Negotiation requires the use of a neutral third party to facilitate a settlement.

In Mediative Processes, a third party neutral works to facilitate a negotiated settlement between the parties. The mediator facilitates the negotiations and evaluates the relative merits of the claims and defenses. The neutral does not have power to impose a solution or decision - the parties retain ultimate control over the outcome. The terms of the agreement are limited only by the interests and creativity of the parties and the neutral. By agreement and permission of the parties, the neutral sets the ground rules and may profoundly affect the order of the proceedings, the parties' collective and individual analyses and the general dynamic of the settlement discussion.

Facilitative Mediation

Facilitative Mediation is a process in which outcome control remains almost entirely in the hands of the parties and counsel. The mediator restores communication and helps to create options for resolution by:

• ensuring that all relevant information is exchanged and heard by the parties or confirms that there is a good reason why it isn't being exchanged
• providing parties the ability to vent
• coaching negotiators on next moves
• helping parties invent settlement options
• transmitting offers and demands
• working to overcome potential impasses

Evaluative Mediation

Evaluative Mediation occurs when the mediator creates more structure and injects his or her own view or prediction of the trial outcome. It is often used for more difficult cases, where the gap between the parties is large, the issues somewhat complex and the stakes high. The mediator allows the parties to test the reality of their predicted outcomes by:

• working to thoroughly understand the parties' factual and legal arguments
• providing feedback on the relative merits of claims and defenses
• offering his or her prediction of the outcome in court
• in some circumstances, recommending settlement ranges

Mini-Trial

Mini-Trial is a highly structured, formalized and evaluative mediation process in which the parties cede a great deal of procedural control in order to reframe the dispute from the context of litigation to the context of a business problem. It requires the participation of non-legal party representatives with settlement authority who sit as a panel with the neutral. The neutral advisor:

• works closely with the parties before the hearing to facilitate agreement on procedure and resolve disputes
• oversees the panel of senior business officers
• moderates the mini-trial hearing and then provides an evaluation if necessary
• facilitates settlement between the parties after rendering his or her evaluation

Non-Binding Arbitration

Non-Binding Arbitration is a hearing process that looks and feels like arbitration, but is advisory, not binding. The neutral advisor(s):

• sets up and presides over the process
• reviews the factual and legal positions of the parties either through briefs or oral arguments
• evaluates what the likely arbitration outcome might be

Neutral Expert Fact-Finding

Neutral Expert Fact-Finding can be a stand-alone, non-binding process, or it can be part of a larger non-binding process. It is used to help resolve a disputed technical issue. The neutral:

Family businesses are full of dynamics that are not present in other business types. While there are many benefits to the familial relationships present in family businesses, it can also mean that disagreements can feel more personal and issues that stem from outside of the business can lead to internal disagreements.

This article is the first in our "Dispute Resolution Methods" series, an introduction on how to resolve issues that arise in a family business setting. While these conflict resolution processes and techniques are not unique to family business environments, the nature of a family business lends itself strongly to the need to find solutions to conflicts outside of traditional legal proceedings.

Here we begin by giving an overview of the benefits of Alternative Dispute Resolution (ADR). ADR refers to any method of conflict resolution that takes place outside of the courtroom. It involves processes and techniques of conflict resolution without litigation and empowers parties to work together using a framework to amicably settle complex issues. The most common ADR methods are negotiation, mediation, conciliation, arbitration, and private judging.

Negotiation

Negotiation is usually the first approach to take before resorting to other ADR methods. It is more informal and affords the parties flexibility. Essentially, negotiation is simply parties identifying an issue and meeting to fix it—they control the process and the solution.

This may seem obvious, as negotiating relationships and disagreements is something that business owners do all day, every day. However, when a problem gets serious enough, it can sometimes be helpful to recognize an informal negotiation as the first stage in a potential ADR process.

One of the fundamental aspects of a successful negotiation is transparency. Personal or relational family tensions can cloud the negotiations. It is essential to be clear about the potential challenges and problems that might come up during the negotiations. Addressing the intense family tensions might feel overwhelming, but it will prevent you from feeling stuck during the process.

Mediation

Mediation is a type of assisted negotiation. During mediation, parties obtain the help of a neutral third party (the mediator) to help them resolve the dispute. Importantly, mediation requires a lot of involvement from both sides.

Mediation can be informal, where the mediator is a friend, family member, or trusted advisor. In the case of an informal mediation, it is key to select a person who both parties can agree on and who brings some form of expertise to bear on the situation.

The process can also be formal, where the parties hire a professional, neutral third party. Formal mediators are trained in negotiations and help parties solve the issue to satisfy both sides. In either case, the purpose of a mediator is not to decide whether a party is wrong or right—the goal is to help the parties find a mutually acceptable resolution.

While conversations during mediation are confidential, it is usually possible for the written agreement that results from mediation to be made legally binding. Mediation is particularly useful if parties believe that they cannot resolve a dispute on their own.

Conciliation

Conciliation, like mediation, is confidential, voluntary, and flexible. It is also facilitated by a neutral third party (a conciliator) and focused on reaching a dispute resolution that both parties consider satisfactory.

Unlike in mediation, the conciliator provides parties with a proposal to resolve the issue, and the parties work from there. The presented proposal is non-binding—although, like in mediation, any formal agreements struck after conciliation can be made legally binding.

Arbitration

Arbitration is more formal than negotiation, mediation, or conciliation, and can look more like litigation. Parties submit their dispute to an arbitrator who renders a decision following the process. Parties can agree to arbitrate before or after a conflict occurs.

The real benefit over formal litigation (in addition to cost and efficiency) is that the parties in an arbitration have the freedom to set the rules of arbitration, which can be much more flexible than formal civil procedure required in court. For example, parties can select the number of arbitrators, the forum, and fees.

Arbitrators also have a great deal of flexibility to work with the parties in front of them in a way even a judge may not. This type of process can help parties save time and expense associated with litigation.

Private Judging

In private judging, parties authorize an expert in their legal dispute to resolve the issue. The parties hire a private judge, often a former judge or an attorney. The parties take turns presenting their case to the judge, after which the judge issues a legally binding decision.

The court appoints a private judge. A private judge can help move the case along faster and enable parties to avoid airing their family business matters publicly.

Conclusion

Parties often use multiple ADR methods to meet their needs, and the methods can be more efficient and less expensive than litigation. In addition to the economic benefits of ADR, it can help family members who are deeply invested in the issue find solutions amicably. That being said, ADR still requires parties to voluntarily examine the disputes and work together to arrive at a solution.

What is the process of bringing in a neutral third party to settle a dispute?

What is the simplest form of alternative dispute resolution?