Mediating “One-Off Disputes” vs. “Relationship Disputes” — And the Significance of Settlor’s Remorse in Each

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No two are alike (photo by Marilyn Swanson)

By: Donald L. Swanson

Like snowflakes and fingerprints, no two mediations are alike. And the mediator, in any given dispute, must adjust to the peculiarities of the issues and parties at hand.

Take, for example, differences between mediating what I’ll call “one-off disputes” vs. “relationship disputes” in business contexts.

Definitions

Let’s say, for discussion purposes, that:

“One-off disputes” involve a standard lawsuit mediation, in which a future business relationship between the parties is neither needed nor desired; and

“Relationship disputes” involve a need or desire that an existing business relationship between the disputing parties continue.

Goals

In a one-off dispute, there is but one aim: to settle the case and move on.

But in a relationship dispute, the goal is different: to determine whether and how the relationship might continue.

Settlor’s Remorse

In the aftermath of a resolution of any type of dispute, settlor’s remorse is common. But the significance of settlor’s remorse is vastly different in one-off disputes and relationship disputes. Here’s how:

In a one-off dispute, settlor’s remorse is irrelevant—once a binding agreement exists, the only question is whether performance of the agreement will be voluntary or need to be enforced; but

In a relationship dispute, settlor’s remorse is a huge issue. Here’s why: since the settlement is about a future relationship, one party’s unhappiness with settlement terms puts the future of the relationship in jeopardy.

A Hypothetical Example

Here’s a hypothetical for illustration purposes.

Three people have a start-up business that’s struggling, but they believe in its possibilities. The problem is this: each views his/her own contribution as under-valued by the others. One loaned money and wants it repaid, one provides equipment and wants rent, and one wants payment for services. Income from the business is not sufficient to pay everyone, and contract provisions are ambiguous on payment priorities. All three want the business to continue, but conflicts are escalating.

A mediation has everyone in a single room working through details on what going-forward might look like. And they reach an agreement.

In the clearer light of the next day, however, one party is unhappy, believing the others made few if any true concessions. This party feels oppressed and under-valued, by the settlement, and does not want to continue under its terms.

A Mediation Success

In this hypothetical, the parties did, indeed, work out their disputes.  They did so like this: (i) they negotiated details under which they might continue together, but (ii) one party found, ultimately, such details to be unacceptable—and would rather end the relationship than continue under those terms.

This result appears at first glance to be a mediation failure: its settlement agreement did not hold up.  In reality, however, the result in the hypothetical is a mediation success.  And the success is both because of and despite the settlor’s remorse. Here’s why: the mediation process and it’s aftermath helped the parties see their relationship more clearly and to decide whether and how to continue—or not. They decided, ultimately and collectively, “not.”

Perhaps another mediation session would be helpful, in the hypothetical, to see if anyone wants to adjust further to preserve the relationship or to discuss details for shutting down the business.  But regardless, the mediation helped the parties see their conflicted relationship more clearly and to make informed decisions on what to do.

Conclusion

Settlor’s remorse may be irrelevant when a “one-off dispute” is settled.  But in a “relationship dispute,” settlor’s remorse is a huge thing—and not necessarily a bad thing.

** If you find this article of value, please feel free to share. If you’d like to discuss, let me know.

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