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 to assist the parties in finalizing a transaction and walking away with a deal, he/she is not allowed to pressure or force either party into signing a deal against their will. The mediator is not allowed to make decisions for either side as that is the job of the mediating parties. What the mediator will do is to directly address to all parties questions and concerns that they themselves will either fail or not dare to ask each other. As an observing third-party the mediator has the ability to bring up very difficult yet critical issues that are key to closing a good deal but that may have been left untouched by the parties for fear of jeopardizing a potential deal. The mediator has the power and ability to suggest creative solutions (without mandating that they be accepted) which the parties may have overlooked; they are able to give the parties a chance to consider options that they may not have generated alone. In this way, the ZOPA opens up, as the pie may be enlarged, and the likelihood of a successful deal increases. The main point here is that throughout the process, the power to resolve the dispute remains entirely in the hands of the parties. As the mediator cannot make final decisions for the parties, it is ultimately their responsibility to devise a solution and to agree to said solution.
Some of the tasks of a Deal Mediator, as outlined by Schonewille and Fox include:
– Managing the negotiation process;
– Ensuring that the deal is realized and on terms to which all parties involved can agree;
– Preventing and, if necessary, resolving, disputes during the negotiation process and at a later stage during the implementation of the negotiated outcome.
It is imperative to remember that while a Deal Mediator’s tasks may sometimes be evaluative in nature, they are not to be involved in terms of substance. That must be left to the parties and their counsels. Furthermore, mediators can add value to a negotiation in which significant power differentials exist. In these cases, the mediator helps to neutralize the effects and to level the field for all involved parties. By helping the parties to identify their needs and interests rather than stall on their positions, the parties will be able to leave the room with a more beneficial, balanced and sustainable transaction.
Inevitably the question remains: Why do we need this person? Why should we pay this “third-party neutral” for a dispute that does not even exist? To these questions the answer according to Mr. Armes is quite simple: think of this person as your insurance policy. In his words, ‘the single best way to resolve conflict is to prevent it’ and that is exactly the purpose of the deal mediator. The costs associated with conflict resolution and any other alternatives are far higher than the cost of employing a deal mediator at the beginning stages. As the saying goes, ‘time is money’ therefore the less time spent in cleaning up a conflict, the more money is saved. Additionally, a good deal mediator will encourage open dialogue and help foster increased communication between the parties, thus leading to a stronger working relationship that will hopefully carry through the entire project. Therefore, although deal mediation is not as widely-used as it perhaps could be, there is a strong case for its future usage in a variety of industries from construction to sports to healthcare and pharmaceuticals. Deal mediation is about more than merely closing a business deal- it is about making better deals that last longer and satisfy all of the parties’ interests and let’s face it, who can say no to that?