This commentary introduces you to alternative dispute resolution and then focuses on mediation and the application of mediation to resolve conflicts. Mediation can save significant time, money, resources, emotional toil, and physical toil on the participants leading to closure. Mediation is confidential, the parties make the decisions, the mediator remains neutral relative to the parties, if there is an agreement, the mediator writes up what the parties agreed to for closure. The terms of the agreement can be followed up legally after the session to ensure compliance with applicable laws.

Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution falls into two major areas. These are arbitration and mediation. Arbitration may be binding or not binding, but in every case the arbitrator is the decision maker in the case. Often there is a single arbitrator, but at times there can be a panel deciding. The other category is mediation. In mediation the parties make all the decisions. The process is confidential. The mediator facilitates the process agreed to by the participants and helps the parties to develop the facts, issues, emotion around the issues, and uncover interests. There are three types of mediation. These are evaluative, transformative, and facilitative. Each are briefly introduced.

Evaluative mediation

In evaluative mediation an experienced retired judge or attorney that is very familiar with the area of law in question provides a recommended solution after hearing all the facts and law from each side. Then given each position of the parties and the evaluative decision by the mediator, the mediator works with the parties to see if a resolution may be possible.

Transformative mediation

In transformative mediation, the mediator focuses on transforming the relationship between the parties. This is often used in family law. The focus is on having working relationships going forward. For example, in a divorce the focus may be on the children and what is best for them to help diffuse an otherwise messy divorce. The emphasis is on the relationship rather than the results of an issue. If the relationship can be healed, then working the issues may follow.

Facilitative mediation

With facilitative mediation the focus is on a particular problem or areas of concern. The mediator typically meets with both parties ahead of time to see if mediation might work. If the mediator believes this is possible, the mediator works with the parties to formalize the process, facilitate the process, and help the parties work together to develop a solution that is acceptable to both parties. If there is an agreement, the mediator writes up the solution of the parties. Many times the facilitative mediator uses transformative techniques to help the parties in the process. An example of a facilitative mediation is presented next.

An example of a facilitative mediation in business valuation

Initiating

The mediator meets with both of the parties ahead of time to determine if mediation may be appropriate and if so, who should be present, where, or how it may be held (virtually or in person), when and where the mediation may take place, and how the mediation will proceed. In a typical business valuation case the decision maker, the attorney, and the expert for each side is involved in the process.

Introduction to the process

After agreements have been signed for the mediation and with a second agreement if the mediation is virtual the mediator introduces the participants and the process to everyone. The mediator ensures the process is followed unless both parties agree to change the process. The goal is to have everyone be heard and to see if it is possible to find an acceptable solution by the parties.

Opening commentary

Each side presents opening statements of a given duration without interruption. The parties may share facts, issues, emotions around those issues, and interests. Often an interest is presented for closure and sometimes apologies are offered. One side may even ask the other side to tell me more about a particular issue or interest.

Facilitation

In valuation complex issues need to be explained such that not only the experts, but the attorney’s and the decision makers need to understand. This typically takes additional concentrated efforts by the experts with open ended questioning by the mediator.

Open ended questioning

During the joint session questioning by either side and the ability to state “tell me more” help clarify understanding. Often mediators take what one side says and translates what was said into lay or neutral terms to facilitate understanding. When there is an impasse, an experienced mediator may be able to ask questions to allow the parties to see the situation differently. This helps everyone focus on the problems.

Caucuses

Sometimes emotions run high facilitating the need for caucuses between the mediator and one side. These private meetings may allow one side to vent frustrations. A party may provide the mediator with additional insights the party does not want to share with the other party. When agreed to by the party the mediator may share the insight with the other party. This often can lead to greater understanding. For example one party may agree to a dollar amount, but may be open to the duration of payment.

Resolution

It is possible to have win-win mediations but most of the time the parties reach a resolution that each side can live with the result. Often both parties feel that they gave up too much. This is often indicative of a solution that is amicable going forward. Once this has been agreed to the mediator writes up the agreement for both parties. This ends the mediation.

Expected time frames

With in person mediations these can be a few hours to a long day. With virtual mediations the first session often is about a half hour to address administrative technical issues followed by an hour and half mediation. Following sessions are about an hour and a half. There may be as many as a half dozen virtual sessions, though a lessor number is more common. This process can and does save time, resources, emotional and physical toil, and provides closure.

Follow Up

It is my pleasure to be a Qualified Mediator with the Minnesota Supreme Court and provide facilitative mediations on valuation (primarily business valuation) issues (in spouse and out spouse) and with various issues with the IRS (how to avoid and how to work with the IRS). Although I am in Minnesota my clients are located throughout the United States. Please come back to me with your thoughts, concerns, or questions. I welcome the interaction.