developer_admin

Claude Amar* *Partner, Mediation & Resolution I President, Institut Français de Certification des Médiateurs I Paris, France and Véronique Fraser, Ph.D. *Professor for the Master’s degree in Conflict Prevention and Resolution at the the Sherbrooke University School of Law (Canada) Disadvantages of Deal Mediation? We have discussed above many of the advantages to using a deal mediator but there are nevertheless a few potential disadvantages which must also be addressed. Lack of information often leads to fear, a fear of the unknown, as has certainly been the case in terms of deal mediation. The disadvantages are very few but because very little is known about the process and written reports regarding the successes of deal mediation are still rather scarce, many people dismiss it as a waste of money and/or time. There may be a small grain of truth to this viewpoint. Perhaps the main disadvantage of employing a deal mediator is that it does not necessarily guarantee that there will be a deal. If no deal is produced, then each party will be out the cost of the mediator’s time and efforts, divided by the number of parties involved. But while this may seem like a disadvantage in terms of cost, there is a significant advantage attached which must be acknowledged. Despite the lack of a deal, the parties will have spent ample time discussing the many intricate details of their project and will thus leave with a better understanding of the other side’s needs and interests. This could be useful in ‘laying the groundwork for a future deal if the parties so choose’ (Neiman 2012, 4). As was mentioned earlier, some people may worry that engaging in such a process leads only to them exposing their ‘upper-hand’ so to speak and as a result they feel that they are weakening their negotiating position. This is a common misconception about the process of mediation which must be challenged. In reality, engaging in this process can lead to an increasing array of otherwise unthinkable options and helps to widen the ZOPA through transparency. It helps to ensure that each party’s interests are being met in the best possible manner. With an expertise in problem solving and integrative negotiation, the deal mediator can also help the parties to brainstorm to find creative ways to create added value. Such ways can include adding more negotiation topics at the table to allow for trade-offs, creating contingencies (e.g. based on market price or annual profits), prioritising interests, exchanging priorities and conceding on secondary interests, assisting the parties to a complex brainstorming process. Now that we have established the advantages (in Part I of the post) and disadvantages of the use of a Deal Mediator, let us discuss the qualities they embody. Qualities Of A Deal Mediator Deal Mediators embody several important qualities that set them apart from a typical negotiator. They Are Impartial This signifies that they are not allowed to take sides or to demonstrate any partiality, whatever the situation may bring. As a neutral and impartial third-party the mediator is there to hear each side’s concerns and to ensure that those concerns are heard and acknowledged by all involved parties without demonstrating favouritism for one side over the other. They are not swayed to one side or the other and are truly in the middle. This does not mean that they are inhuman and lack any emotion, it simply signifies that they learn to control their emotions, acknowledge any bias tendencies, and prevent those biases from manifesting in favouritism for one side or the other. personal interests do not hinge on the outcome of the mediation process. 2. They Are Independent The neutral has no ties to either one party or the other, nor is he interested in the outcome. To put it differently, the mediator’s personal interests are in no way tied to the outcome of the mediation process. His/her sole purpose is to assist the parties in engaging in a better transaction than would have been possible without their assistance. The mediator’s ultimate goal remains that of assisting the parties in reaching the best mutually-beneficial deal possible. Their independence certifies that they are remunerated for the hours they put in regardless of the outcome. They are not paid more for leading you to a solution or a signed agreement and this ensures that they will not force parties to sign a deal merely to increase their financial reward. 3. They Are Able To Uncover The Interests Of All Involved Parties As mentioned earlier, there is a difference between interests and positions. Fisher and Ury emphasized this point strongly in suggesting that parties in a negotiation learn to separate positions from interests. The mediator as a third-party neutral can go beyond asking the ‘What’ question to asking the ‘Why’ and ‘How’ questions: What do you want? Why do you want it? How can this need be met? The mediator is able in asking these questions to uncover the true necessities facing each party and to open up a wider zone of agreement which otherwise would have remained closed. This allows for more creative solutions to be proposed and for increased collaboration amongst parties. 4. The Deal Mediator Has No Opinion The Deal Mediator is also known as a deal-facilitator because their primary task is to facilitate the closing of a deal but they are not there to offer their opinions. That is what the counsels are for. Each party may bring whomever they wish to assist them in the mediation be it an expert, a broker, their attorney, or any other party they may deem useful. Those persons are able to offer whatever advice and opinions they like but as a neutral, the mediator’s job is not to offer opinions. The mediator is there to ensure that each side has all of the necessary information to allow them to create their own, well-informed opinions. 5. The Deal Mediator Defers The Decision-making To The Mediating Parties. While the Deal Mediator is there

