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A Med/Arb Case Where Arbitration Proved Unnecessary

A pair of lawyers contacted us with a long-term marriage that was moving along on the traditional litigation/negotiation track, when one of the lawyers suggested that they try mediation. We suggested meeting with the lawyers on a no-charge basis to sit and try to develop a process that would work well for them and for their clients.

When we met, we inferred that both attorneys shared the desire to bring the case to an end outside of court, whether or not they could reach an agreement in mediation. We suggested a "med/arb" process, whereby we would attempt to work with the clients and their counsel in a long session with lawyers participating directly, as the first step. The lawyers suggested that if the mediation did not succeed, it might likely be because of difficulties relating to the value of the family business, to which the parties could not agree and which presented both financially substantive and emotional issues.

We suggested an approach whereby one of us would work with the parties and counsel in the initial mediation phase of the case, leaving the other LDRC principal outside of the mediation communications stream. We did this because step two, absent a mediated settlement after the initial effort, was to have him hold a hearing and decide for the parties what the business value was, as a means of clearing away this difficult bone of contention. Phase three, would bring the parties back to mediation, with the business value now fully reconciled, to try mediation one more time; this time at the parties' election, in a co-mediation model or with the original mediator alone. Ultimately, the parties agreed, that any contested issues that remained at the end of the phase three mediation would be decided by LDRC, in binding arbitration.

In the end, the parties and their counsel decided to deviate from the process outlined above, and bring in both LDRC principals into the initial mediation process, with counsel fully participating. Two full day sessions, which included substantial but informal work on the business valuation question, resulted in settlement of all terms, leading to the parties' uncontested divorce judgment.

NOTE: THIS CASE STUDY IS BASED ON A COMPOSITE OF ACTUAL LDRC CASES BUT THE FACTS HAVE BEEN ALTERED TO ASSURE THE CONFIDENTIALITY OF OUR CLIENTS.