David Stern is National Head of Forensic Accounting & Dispute Resolution
It is often said that partners in professional practice spend more time with their fellow partners than they do with their “nearest and dearest” outside the business.
Working in close proximity, sharing the stresses and strains and trials and tribulations of professional life can, unfortunately, result in extremely acrimonious situations when serious disputes arise in a professional practice.
Emotions can run high when partners leave professional practices, whether of their own choosing or not.
Disputes can arise in relation to the value of goodwill to be attributed in the partnership, the balances on partners current and capital accounts, adjustments made in relation to periods during which a partner was involved in the business, but are made after the partner has left the partnership, and in the classification of partnership and personal assets.
The situation can rapidly escalate into one akin to an acrimonious divorce. The involvement of solicitors and Counsel may not only result in people taking polarised positions over all matters, but the incurring of substantial costs in both monetary terms as well as divergence from the continued running of the partnership itself.
Over the last few years, the introduction of alternative dispute resolution (ADR) has seen a means of resolving disputes without the need to resort to Court procedures.
The most usually understood form of ADR is mediation.
Mediation is a voluntary, non-binding private dispute resolution process in which an experienced third party neutral helps the parties try to reach a negotiated settlement.
How does mediation operate in practice?
- The timing is fixed at the convenience of the parties.
- The parties set their own procedure.
• The process involves the presentation of each party’s case.
- This is followed by a series of private confidential meetings with the mediator.
- Results in a commercial and timely settlement agreement.
What is the role of the mediator?
- To clarify the issues and make the parties focus on the matters in hand.
- To promote discussion of possible solutions and separate individuals from the problem.
- T o educate and analyse the costs and risks of not settling.
- To break the negotiating impasse.
- To instil a sense of realism to the discussions.
What are the advantages of using mediation to try and resolve disputes in a professional partnership?
- Speed and flexibility.
- Substantial costs savings in both legal fees and management time.
- The process is completely confidential.
- Deals with wider issues and needs.
- The parties keep control over their own destiny.
- It can help preserve relationships.
Most mediations can be dealt with during the course of one day. This is a small price for the parties to pay in order to sit round the table and try and reach a commercial solution which can become rapidly unobtainable once extreme positions in litigation are taken and the parties find themselves on a rollercoaster which they cannot get off.
Who has not been embroiled in litigation either themselves or with their clients and not, with the benefit of hindsight, have considered it makes sense to put aside one day to try and reach a sensible, commercial settlement on such disputes?
David is a CEDR registered mediator and has to date undertaken 22 appointments as a mediator in connection with disputes covering a wide range of industries.
For further information, or to have a confidential discussion, please contact David Stern on 020 7467 4000