Mediation as a way of Resolving Partnership Disputes
Business partnership is like a marriage. The partners are like husband and wife who are bonded together towards a common goal - in the case of the partners, to run a business and raise profits. It requires understanding and cooperation. Nevertheless, both partners should recognize the limitation of each.
Disputes can cripple the entire business as they can create frustration between the partners that neither partner cares what happens to the business. If the dispute is not resolved quickly it can deplete business resources and focus. Mediation is one of the processes in alternative dispute resolution. It is a more structured process than conciliation. In this process a neutral person facilitates the meeting of the parties so they may reach a mutually acceptable solution to their problem. It is a voluntary and confidential process that can result in a binding agreement.
Advantages of using mediation include producing lasting agreement, the negotiation is facilitated, the parties control the outcome, and it is less expensive, preserves the relationship between the partners and produces better result. On the other hand, drawbacks include:
- Difficulty in keeping objectivity as partners can often carry power-plays from their own relationship into mediation.
- There is no guarantee of an end to the dispute
- It can be abused
- Time and money can be lost if the effort is unsuccessful
- There is no way to force the other party to mediate
The mediation process include the introduction process where in the mediator describes the process and their role, gathering the pertinent information, identification of the issue, gathering possible solutions and preparing the agreement. Once the partners have reached an agreement, the mediator or the partner’s lawyers may record the terms of the agreement and have their lawyer review the agreement before signing it as a signed agreement may enforceable as a contract.
As the success of mediation depends on the willingness of the partners to negotiate and work out a solution, it is always important that before starting the mediation both partners should be aware of each others interest and think of the possible solutions. Remember though that a mediator is different from a lawyer. A mediator is a neutral person specifically trained in facilitating the process of dispute resolution and assists both parties while lawyer represents a party in mediation and provide them legal advice. Nevertheless, the combined effort of the mediator and the lawyer help ensure that the partners enter an agreement that is in their best interest and based on informed decision.
