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Mediation Isn’t Always About Money

Two large corporations entered into a contract to do business together. But, almost immediately, the agreement dissolved into disagreements, a growing dispute and, ultimately, a large federal lawsuit.

At the request of the federal judge, I was invited to mediate the case. It quickly became apparent that my mediation efforts were best spent trying not to settle the lawsuit, but to fix the original agreement that was causing so much ill will between the two companies.

As I told both parties at the onset, if this case is about money, we might as well go home because it will never be settled. The two sides were millions of dollars apart, and one company was offering nothing. That gap could never be bridged, in my opinion.

I pointed out that, obviously, they once wanted to work together – so why not revisit the original agreement and figure out what was wrong with it? If we could fix the agreement, the two companies could (1) work together as they originally envisioned and, (2) avoid hundreds of thousands of dollars in legal fees should they proceed with the federal litigation.

What followed was a one-day, 10-hour mediation marathon in which we literally went paragraph by paragraph through the original agreement. I asked executives and lawyers from each side to identify the paragraphs that were causing the problem, then offer new language that would eliminate the problem.

By the end of the day, we had produced a new term sheet incorporating the revised and agreed-upon paragraphs. We still had a second bucket of paragraphs which both sides agreed to change, but there was not yet a resolution on the language.

By the end of that week, we were down to one final, contested paragraph. If that could be worked out, the whole federal lawsuit would go away.

It took an additional six months and a new battery of attorneys, but a new agreement has been reached and the two businesses are back in business together, making money and avoiding what would have been a protracted lawsuit with legal costs exceeding seven figures – not to mention no guarantees of a favorable result.

Needless to say, I was very pleased with the outcome and so are the parties. It proved that sometimes mediation is about more than money. It’s also about common sense, identifying problems and their solutions, good faith and, most of all, what’s best for the business.

author

Charles Schneider

Charles Schneider, retired trial judge of 20+ years, describes the best mediation practices he's observed over the years. Charles Schneider, who is now of counsel for the Columbus, Ohio law firm Isaac Wiles, is immediate past president of the Columbus Bar Association and served as an Administrative Judge in Franklin… MORE

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