Why is mediation so often better than litigation?
The following examples show what might have happened in litigation and what could happen if the outcomes are left to the parties through mediation. All names and facts have been changed extensively. The results described “in litigation” are possible, but your actual results may vary.
Landlord and Tenant Example
Nearing the end of her lease term, it had become clear to Landlord and Tenant that they had very different definitions of what “clean” and “reasonable wear and tear” might mean. Concerned she might not receive her full security deposit back at the end of the term, T stopped paying rent. T tried to look for another apartment, but LL gave negative references to perspective landlords and T had no place to go at the end of the lease term.
LL sued for back rent and to evict T. The court entered a judgment against T and ruled that T could be evicted after a 10-day appeal period. The court recognized that the security deposit and damage to the apartment were still in question, but concluded that it could not deal with these issues because these issues weren’t before the court. LL and T would have to come back to court.
LL and T agreed on a fixed amount of the security deposit to apply to damages and to pay for cleaning the walls and carpet, and the balance was applied to the unpaid rent. T agreed to leave in two days and to pay the balance of the rent in equal installments over the next two months. LL agreed to provide “no response” to reference requests.
Computer Maker and Distributor Example
Computer Maker entered into a distribution agreement with Distributor. Distributor would market CM’s “XXX” model in the Regions of “A”, “B” and “C.” Shortly after entering into the agreement, CM dramatically slowed distribution of “XXX” computers for three months while CM finished developing its replacement, Model “YYY.” This delay made it difficult for Distributor to sign up resellers for “XXX.” Distributor’s sales quotas in Regions “A” and “B” were just missing the required minimums. Worse, Distributor was having no luck finding resellers in Region “C” because CM was selling “YYY” in Region “C” directly to resellers.
The lack of success in Region “C” and Distributor’s inability to compete against CM’s “YYY” model soured the relationship between the two very quickly.
CM sued Distributor to terminate the contract. Distributor countersued to be allowed to market “YYY” since “XXX” was already obsolete. Both parties knew that regardless of who “won,” the relationship between the two might never be comfortable. The court ruled that Distributor would have three extra months to meet all the sales quotas in all the Regions or else the contract could be terminated.
CM permitted Distributor to represent the “YYY” model in Regions “A” and “B,” and Distributor agreed to terminate the part of the agreement that dealt with Region “C.” New sales quotas were developed covering both a smaller territory (without Region “C”) and the extra product (now including “YYYY”).
Divorce Mediation Services Example
As husband and wife they weren’t great; but as father and mother, they were very dedicated and loving. F had no income and took care of their child. M paid child support according to the court-mandated support schedule and took care of the child on weekends. After the divorce with extra time on his hands, F started a small business. Feeling the need to “look successful,” F went into debt to buy a new car and new clothes. F did the work for his customers on weekends when their child was with M, but needed to make calls on potential customers during the week. The business was just starting to show signs of success although it was a long way from making a profit.
M saw all the signs of F prospering (new car, fancy suits) and unilaterally reduced the amount of support payments. In the meantime, F was concerned that, in litigation, he would have to disclose his finances publicly and that might scare his potential customers because, in reality, he was having a tough financial time.
F sued M to continue support payments and for back support. M countersued for a support reduction and sought more custody time. After a full and very public financial disclosure, the court ruled that F needed an increase in support payments and judgment was entered against M for the back payments. With “no change in circumstances,” the custody schedule remained unchanged. F began losing customers as a result of the financial disclosures and because his attention was on the court action, not the business. F and M had many more years of an icy relationship.
F and M met with a mediator at a convenient time. The animosity at first required separate sessions while the mediator sorted out the needs and issues for both parties. Ultimately, they exchanged full financial information and F’s business plans. Seeing the potential of more money from the business to support the child and M having more time with the child, M and F created a flexible schedule for F to make sales calls and M would take care of the child. Support payments stayed the same, but they agreed to revisit the support and schedule in six months. If the business was growing, M would have more time during the week and they would share weekends.
Service Supplier and Business Owner Example
Service Supplier has a written contract with Small Business Owner to provide a list of specific services. After the agreement was signed, SBO asked for one other service, and SS said he would supply the extra service “no charge, as a favor.” All of the services listed in the contract were provided as requested, but the “extra” service provided “as a favor” did not work at all. SBO spent considerable time and money to correct the results of that “extra” service.
SBO sued SS to recover for the time and money incurred because the “extra” service didn’t work. The court decided there was no contract for that service, and no damages were awarded. SBO left the court with no money and nothing nice to say about SS when colleagues asked.
Without admitting any wrongdoing or paying for SBO’s lost time, SS agreed to pay over time a significant portion of SBO’s out-of-pocket expenses. SBO wrote a letter of reference for SS, and SBO and SS left shaking hands and talking about a lunch together in the future.
Our Child & Spousal Support Calculators:
Resolution Point offers remote mediation services at no extra charge when parties can’t be in the same room due to schedules or other conflicts:
- ▪ 4-way phone conference calling
- ▪ Video conferencing
- ▪ Internet connectivity which allows parties to watch everything remotely on their computer screen as it’s happening in our office.
WHAT OTHERS SAY
“The financial issues involved with any divorce are enormous and more than I could understand alone. Danny’s knowledge of finance and the many ways it affects the final outcome came as a relief to me. Not only does he understand the divorce process and its many ramifications, Danny was able to explain issues to me so that I understood and I was part of the process. This support helped me make informed choices about the biggest financial decision of my life.”