Mediation – Stick to Your Primary Objective

I recently mediated a pre-litigation dispute regarding termination of a service agreement. The terminating party contended that it owed less money than the service provider was seeking upon termination. In my pre-mediation communication with the service provider’s attorney the attorney made clear that his client’s primary objective was to incentivize the terminating party to continue the business relationship. With this goal in mind, we mediated the parties’ dispute.

After hearing from both sides, we began the fun part of the mediation, seeing how the parties could resolve their dispute. When I spoke with the service provider, the service provider suggested two pathways to settle the matter. The first pathway involved various deal points to entice the terminating party to enter into a new service agreement. The alternative pathway was the dollar amount the service provider believed was necessary for it to avoid litigation. I made clear that the best way to resolve the dispute was to determine if the parties could reach agreement on a new service agreement. Doing so would certainly be challenging, but I strongly believed that giving the terminating party two alternative choices to settle the dispute would frustrate any chances of reaching agreement.

The service provider took my suggestion, and we spent an entire day focusing on various deal points to secure the parties’ future business arrangement. The deal points were complicated, but the parties reached agreement. Had the terminating party been offered the alternative approach that would have allowed it to terminate the agreement upon payment of a fee, the parties would not have reached an agreement. By focusing on its primary business objective, the service provider not only achieved its goal, it also was able to resolve the dispute and avoid future litigation. This mediation provided a good lesson: While it is always a good plan to have alternative approaches in mind to settle a dispute, it is important to prioritize one’s goals and only consider alternatives approaches after the primary objective has failed.