What Commercial Mediators Can Learn From Divorce Mediation

What Commercial Mediators Can Learn from Divorce Mediation

By Kristofer Michaud

Family mediation evolved separately from civil and commercial mediation because it addressed specific needs and concerns, and faced different challenges. Unlike in civil mediation, where the subject of mediation can be any claim traditionally litigated in tort or contract, family mediation deals chiefly with dividing marital assets, determining child custody and visitation, and dealing with the emotions that go along with the transformation of an intimate relationship. Some have argued that “family mediation” is itself a misnomer — that what we’re really talking about is “divorce mediation.”

But I would argue that the term “family mediation” is actually quite apt when, as in the vast majority of divorces, children are involved. The use of the word “family” acknowledges that we neutrals are in the business of helping parties renegotiate the terms of a relationship that will persist in some form, even after the parties are no longer living together and their material assets are divided.

When civil mediators consider whether to apply the strategies and insights of family mediation to commercial disputes, they ought to consider the extent to which the future relationship contemplated between the parties more closely resembles a co-parenting relationship or the “clean break” of the childless couple. If it’s the latter, then the mediators to the dispute would probably not have much to gain from taking a “family mediation” approach. But few business relationships today are truly “childless,” and many of them are forged in “small towns” like the internet, biotech, and energy industries that each have their equivalents of PTA meetings, churches, and community tennis clubs. The business world is shrinking, and “exspouses” will often have to raise their kids together, among mutual friends and new, existing partners.

A couple that wants to resolve their disputes without splitting up calls a family counselor, not a family mediator. Family mediation, therefore, is typically triggered by an action for divorce – the contemplated severing of the most intimate of emotional bonds. It is hard for parties to be objective in such a case. Subjective feelings of participants can lead to bitterness and enmity, or can be channeled into magnanimous gestures of conciliation. Due to the emotional and psychological issues at play, most family mediators are trained mental health professionals, whereas most civil/commercial mediators come from a legal background.

Like family mediation, civil mediation is most often triggered by the highly-contentious act of litigation. Emotions will also run high, with one side or both feeling egregiously wronged. Former Apple, Inc. CEO Steve Jobs was quoted by his own authorized biographer, Walter Isaacson, as saying, “I’m going to destroy [Google’s] Android, because it’s a stolen product. I’m willing to go thermonuclear war on this… I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong.” These are hardly the words of a pure economic actor! Family mediators (and most divorce attorneys) will instantly recognize Steve’s language and the emotions behind his words. This dispute is not all about the patents, any more than a divorce is “all about” the house or the car.

Family mediators have noted that parties typically de-prioritize positions – even the “bottom-lines” that ostensibly brought them to the table, like asset division and child custody arrangements. Divorcing couples fear that litigation will force them to behave in a negative and destructive manner that is inconsistent with their values and make them feel even more ashamed and alienated. In choosing family mediation, couples are attempting to preserve a civilized relationship even as they fortify a sense of their own dignity and autonomy. In family mediation, time is not treated as a scarce resource: Consensus is reached through joint sessions over a course of weeks or months, as opposed to hours or days in civil mediation. Unlike in civil mediation, law yers are rarely present in joint sessions and private caucusing is discouraged. Evaluative and prescriptive techniques are scrupulously avoided. Facilitative approaches are most common, but there is a growing recognition of the need for transformative techniques to address emotional issues and perceived power imbalance.

There is a right way and a wrong way to transform a conflict, however. Skilled mediators never assume that the louder, more stereotypically “masculine” party feels more empowered than the calmer, more stereotypically “feminine” party. The inexperienced mediator might feel that the climate for mediation would improve if the more outwardly aggressive Steve Jobs were to be “taken down a peg.” This is precisely the wrong type of “transformation” to attempt. Overt egotism is often a sign of weakness. Enhancing a party’s confidence makes them more responsive to the ideas of their adversary, creating a virtuous circle.

