Overview
- Conflict is not necessarily negative, it is the symptom of a problem that has not been taken care of or, a routine which is no longer relevant. However, if not properly handled, most conflicts rapidly create negative consequences. Relationships break down and partnerships collapse.
- Time, resources and money are wasted, people are emotionally and mentally hurt and even physically hurt.
- It is therefore, of the highest importance that conflicts are prevented, managed and solved. That is the purpose of mediation.
What is Mediation?
Mediation is a dynamic, structured interactive process (through a dialogue) where a neutral third party assists disputing parties in resolving conflict through the use of specialised communication and negotiation techniques, without resorting to court or to arbitration centres. It is an alternative dispute resolution process to resolve conflicts between parties with concrete effects.
Mediation helps the disputed parties (such as shareholders / partners / franchisors / franchisees) manage their differences in a voluntary and consensual manner to reach a settlement.
What is the Mediator’s Role and what are the Mediator’s Traits?
The mediator facilitates better mutual understanding between the parties so that they can build solutions on a basis of shared agreement and fairness.
Role of the Mediator
- The Mediator must initiate the conversation and open a dialogue between the disputed parties in the hope that it will be of high quality.
- The Mediator must be neutral and must take into consideration the interest of both parties. c. The Mediator must not impose pressure on the parties. This is a voluntary process where both parties must agree to the rules of mediation, three way conversation and solutions voluntarily and consensually.
- The Mediator facilitates a better mutual understanding of the parties, so that their differences in their interests, their motivation and needs are better comprehended as a result.
- The Mediator works to achieve fairness in the consideration of the parties’ interest.
Traits of a Mediator
“Traits of a Mediator” are the following:
- Alertness
- Neutrality
- Fairness
- Impartial
- Patience and Tact
- Credibility
- Objectivity and Self-Control
- Adaptability
- Perseverance
- Appearance and Demeanour
- Initiative
- Confidentiality
The Advantages of Mediation
Empowerment
The most important advantage of mediation, amongst other advantages, is that it empowers the parties in their attempt to settle their conflict. Parties may leave the mediation process anytime.
This is the fundamental feature which distinguishes mediation from arbitration or any judiciary system. It is consensus. Each party has a veto power until the very end and hence the parties feel safe.
Agreement
A deal will be found only if all parties agree, and because the solutions have been accepted by everybody. Hence, implementation will become smoother, swiftly and in good faith, especially in business disputes between shareholders or in franchise deals.
Time-effective
Mediation is time-effective alternative dispute resolution process. It doesn’t take ages to launch and complete mediation.
Cost-effective
Mediation is cost-effective alternative dispute resolution process. It is less to pay one mediator for a shorter period of time than two lawyers for a longer period of time.
Flexibility
Mediation process is flexible and it enables the parties to brainstorm and imagine innovative solutions, and hence the latter will enable mediation to generate inclusive agreements addressing all dimensions of the problem, and this exclusivity will reinforce the sustainability of the deal.
Healing Relationships
Mediation helps repair the relationship between the parties whereas this hardly exists in court. Business partners may need to work again together in the future, and hence interpersonal dimensions are so important.
Confidential
Mediation process is confidential. This is a very important advantage of mediation.
For instance, the business partners would not want / need their competitors to know the solutions they agreed to in order to resume a partnership or to resume a franchise deal.
Method of Mediation
There are six steps in a mediation process, as follows:
- Introduction
- Clarifying the facts
- Exploring the core motivations
- Exploring possible solutions
- Getting a commitment
- Conclusion of the process, drafting the settlement agreement and getting it signed by the parties.
It is advisable to agree to mediation in writing between the parties from the outset and it must be clearly mentioned in the memorandum & articles of association and/or shareholders’ agreements
and/or partnership agreements between shareholders and/or partners, in franchise and master franchise agreements between franchisors and franchisees an any other types of agreements, as a first step prior to arbitration and/or court proceedings. The parties shall agree that in case of any
dispute between them, the matter shall be submitted to mediation to be negotiated and resolved by a mediator to be selected by both parties.
Mediation could also be agreed to between the parties once the dispute takes place if all parties agree to do so at this point.
If you need more information on mediation and/or of you have a commercial dispute, you may contact us to info@ambitionlc.com