Claude Amar* *Partner, Mediation & Resolution I President, Institut Français de Certification des Médiateurs I Paris, France and Véronique Fraser, Ph.D. *Professor for the Master\’s degree in Conflict Prevention and Resolution at the the Sherbrooke University School of Law (Canada) While mediation is indeed an excellent method for resolving on-going disputes, one can argue that mediation may prove just as useful, if not more so, in preventing conflicts before they arise. Although it is not yet widely used in this manner, a strong case can be made for the use of mediation not merely as an alternative to resolving current disputes, but also as a pre-cursor or preventative measure in the art of deal making. This paper aims to highlight the benefits of mediation in non-conventional areas such as deal-making and deal-management in order to encourage its further development and widespread use. Unfortunately, many people fail to realize that future problems could be avoided if a mediator were present during the drafting of a deal from the very beginning stages. In this manner, the mediator would act as a deal-facilitator as suggested by Schonewille and Fox. According to Stearn (2008), deal mediation is ‘facilitated negotiation, with the involvement of a neutral third party, of business transactions in which no dispute has arisen’. Usually the currently existing process of closing a business deal is more akin to a negotiation involving positional bargaining than it is a “win-win” optimal deal which benefits all involved parties in the best possible way. This is where a deal mediator or a deal-facilitator can prove useful. Schonewille and Fox’s (2011) research has shown that parties directly involved in a commercial negotiation can easily fall into many traps and pitfalls which could lead to a ‘suboptimal’ deal. These pitfalls include dividing value rather than creating value and parties sticking to their own bargaining positions rather than exploring options for mutual gain. As parties involved in such negotiations are often very inexperienced in proper negotiation techniques, they often end at an impasse or in cases where a deal is reached, opportunities for greater value-creation are missed. While such a deal may be just fine and seemingly satisfy the multiple parties involved, it is highly likely that the resulting deal is not the optimal deal that the parties could have reached. The job of the deal mediator in such cases is two-fold: their first aim is to ensure that a deal is reached (although this is not a guarantee) and the second aim is to ensure that whatever deal is reached carries the highest possible value for each party meaning that each party receives the maximum possible benefits from the deal to which they agreed (Neiman 2012). The key takeaway from these aims is the idea of the maximum-possible benefit for each side. The parties could of course choose to negotiate a deal on their own, with the assistance of their counsels, and could end up successfully closing a deal in which they are all seemingly satisfied. The main difference, however, in using a Deal Mediator or deal-facilitator is that their main goal is not merely in closing a deal, but rather in creating the best possible deal for all parties and ensuring that all involved parties have satisfied as many of their underlying interests as possible. In other words, the deal mediator’s objective is to create the best possible deal whereas parties’ councils aim to maximize the individual value for their client. The latter situation can sometimes lead to hard bargaining tactics and a distributive result representing parties’ bargaining power. Why is a Mediator Important in Deal-Making? As noted by Salacuse (2002), due to the modern-day climate, deals are becoming increasingly international, thereby involving parties from around the world who come from a variety of cultures and backgrounds and who approach each deal with varying negotiation styles. This cultural richness carries with it the propensity for cultural misunderstandings which can easily hamper the closing of a deal. A deal-facilitator or a Deal Mediator could be useful in avoiding any such misunderstandings and of clarifying any differing viewpoints that arise from a difference in backgrounds. Another advantage of a Deal Mediator lies in their thorough comprehension of a deal. If for instance the Deal Mediator were present from the very early stages of the drafting of the deal, they would possess a deep and thorough understanding of the negotiated agreement and would therefore be familiar with the intricacies of the deal. This would allow them to anticipate or handle any future disputes much more easily than a mediator who was not present during the initial stages. A deal mediator who has been involved in the opening stages will be better able to help the parties brainstorm and anticipate all potential areas of disputes. The deal mediator may also have a specific expertise in an industry and can assist the parties to anticipate areas of potential dispute. An example of this is the Disputes Potential Index in the construction industry (Construction Industry Institute). In referring to international Deal Mediators in the construction industry, Salacuse (2002) posits that their continuous contact with the parties and the projects leads to an ‘intimate familiarity with the transaction’. Additionally, the deal mediator can assist parties in tailoring specific dispute resolution processes to deal with each potential area of disputes pre-identified by the parties, this can include establishing clear lines of communication, standing neutrals, etc. With his expertise in dispute resolution processes, the deal mediator can help the parties to tailor processes to their specific needs and situation. A third advantage lies in the mediator’s ability to identify each party’s interests and to assist each party in devising solutions to fulfil those interests. Too often, parties enter a negotiation situation such as deal-making with very strong positions. These positions are stated in such a way that there is little room for manoeuvring and parties tend to hold tightly to these positions. The mediator’s job is to avoid positional bargaining by focusing on the interests