure that everyone has an opportunity to have their say and be heard. Whilst it can be tempting to leave a lawyer to speak, be prepared to contribute. If it is clear the parties cannot make progress during that time together, the process is flexible and the parties break into separate rooms with the mediator spending time with each separately and in confidence.

Mediation is an effective and successful process of resolving disputes. As in business, you often get out what you put in and time preparing will be well invested.

As well as a being a specialist Litigation Solicitor of over 25 years' experience and Partner at Franklins Solicitors LLP, Sarah Canning is a dual-accredited Mediator with CEDR (Centre of Effective Dispute Resolution) and Regent's University, School of Psychology and Psychotherapy. Both accreditations are approved by the Law Society as well as being recognised internationally. Sarah is a member of the Civil Mediation Council, an accredited NLP Master Practitioner and currently interim Chair of the Northamptonshire branch of the IoD.

Should you be involved in a dispute and wish to discuss your options, please contact Sarah on 01604 828282 or email sarah.canning@franklins-sols.co.uk

Franklins Solicitors