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Novel Approach to Mediation Allows for Settlement of Arduous Litigation
Co-Mediators Kent Lawrence Mitchell B. Goldberg Situation An engineer and distributor of business machinery (“Engineer”) terminated his relationship with his business machinery manufacturer (“Manufacturer”) and started his own business to refurbish and repair, and train others to refurbish and repair, the Manufacturer’s machines. The Manufacturer filed suit claiming, among other things, that the Engineer had stolen the Manufacturer’s trade secrets. The Engineer counterclaimed for damages, alleging that the Manufacturer had tortiously interfered with his new business. After lengthy pretrial motion and discovery proceedings, a Judge suggested the parties attempt to mediate the case as part of the Cook County Court-Annexed Mediation program. One of the attorneys had previously mediated before Kent Lawrence and suggested that the parties retain Lawrence Kamin as mediator. Challenge Each of the parties maintained a lengthy list of individual grievances toward the other party, a significant obstacle to any broad settlement discussion. In addition, the Manufacturer’s primary goal was to shut down the Engineer’s business to maintain exclusive control over the repair industry for its machines while the Engineer’s primary goal was continuing his business. As a result, a settlement appeared impossible. Solution Prior to the mediation session, Kent focused on developing a thorough understanding of each side’s problems in the case. He also used private, pre-mediation conversations with each attorney to seek suggestions as to how to deal with those problems. After listening to each side, Kent convinced the parties to accept in principle that they could both achieve their goals if the Engineer continued his business under certain, yet-to-be defined parameters approved by the Manufacturer. However, Kent realized that coming to an agreement that defined these parameters, and the procedure that would be used to audit compliance with them, presented a new challenge. The means by which the Engineer could run his business were so numerous that any attempt to deal with them as a whole would lead to frustration and chaos in a mediation session. In addition, the parties’ individual grievances were so significant that any one of them could overwhelm and distract the focus of the mediation. Because of the scope and breadth of the issues, Kent persuaded both parties to bring in a co-mediator, Mitch Goldberg. Kent then came up with a novel approach to the mediation. He asked both parties to presume they had already agreed to a settlement and the mediation session would be the forum to work out specific language for business procedures. Kent suggested that prior to the mediation session, the Manufacturer effectively write the settlement agreement by detailing the acceptable parameters under which the Engineer could operate his business. In turn, the Engineer was to prepare language deemed essential to any agreement. Under this approach, the mediation session would become a forum to work out the language for the new business procedures. Outcome After ordering the issues of contention from easiest to most difficult, Kent and Mitch conducted the mediation largely in joint session, focusing the parties on one issue at a time, negotiating the agreement clause-by-clause as if it were a transactional negotiation. Each offered creative alternatives that each party could live with to resolve individual grievances. For example, Mitch proposed an easy inspection process that ensured the Engineer was using original Manufacturer parts. The parties embraced the plan because it secured a continuing supply and demand for the parts. After twelve hours of mediation, the parties reached agreement on the major issues: the procedure for the Engineer to operate his business and protections for the Manufacturer’s intellectual property. It was only then that Kent and Mitch allowed the discussion to turn to the final, inflammatory issue of damages. After four additional hours of mediation, the parties approved and signed a comprehensive settlement agreement in full disposition of the lawsuit. Lessons Applied In mediation, a fundamental understanding of what is at issue, as well as the true interests of each side, is crucial to success, as are flexibility, adaptability, and endurance! And bringing in one or more co-mediators can help expedite a successful settlement by providing a fresh perspective and a unique interpretation of needs based on previous experience. |
