Here’s what happens during a lawsuit: You pay a bunch of money to an attorney. You fight the other guy to prove you’re right and he’s wrong. You attack his credibility, and he attacks yours. What was once a business partnership is now irrevocably hostile.
If you haven’t been involved in a lawsuit, chances are high you will be. A 2013 report by polling firms Penn Schoen Berland and Public Opinion Strategies showed that 43 percent of small-business owners surveyed were threatened with or involved in a civil lawsuit.
But there is a better way and, for 30 years, Honolulu attorney Gerald Clay has promoted mediation as a simpler, faster and cheaper alternative to legal warfare. To further his life’s work, he and the Better Business Bureau have now created the Hawaii Mediation Pledge.
You sign the pledge online and join a growing list of local business leaders; 125 have signed the pledge since its launch in 2013. Clay hopes to get 100,000 signatures by the end of 2015.
“We’re a capitalist society. If there are two competing products out there, it gives people a choice. I have the better product. I thought if we could just get the info out there, people will change their mindset,” he says.
One person who agrees is Steve Holmberg, president of the Islander Group, a trained mediator and a Mediation Pledge signatory.
“I’ve been sued. I’ve been down the road. It’s a horrible experience. The costs are just horrendous. In the blink of an eye you can spend $50,000 to $100,000,” he says.
“Most business people are numbers people who can see positives versus negatives. What comes out of the mediation could cost a hundredth or a fiftieth of what court would cost. Any businessman who has good business sense should sign the pledge. There is no downside.”
Clay, president of the Mediation Center of the Pacific, says that 95 percent of civil-court cases never actually reach judgment. Rather, the parties rack up a lot of time and expense in the discovery process of litigation, just to wind up settling out of court.
“Mediation is based on a totally different philosophy than the adversary system,” he says. “It’s based on the idea that each party has interests. A neutral third party – a trained mediator – can be brought in between the two disputers, help them recognize their best interests as a way to compromise and settle.”
All businesses should want to try mediation first, says Clay. “The adversary system is poorly designed to resolve disputes because it’s a binary system.” There’s one winner and one loser and the winner only wins because he can prove himself 51 percent right, says Clay. There’s no work toward a resolution that benefits all.
“The power of mediation is that the people come to the conclusion themselves. People don’t like to be told specifically what to do. Through mediation you allow them to come up with their own conclusions,” says Holmberg.
It’s a first step, he explains, and, if you’re unhappy with the results, you can still pursue arbitration or litigation.
“People are good by nature, I believe,” he says. “But sometimes we work ourselves into these frenzies. Once we get to your humanness, the conflicts go away. When you have a mediator, that’s when the magic happens. You see the walls come down.”