Getting Your Case to the Table

Overcoming the other party’s reluctance to mediate can be a problem in business disputes (as in other types of disputes). Here are some tech­niques to consider in getting your business case into mediation.

1. Contract Provision

If your dispute arises out of a contract that requires the parties to mediate, you shouldn’t have a problem. Your first step in a contract dispute is to check the contract for a mediation clause. These clauses usually appear near the end of the contract, under a heading such as “Mediation,” “Dispute Resolution,” or sometimes, mistakenly, “Arbitra­tion.” Even if the contract calls for arbitration rather than mediation, you can propose to the other party that you mediate first to see if you can mutually arrive at a solution, thus avoiding the risk that an arbitrator will impose a result one or both of you doesn’t like.

SAMPLE MEDIATION CONTRACT CLAUSE

For those in a position to think ahead, the best way to get your business's disputes to mediation is by adding a contract clause requir­ing the parties to mediate before going to court. Below is a sample mediation clause:

If a dispute arises out of or relates to this contract, and if the dispute cannot be settled through direct negotiation, the parties agree to try in good faith to settle the dispute by mediation before resorting to arbitra­tion or litigation.

You can make your mediation clause more detailed by specifying which mediation service the parties must use, the minimum amount of time the parties must spend in mediation, and how fees will be appor­tioned. Use this kind of clause only if you have a strong preference for a particular mediation service. For example:

If a dispute arises out of or relates to this contract, and if the dispute cannot be settled through direct negotiation, the parties agree to try in good faith to settle the dispute by mediation before resorting to arbitra­tion or litigation.

2. Invoke the Other Party's ADR Pledge or Policy

Hundreds of major American companies (and thousands of their subsid­iaries) have pledged in writing to try mediation as a first resort when disputes arise. This pledge, called the Corporate Policy Statement on Alternatives to Litigation, is circulated by a nonprofit group called CPR Institute for Dispute Resolution. It reads, in part:

We recognize that for many disputes there is a less expensive, more effective method of resolution than the traditional lawsuit.... In the event of a business dispute between our company and another company which has made or will then make a similar statement, we are prepared to explore with that other party resolution of the dispute through negotiation or ADR techniques before pursuing full-scale litigation.

If another party in your dispute has signed this pledge, you can remind them of this, and tell them that you expect them to honor their pledge and give mediation a try.

EXAMPLE: A small machine tool company and a major copier manufacturer had a contract dispute that looked like it was headed for court. The president of the tool company suggested that they try mediation. At first, the copier manufacturer said no. But when the tool company’s lawyer discovered that the copier company had signed an ADR pledge and pointed this out to its general counsel, the copier maker agreed to mediate.

To find out whether a company involved in your dispute has signed the pledge, ask the person you are dealing with or the head of the company’s law department. If you can’t reach anyone who knows the answer (or if you don’t trust the answer they give you), go to the website of the CPR Institute for Dispute Resolution, at www.cpradr.org. Click “ADR Pledges” to see the text of the pledge, plus a list of signatories.

In a few places, business have developed their own ADR pledges, sometimes at the urging of a local chamber of commerce or another business organization. For example, nearly 1,000 businesses have signed “The Colorado Pledge” committing themselves to explore mediation. To find out if a party to your dispute has signed a similar local or statewide pledge, try contacting the chamber of commerce or the bar association where the other party has its principal place of business. To find local chambers of commerce, go to the chamber’s national website, at www.uschamber.com.

IF YOU DON'T WANT TO MEDIATE

What if the other party demands that you mediate based on a mediation clause in a contract you have signed? Do you have to go to mediation? The answer is yes, but that's not a major commitment. Most mediation clauses commit the parties only to make a “good faith” effort to mediate. In real life, this means only that you must agree to go to the mediation, behave pleasantly, and at least go through the motions of giving it a fair try. It does not obligate you to agree to pay for the most expensive mediator, prepare an exhaustive premediation memorandum, confide to the mediator all your hidden agendas and business secrets, or help the mediator come up with settlement proposals. However, we urge you to keep an open mind about the process—you might find that it's more useful than you expected.

3. Invoke the Other Party's Attorney's Pledge

Not to be outdone by their business clients, more than 1,500 of the nation's law firms have pledged to discuss with their clients the availabil­ity of mediation and other forms of dispute resolution. Called the “Law Firm Policy Statement on Alternatives to Litigation,” the pledge is circulated by the CPR Institute for Dispute Resolution (see above). It states, in part:

(W)here appropriate, the responsible attorney will discuss with the client the availability of ADR procedures so the client can make an informed choice concerning resolution of the dispute.

If you are unable to get the other party to even consider mediation, ask your lawyer to find out if the other party's law firm has signed this pledge. If so, your attorney can remind the opposing lawyer of the firm's pledge to at least consider the use of mediation. To find out if the other party's law firm has signed the pledge, check the CPR Institute's website, at www.cpradr.org.

4. Invoke Government Policy Favoring Mediation

If your dispute is over a contract to supply goods or services to the federal government, you can encourage a federal agency to mediate by invoking government-wide policies favoring alternative dispute resolu­tion. Under the Alternative Dispute Resolution Act, federal agencies must appoint a “dispute resolution specialist” to develop policies for the use of mediation and other dispute resolution methods. Many agencies, including all branches of the military, have gone further and signed a government “ADR Pledge.” The Pledge says the agencies will use media­tion and related techniques to try to prevent and resolve disputes arising from outside procurement contracts.

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