COMMERCIAL REAL ESTATE ALLIANCE
To Mediate or Not to Mediate; Should It Even be a Question? By: Adria Maria Jensen, Esq., Shumaker Loop and Kendrick, LLP
T
he standard FAR / BAR Contract requires parties to submit any and all disputes arising out of the contract to mediation, pre-suit; the Florida REALTORS® Commercial Contract does not. It is rare, in fact, to find such a provision in the commercial context. However, there are some compelling reasons for including it in commercial contracts as a matter of course.
WHAT IS MEDIATION? Mediation is defined as, a means of resolving disputes outside of the judicial system by voluntary participation in negotiations, usually conducted under the guidance of a trained intermediary. Parties can always choose to mediate prior to litigation, but in the absence of a provision mandating it, neither can force the other to the negotiation table, pre-suit. At first glance, it would seem more appropriate to make that decision completely voluntary. After all, why should the non-breaching party incur expenses compromising with the breaching party? But a wider view supports that more may be gained from compromise than victory.
As a litigator and a Florida Supreme Court Certified Mediator, I get to examine disputes from both angles. As a litigator, I analyze my clients’ positions and advocate vigorously with the goal of getting them what they want. As a mediator, I examine each party’s needs and work to bring them to an acceptable resolution. Having been on both sides, I can tell you that while litigation is sometimes necessary; it is exhausting, expensive, and often ineffective in getting people what they really want.
MEDIATION CONCERNS In mediation, parties are free to fashion a remedy of their choosing; however, it is unlikely that parties who already disagree on the issues will agree to mediate immediately after the disagreement ensues. Suppose a buyer informs a seller that due to her actions, the buyer requires an extension; assuming the seller disputes the allegation and refuses to extend then both will seek termination and demand the deposit. If neither or only one will agree to mediate, litigation will ensue and settlement options that may have been feasible early on will become untenable as the parties devote significant resources towards winning rather than resolving the matter. These types of disputes are often ripe for creative compromise but charged with emotion. Thus, a neutral mediator is better positioned to openly discuss the problems affecting the transaction, explore a myriad of settlement possibilities, and thus provide the perspective needed for cooler heads to prevail, than any of the stakeholders involved. Early mediation may increase the upfront costs of litigation if a settlement is not reached. However, the potential savings far outweigh the potential expense. The process will provide all involved with valuable insight and a better understanding of the issues before a single paper is ever filed. That alone can significantly mitigate the costs that would otherwise be incurred by obtaining details and documents. Thus, when considering whether a mediation pre-requisite is advisable, remember the words of the Rolling Stones: you can’t always get what you want; but if you try sometimes, you might find you get what you need. • This article is meant for educational purposes only. It is not intended to serve as legal advise and should not be used as a substitute for consultation with an attorney.
22 | ELEVATE [ JANUARY 2021 ]
