An efficient business mediation process
Adversarial system of adjudication has its own pros and cons. While the impartial judiciary and the detailed adjudication of the nitty -gritty of the issues involved are some of the highlights of the adversarial system, we see, on its flip side, various factors such as time, mounting costs etc.
Alternate Dispute Resolution or stated differently, resolution of disputes outside Court became increasingly popular. Mediation is and has become one of the fastest growing ADR methods.
Mediation is a process where the mediator, an external person who is impartial to the parties to the dispute works and engages the parties to find a mutually acceptable solution. While the definition on the face of it may look simple, it must be borne in mind that mediation is a lively, structured process that carries the confidence of the parties to it and finally ends in a solution that is thumbs up to both. Unlike in an adversarial system, there is no complete loser in a mediation process.
Mediation has, over the years, come to be accepted as a very viable alternate dispute resolution process. The procedural laws of various countries have made it mandatory to try mediation. For example, the family laws of India make mediation mandatory. The civil procedural code in this country also recognizes mediation as a form of alternate dispute resolution and provides amongst other benefits refund of court fee.
In the context of business and trade, mediation is of substantial import. The resolution of business disputes through mediation is not new and has been in vogue for quite a long time. We may here notice that in business, the significance of mediation is that it not only puts an end to the impasse but also augurs well for continued relationship between the parties. It therefore helps in strengthening the bond and helps the parties to arrive at common sense solutions so that their business interests continue to be protected. The crucial aspect of mediation is that the mediator cannot impose a result on the parties. Parties, throughout the course, retain their control to make decisions. Though moderated by the mediator, the parties retain control over the process. Further, mediation is a voluntary process where the parties can withdraw at any time though in an effective mediation, the chances are unlikely.
Mediation also offers an opportunity to the parties to speak their case while ensuring confidentiality. The autonomy of decision-making, voluntariness, fairness and confidentiality makes mediation a risk free process. With the focus on non-coercive and consensual process, mediation ensures maximum participation of the parties in resolving the conflict. More pertinently, mediation looks at the future. It does not ignore the law but rather reckons the same so that the parties are well aware of the pros and cons of where their legal stand would take and needless to point out that time and other allied factors involved.
Once an agreement is inked between the parties, the solution becomes enforceable. In India, statutory recognition is provided and it is deemed to be a decree of the Court.
Mediation process involves various stages. To dwell in brief, the initial phase is the commitment to initiate a mediation process with at least one of the parties. With both parties getting convinced, the mediator gets on to the job. The mediator then prepares the ground for mediation by reckoning factors included power balance, information exchange etc.
As it gets into the mediation, we have at the receiving phase, the mediator holding a private meeting with each of the parties. Here he takes stock of their needs and clarifies the doubts whereby laying the foundation for the mediation session. Once the doors open, the parties make their statements. The mediator sees to it that the parties are encouraged into dialogues. He holds meetings with the parties either together or individually where the positions of the parties that are more than often rigid are viewed from another perspective and their interests get cogently defined. Thus an agenda for the session is worked out.
On the basis of the above, next is the exploration and probe phase. Depending on the process selected, meetings are held with all the parties present as also confidential meetings. The process, it may be noticed, is dynamic where it becomes possible to create an atmosphere of trust and understanding. The needs and interests are worked upon and the blockages are overcome. Risk analysis is performed so that the parties are able to know the best alternative and the worst alternative. Keeping in mind that the problem and the solution both belong to the parties, possible agreements are outlined.
The parties conclude the issue themselves. What emerges is a solution at the consensus of both the parties. Negotiations are made so that the parties are able to finally veer around on a pragmatic course leaving behind their hardened stand. They ink an agreement that is respected and functional. The stamp of approval is given by all the parties to the agreement and from where they move on. Here the highlight is that mediation is a process that even enables the parties to chalk out a strategy if there is no definitive solution. While the main issue could be solved, the other issues could be left open that the parties can pursue without any more heartburn. Uncompromising issues could be pursued without any emotional turmoil.
We may notice that the mediation process concerns three major aspects. It takes stock of the personal, business and legal dimensions of any given issue. The three aspects are of substantial significance. While the commercial angle includes factors such as finances, technical, labour etc the legal dimension complements the commercial angle and covers the legal aspects of the dispute such as compliance with the laws, legal options etc and this will be a factor that sets the frame of the final agreement. Personal dimension is a key part of the process. Here we may notice that business negotiations and mediation are nevertheless physiological processes where a high degree of emotion is reflected more particularly when the parties stand at unequal bargaining powers.
The role of a mediator is not a mere facilitation but goes beyond that. He manages the process and therefore it is important that he acquires various skills. He should listen actively to get into the crux of the issue consistent with the emotions reflected during the course and must be interactive so that he puts the rights questions to change the perspectives of the parties. The emotions, feelings and perspectives are therefore to be paraphrased that ensures that the parties are heard on their point. An early paraphrasing goes a long way in preventing negative escalation. The parties can thereafter confirm their differences without further insisting on going into the issues.
Reframing or reformulation in a positive way, this communicative technique helps the parties shift from their positions to their interests. The mediator works with the emotions of the parties, observes their body language and keeps a constant check on the balance of power.
Once it is summarized where the essential facts are outlined and pin point the issues that have emerged, the attempt is to distill what has been said to what arrive at what is important on moving forward whereby the situation moves from garbled to clarity and from the past to the future.
Risk analysis and assessment is done where the parties re check their position as to what is the best alternative to a negotiated settlement and the worst alternative to a negotiated settlement. Here the parties fundamentally realize the consequences of loosing the opportunity to settle and get themselves aware of the consequences in the event of a failure to get the process through. They also evaluate the best alternative to a negotiated settlement. Here they focus on the realistic parameters of a dispute discussing the relative merits of their case in law, the consequences of the costs, the time spent in the litigation at various levels etc. Here the parties realize that mediation is the best course to sort out the issues and move forward for finding a solution.
As indicated above, creative solutions are to be found with the junction of the parties. Mediator assists the parties who come forward with various solutions. The options are generated jointly consistent with the problem definition and the needs of the parties. Mediator considers the various options and only those that have not been discarded by either of the parties.
With the possible solutions in place, comes the stage of negotiation, as the parties will have to zero in on a solution. Here, we may notice that the process is akin to a conflict where the parties bargain for their interests. Effective negotiation takes place using the various techniques where the parties finally end up in taking their share of the pie or move towards a value added solution where the size of the pie is increased.
With the consensus in place, the mediator then shifts to inking an agreement between the parties. The same is implemented and carried to fruition.
Hence we may see that the mediation process involves the role of the parties and their representatives in mediation. While the role of parties include amongst others that of being the central negotiator to a creative searcher of solution, the representatives also don their roles such as diplomatic, consultative, assisting etc.