Play for a win-win: making a case for early principled mediation in business disputes.

• Author: Haley, George M.
• Position: MEDIATION

One of the great costs to businesses everywhere--including in Utah--is the increasing cost of litigation. Changing the approach to resolving business disputes by taking the finger off the litigation trigger could make a huge difference for Utah businesses. When a commercial business dispute arises, it makes good business sense to begin a resolution with principled mediation at the beginning of the dispute, rather than mediating the case after the close of discovery and before the trial begins.

WHAT IS PRINCIPLED MEDIATION?

Principled mediation is a mediation philosophy that uses the services of a facilitative mediator to help parties identify their common interests in finding a solution to their dispute. It focuses the discussion on finding a rational business solution to the problem by looking for common ground or mutual gain. The mediator engages the parties in a realistic assessment of the merits of the facts and the law as applied to the situation. Both parties work with the mediator to find a rational solution that is likely to last, as well as to preserve the existing, valued business relationship.

Principled mediation is an alternative to the more typical "positional" method of mediation, where the parties use the mediator to move the parties from two extreme positions toward a compromise in the middle, sometimes called the "mediation dance." Each side makes a series of small compromises that inevitably ends in a middle position in which both parties typically feel unhappy because they gave or lost too much. Invariably, the business relationship between the two parties becomes a casualty of the process.

ATYPICAL SCENARIO

The current traditional litigation paradigm begins when Party A receives a letter from Party B threatening litigation. Rather than meeting with Party B to try to solve the problem, Party A hires a litigation lawyer--usually the biggest, baddest junkyard dog available. In-house counsel immediately writes preservation/hold letters to all conceivable custodians of documents who might have "relevant" information. Litigation counsel and in-house counsel draft a nasty response letter that escalates the animosity and ramps up the lawsuit, which is then filed. The complaint contains hyperbolic accusations, further escalating the tension. When the respondents draft a "hard-hitting" response, the litigation takes on a life of its own.

That is only the beginning. Initial disclosures are drafted, both sides exchange onerous...