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There's an old saying that in a successful mediation both sides walk away unhappy. While compromise indeed lies at the core of mediation, we have devised a set of golden rules that a party and its legal counsel should follow to maximise the chances of a favourable outcome – or at least to walk away less unhappy than the other side.
Mediation is a guided negotiation in which disputing parties are aided in reaching a settlement by an impartial intermediary without decision-making powers. Mediation saves time and costs. Most importantly, it helps preserve business relationships.
As it is an informal process, there are no fixed rules to follow in a mediation. Instead, the process is determined by the mediator and the parties. But just because there is no formal taking of evidence or making of submissions does not mean the parties should just casually turn up at the meeting. Preparation is key.
So how do you become a mediation champion?
Having the right people at the negotiation table is perhaps the most important. A mediation is not a "lawyers only" affair. It is critical that the relevant personnel of the party attend. This should be people who are authorised (at least within certain limits) to make decisions and are sufficiently acquainted with the matter. If you lack the former, the other side may think you are wasting their time. But be careful with members of the project team who could later be called as witnesses, as their participation in the mediation may "contaminate" them. If such people need to be present, agree on this with the other side at the beginning of the mediation.
Imagine the ideal outcome of the settlement negotiations as well as what would still be acceptable. Consider what is realistic. Make sure you also think about potential solutions outside the immediate claims in dispute. Is there a business solution which can be found?
A good command of the factual background and applicable law of the case will boost your negotiating position and give you a competitive advantage. Knowing the evidence will often make a decisive difference. Pre-analyse the strengths and weaknesses of your case and have an opening statement prepared to set the tone and steer the discussion in a favourable direction. When discussing procedural aspects, consider in whose favour time is working.
If you can, make the first offer. Anchoring is a well-known psychological phenomenon and you will be surprised how effective it is even with seasoned professionals. Be careful, however, when the sides are too far apart. An insulting offer will more often than not lead to a collapse of the negotiations. In such cases, try to find procedural common ground. Perhaps certain facts which are disputed can be determined by a jointly appointed expert, which can then be a catalyst for further negotiations.
Assert your position clearly and do not be afraid to use leverage, if you have it, but remain constructive and always avoid coercion. Other dirty tricks, such as lying or deliberately misleading the other side, hardly ever work and may well jeopardise the entire process as well as the underlying business relationship, so steer clear of these tactics. Avoid attacking and accusing the other side as this will only add fuel to the fire. Without wearing your emotions on your sleeve, openly show your genuine interest in finding an amicable solution and in hearing the other side's story, and express empathy.
Confidentiality is key for the parties to openly discuss their position. If not institutionally guaranteed, make sure a confidentiality agreement is signed between the parties at the start of the process. But beware of a double-edged sword: what you will learn during the mediation may not be admissible in court should the talks fail. So tread carefully when deciding what you need to discover from the other side.
The presence of a mediator is what makes mediation different from any other kind of negotiation, so make sure you get the most value out of them. The mediator is not there to decide on the matter but can greatly influence the process. Encourage separate meetings between the mediator and each party and the mediator's active role when challenging both parties' cases. Sometimes you need to hear it from a third party to believe that your argument is not as good as you originally thought.
authors: Bojan Brežan, Tjaša Geč
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