Mediation offers a less formal and more efficient process for resolving business disputes than conventional litigation. With the efforts of counsel and the mediator, the parties may be able to achieve more creative outcomes than those available in the binary win/lose bottom line of court cases, while potentially salvaging important business relationships. In a straight-forward controversy involving just two parties, mediation may proceed either because the parties made a pre-dispute agreement to mediate any issues or because the parties and counsel have agreed to enter the mediation process. Once the process has begun, discussions ensue, suggestions for resolution are made, proposals are exchanged, and, hopefully, an agreement is reached and reduced to a binding writing. This straight-forward process becomes more intricate when there are multiple parties to the dispute.

Multi-party Disputes: Interlock, Converge and Diverge

In a multi-party matter, the facts may be more complicated and the legal issues more involved than where there are only two parties to the dispute. The interest of multiple parties may simultaneously interlock, converge and diverge. Where several parties have claims against the same respondent, the claimants may be aligned in finding fault with the respondent’s conduct but may also be competing against one another for a recovery, a competition that becomes acute as the funds available for payment become limited. In other cases, a single claimant, or even multiple claimants, may be seeking to hold several respondents liable; the respondents may be united in opposition to the claims but divergent as to both defenses and relative responsibility for any potential liability. Examples of these complicated multi-party situations abound; the most encountered in the commercial context are construction cases and insurance coverage disputes. Because mediation is flexible and informal, the mediation process is well-suited to grapple with the complications.

The Starting Point: A Good Faith Commitment

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