Originally from Dispute Resolution Journal

Donald Lee Rome, an experienced commercial lawyer, says that business people looking for a principled and fact-oriented basis to resolve “B2B” disputes should consider mediation first as a vehicle to achieve that goal, provided that their counsel and the mediator understand what the business needs and objectives are. Rome tells business people how they can tailor the mediation to meet their business goals, highlighting the issues that have to be decided, such as when to mediate, the selection of outside counsel, the stumbling blocks to settlement, and more.

I was asked to write a chapter on business-to- business mediation for a new book on the mediation process because of the recognition that mediation has a tremendous role to play in resolving commercial disputes between businesses. (This article is adapted from that chapter.*) Corporate counsel have already voted that mediation is their favorite dispute resolution process (as reported in a survey several years ago conducted by the Cornell Foundation for the Prevention and Early Resolution of Conflict and Pricewaterhouse Coopers). The reason is that business entities are uniquely suited to take advantage of the best that mediation offers—the highly favored “win-win” result that is controlled by the parties, not a third-party neutral, such as a judge or arbitrator.

For many years, litigation was the only dispute resolution method available when traditional negotiations failed. As a consequence, business people reluctantly entered into unsatisfactory settlements simply to avoid the inevitable waste and uncertainty inherent in litigation. Today, that is no longer the case.

In recent years, many companies have embraced mediation to fill the gap between failed party-to-party negotiations and litigation. This trend reflects the recognition that a trained mediator can help the parties reach a settlement that they could not reach themselves. Business mediation has been so successful that many large companies have significantly reduced the amount of money and time spent on litigation. Many corporate counsel and members of their staff have become expert users of the process as well as leaders in the ADR field. Many write and speak about mediation, serve on the board of directors of ADR organizations, and are mediators themselves (naturally, only in disputes not involving their employer). General counsel who have experience in mediation train lawyers in their legal department and the company deal makers to understand and use the process. They also expect outside counsel to fit into the company’s ADR culture.

Not only large companies, but also medium and small businesses are adopting mediation as their dispute resolution mechanism of choice, or at least the first step in a ladder of dispute resolution processes. One reason is that many government entities have incorporated mediation as part of their conflict management programs, and they require the companies with which they contract for defense, construction and other purposes, to agree to use mediation should a dispute arise on a project.