Mediate This!
Better Dispute Resolution for the AI Age.
Mediation offers a fast, safe, confidential, inexpensive, efficient, individualized path to resolving disputes between technology vendors and their customers. As AI enters everyday use and organizations ponder whether to buy or build the AI solutions they need, the standard, default options of litigation, termination of agreements, or just living with whatever problems arise are no longer good enough. Mediation may not be the status quo. However, for forward-thinking businesspeople and the lawyers who represent them –people who understand that the more complex a technology dispute becomes, the more it lends itself to collaborative problem-solving -- mediation offers superior dispute resolution. If your organization isn’t routinely including mediation provisions in its technology agreements, it’s time for a change.
Understanding Mediation
In mediation, an independent, neutral mediator guides each party to a dispute in a discussion of its interests and of whether there is enough common ground with the interests of the other party to resolve the dispute by agreement. Mediation empowers organizations to resolve disputes using whatever technological or business means they think best.
The mediator comes to the dispute with no axe to grind – that is, free of company loyalties, personal agendas, office politics, and whatever other baggage the parties’ negotiators bring to the table. That is why mediators regularly find common ground and develop options for resolution disputing parties do not find on their own. Unlike arbitration, where one or more private judges decide who wins and who loses in a binding process that has most of the problems and few of the virtues of litigation, mediation saves time and money and preserves business relationships.
It’s natural to suspect a catch, but there really isn’t one. Mediation proceeds under an agreement between the parties and the mediator providing that:
Mediation is voluntary and succeeds only when the parties agree to terms that resolve their dispute - something each party is free not to do;
Mediation is confidential;
If mediation fails, each party is free to litigate the dispute or exercise its right to terminate the related agreement as if mediation never occurred; and
Neither party may use anything said or done in mediation by the other party as evidence in litigation or call the mediator as a witness.
Of course, mediation takes more or less time depending on the characteristics of each dispute. There are fees and expenses to be paid, and they too will vary with the length and complexity of mediation. If the process succeeds, the parties will need a contract document to capture the terms that resolve the dispute.
With all of that considered, mediation resolves disputes for a fraction of the cost, in a fraction of the time, with far less effort and collateral damage than litigation of comparable disputes or the termination of the agreements related to them. Litigation is long and costly, as The 2024 Norton Rose Fulbright Annual Litigation Trend Survey makes clear. Termination of an agreement begins the complicated and expensive process of changing vendors. Given that organizations have the option to litigate, terminate agreements, or both if mediation fails, there is every incentive to try to resolve disputes initially by mediation and little reason not to.
Making Mediation Work
Mediation works best when a mediation provision appears in the agreement between the vendor and its customer (a sample mediation provision will be in a forthcoming Stand-Up Meeting post). Contrary to a view you may hear, it is not a mistake to raise mediation in advance, before any dispute arises, while the parties are working amicably to close the deal.
A mediation provision is a long-term investment in the business relationship the agreement reflects. Proposing mediation upfront demonstrates your commitment to a long-term business relationship too important to be jeopardized by a dispute. The suggestion is only that both parties should have the contract right to require an initial effort to resolve disputes by agreement with a mediator’s help. Mediation permits you to manage disputes without allowing them to derail the relationship or keep business from getting done.
Is it possible to mediate a dispute even if the underlying agreement doesn’t call for it? Sure. However, once a dispute arises, the business relationship is under stress. Patience and trust may be in short supply. There may be more support for litigation or termination, perhaps from high places, than for mediation. Getting a mediation provision into the agreement to begin with is much easier and gets the relationship between the parties off to a better start. There is a Suggested Mediation Provision on Stand Up Meeting, a companion Substack.
Conclusion
Successful mediation resolves disputes while maintaining business relationships. As AI makes vendor relationships more complex and technology more interdependent, mediation offers a safe, efficient path to resolving disputes with vendors or customers you need to keep your organization moving forward.