Monday, April 5, 2010

A Tough Mediation with a Happy Ending

I mediated a very tough case this past week. Two parties who had done business many times over the last several years agreed to an equipment lease. Before performance, the lessee renegotiated the contract price, and the lessor agreed, but there was some dispute over the final price, and the parties didn't put anything in writing. After performance, the lessee used a variety of tactics to try to avoid paying at all, and the lessor sued.

The case went to binding abitration. I came in after introduction of evidence and just before the arbitrator was set to hand down a decision. The lessee argued that the contract was uncertain and unenforceable because the parties did not have a meeting of the minds on the lease price. The lessor denied this and claimed the full lease price.

The mediation was very highly charged. The lessee argued that the price demanded was too high and unfair. He insisted that the parties had not completed a contract at the time of performance. When I explained that I thought he was going to lose the arbitration, he became defiant, claimed poverty, made a low-ball offer, and insisted that he would not pay a penny more. The lessor also took a hard line, not wanting to accept a penny less than his arbitration demand.

We went through several rounds of negotiation. We explored the parties' interests and options for continuing to do business together. We discussed their risk tolerance and their desire to resolve the dispute. When we finally got down to the numbers, and both sides bargained hard, but made reasonable concessions to make a deal happen.

Each party ultimately agreed to compromise as a way of putting the matter behind them and avoiding further damage to their relationship.

This was a very tough, but rewarding experience for me as a mediator. It took much perserverance, cajoling, careful listening, evaluation, facilitation - basically every trick I know - but in the end I helped the parties resolve the dispute. I understand that the settlement funds have been paid already and that the parties have moved forward. In fact, they sent me this to show their appreciation for my work:

Two tough negotiators who put this mediator through his paces.

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