Commercial disputants are often seeking evaluative mediation, but this can exacerbate existing power imbalances if the mediator fails to notice, or actually misdiagnoses them. This is more common than we would expect in civil mediation, because power in the business world is often as subtle and multi-faceted as the power dynamic in a spousal relationship. Power over home life can be just as formidable as economic power, and Apple’s mastery of the smartphone and tablet spheres may be evenly matched by Google’s dominance in search and advertising. A skilled mediator would not assume from Steve Jobs’ aggressive language that the balance of power was necessarily tilted toward Apple. Employing the lessons of family mediation, he or she would be able to read the situation to pick up on Steve’s deep emotional needs, and address them in a way that transforms the relationship and the discourse. Companies, like families, need to address the feelings engendered by prior behavior in order to rebuild trust and move forward.

The challenges of applying “family mediation” techniques to civil mediation, however, are many. Most proponents of family mediation assume that enhancing selfesteem through cooperative action is more important to disputants than actual problem-solving, or satisfying the needs and interests that ostensibly brought them to mediation. This is not the case with corporate clients, who are pre-disposed to positional bargaining and obtaining an equitable solution at a minimal cost. Stakeholders rarely take into account the long-term impact of failure to address emotions. It is assumed that corporations hold no grudges, and that when it makes good business sense for the parties to work together again, the past will quickly be forgotten, especially if mediation produces narrowly-prescribed solutions on a case-by-case basis. Moreover, corporate stakeholders won’t tolerate weeks or months of soul-searching in joint sessions; they want the confidentiality and efficacy of private caucuses conducted over a matter of hours or days.

For parties to a business dispute, the negative emotions that will be dredged up at trial barely register as a concern – they are thinking primarily of the pure economic cost of dispute resolution, and the likelihood of vindication. In mediation, company representatives may want to probe the record to persuade the mediator to evaluate the underlying issues of the case and assign blame. While parties to commercial mediation may welcome an elicitive/facilitative approach in the beginning, they will most likely lose their patience as the self-imposed “deadline” approaches and may seek to adopt a directive/evaluative approach based on the mediator’s knowledge of the facts of the case and of the law. The “family-style” mediator will struggle with these expectations.

A hybrid form of family/commercial mediation will be most attractive where an intimate business relationship becomes unbearable for both parties due to issues that are not being addressed, but where the costs of “walking away” from the opportunity or relationship are too great, such as the renegotiation of employment contracts. Non-compete clauses are common in specialized and high-tech industries. These clauses are designed to limit employee mobility by preventing highly skilled employees from switching jobs, but they also interfere with companies’ efforts to replace valuable employees. In cases where the employee is dissatisfied due to simmering resentments with his employer, the result is a stalemate. Rather than force an employee to come to toil away in a work environment that he or she is not fully invested in, the parties will need to work together to develop a solution that addresses both sides’ material and emotional needs and allows both to feel respected going forward. Family meditation has a wealth of knowledge and expertise to offer in cases such as these.

In the end, “family-style” mediation will be most appropriate where, as in a divorce, a continuing relationship is necessitated by a compelling mutual interest (in family mediation, the role played by the children). The BATNA of discontinuing the relationship completely must be unattractive to both sides. This is often the case when there is a joint project that must be completed to satisfy a shared client or third party – like a dispute between contractors and subcontractors in a large construction project – or in cases involving the mutual exploitation of intellectual property or unique expertise through cross-licensing or exclusivity contracts.

Apple, Inc. and Google enjoyed an especially-close business relationship in the first decade of the 21st century. They built great memories and great products together, and their “children” are still growing up. In its second decade, the relationship entered a contentious phase as Android chased after iPhone’s market share, and Apple filed a plethora of patent infringement lawsuits against Google. Nevertheless, in the industry these two great American businesses share, a “clean break” is impossible, and a little “family mediation” early on may help smooth out those awkward moments when they bump into each other at Davos.


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