Mediate early in commercial disputes: Gossin
By AdvocateDaily.com Staff
Companies involved in a commercial dispute should make mediation their first step after they hire a lawyer, says Toronto lawyer and mediator Eric Gossin.
Sitting down with a mediator does not have to wait until discoveries, undertakings or other expensive and time-consuming legal processes take place, says Gossin, partner with Devry Smith Frank LLP.
“A mediator doesn’t care who’s going to win or lose, or to a lesser extent for evidentiary validation. A mediator wants to look at the general legal principles and see if there is a solution,” he tells AdvocateDaily.com. “You can do that very early on in the process.”
For example, if shareholders feel there is no accountability or if they disagree about whether or not to wind up the company, a skilled mediator doesn’t require the same detailed background that is necessary for a trial.
“They need the basics,” Gossin says. “Save yourself a significant amount of money, hire a lawyer and a mediator, get the other side to the table, do financial disclosure, and see if someone can help you come up with a solution very early on before you start the lawsuit.”
While mediation is mandatory in commercial litigation in some parts of Ontario, it often doesn’t happen until the parties are well into the legal process. This means they can become invested, both financially and emotionally, in their arguments and less likely to settle, he says. But Gossin believes there are plenty of reasons to attempt a timely settlement.
First, lawsuits are very expensive, a cost most average people find they can’t afford and, secondly, they are time-consuming and draining, he says.
“Lawsuits become a real burden, psychologically and emotionally,” Gossin says. “Nobody likes a lawsuit, and that’s true across the board — in family, estate and commercial law.”
The “black and white” version of events printed in a statement of claim can also paint a picture that is upsetting to the clients, he adds.
“It can read very differently from their version of reality. Lawyers have to draft documents in an aggressive manner, creating a new barrier the minute the lawsuit is filed,” Gossin says.
The focus on facts and arguments in litigation misses a huge piece of a dispute — the human element, he says.
“The beauty of mediation is you can encourage lawyers to put aside their legal positions, and drill down to who we are really dealing with — perhaps it’s a guy who is owed money and someone who has to pay it,” he says. “We use mediation techniques to get past the legal hurdle and simply encourage them to do the right thing.”
Gossin says many of his lawyer colleagues would not agree with his stance on early mediation given that strong litigators are positional, often believing that they have a solid case.
“They may turn to the mediator and say, ‘I’m not settling, I’m going to win this,’” he says. But Gossin tends to point out the time and money spent on the fight.
“Is there something we can do to preserve the financial circumstances of these parties? Can we come up with a solution, even if it means having to give up on a strong legal point?”
Gossin suggests lawyers could benefit on further education about the benefits of mediation, rather than see it as simply being forced to compromise.
“They must accept clients may be better off if they don't pursue the lawsuit,” he says, adding it can be challenging when the clients want to fight just as much as the lawyer. It’s also important to recognize some parties just aren’t ready to compromise and understand the other side.
But to Gossin, the legal formalities sometimes override what is really going on in a dispute, holding parties back from coming up with a solution.
“In mediation, the human element becomes much more apparent and open,” he says. “That’s the whole point: we can sit down with the parties and look at what’s really happening.”