Guest Column

Legal mediation: Resolving confidential matters by private agreement

October 10, 2014
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Confidential and swift resolutions to private legal matters are paramount, especially when problems are solved, confidences are preserved, and long-term relationships prevail.

State-certified and trained mediators provide a formal structure and process for resolving legal issues by mutual agreement without public litigation.

Like cascading steps in a river, facilitative involvement can increase until a matter is resolved though a binding agreement with mutually agreed terms. Proactive legal assessment, private mediation and specialized arbitration are all options to initiate in lieu of, or in addition to, state or federal court litigation.

The best place to begin is on the top water, well before the falls. In the calm waters it is possible to spot the first ripple, find the source and fix the problem. Ripples in business, real estate and construction matters start from differing expectations among companies, employees, vendors, buyers and sellers.

Amplifying effects such as an economic downturn, changes in the law, industry regulations, rules and many types of unanticipated circumstances apply external forces that are sometimes out of the parties’ control.

Before financial and legal risk levels begin to rise and unpredictable currents start forming, plan ahead by consulting early with someone who is familiar with various legal waters and may know of potential options for a safer course.

Well-qualified legal river guides understand that industry professionals who assist with financing, auditing, insuring, indemnifying and consulting the parties have similar interests in quick and private resolutions.

As wave patterns surface, more experienced legal guides begin to navigate in anticipation of the increasingly turbulent waters that churn downstream. Multiple courses can be charted through specialized areas like business, real estate and construction law.

Especially prepared guides constantly study the currents and can spot small surface disturbances, knowing that large boulders, or other obstacles, may lurk unseen. The best ones steer clear well in advance to position clients away from potential downstream trouble.

If a dispute boils over to a formal demand or a court-issued summons and complaint, it is time to identify a trained mediator who can serve as a neutral and will provide the structure and process that will allow the parties to resolve their issues by reaching a consensus in a private agreement.

Mediation has advantages over litigation and arbitration because it is confidential and the parties retain control of the process and their rights — the endpoint is a documented agreement on terms that are mutually acceptable to the parties. Formal mediation agreements provide certainty and can be structured in many ways to meet the parties’ needs.

To help ensure a representative process, attorneys for all parties can be involved to explain various legal positions while recognizing their client’s interests and needs. No rights are waived or lost if an agreement is not made, and confidentiality is governed by statute and court rule. Any party can exit the mediation process at any time and allow the matter to flow to the next downstream stop: arbitration or litigation.

When choosing a mediator, consider a state-certified mediation professional that has industry-specific law practice with experience in arbitration and state and federal court litigation. This unique skill set keeps parities focused on industry-specific needs and interests while simultaneously evaluating the best- and worst-case alternatives that may be available if the matter continues through arbitration or litigation.

In litigation and arbitration, unlike mediation, the parties will cede control of the process and the result to the judge, jury, or arbitrator. If the parties prefer to cede decision-making control to an arbitrator, then the matter can be handled privately through contract-based rules. The selection of an arbitrator is critical because arbitration awards can be entered with the court and take the form of judgment that, for all practical purposes, cannot be appealed.

If early resolution attempts fail, then public litigation in state and federal courts remains an option, where the court rules provide the structure, process and forum for dispute resolution by a judge or jury with certain with rights to appeal preserved by law.

Even if a public lawsuit is filed in state or federal court, however, most courts will order the parties to attend some form of alternative dispute resolution, such as facilitative mediation, as part of the lawsuit itself. This suggests that private, pre-suit mediations are worth the upfront investment.

Ask any party that has barreled over the litigation falls about unpredictable results that can emerge from the rocks and mist below. Beware of bullheaded “guides” that charge directly for the falls, armed only with war stories of cannonballs and shipwrecks. Tell them that 98 percent of our generation settles before trial, which is a positive statistic for our community.

Don’t let the historical “bet the ship” approach to litigation pirate the truth: In unfamiliar waters most parties seek quiet harbors and smart solutions so their vessels and crews can sail again.

Steven K. Stawski, J.D, is owner of Stawski Law in Grand Rapids and specializes in real estate, business and construction law. He chairs the education committee of the Commercial Alliance of Realtors West Michigan.

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