Although that disagreement would probably not have ended up in court, the resentment on both sides could have simmered for years and ruined the relationship. “The lawyer for the estate had no way of managing this relationship,” Friedman contends. “Lawyers are good at managing tax issues, minimizing taxes and that sort of thing. They aren’t so good in sensitive, nonfinancial issues.”
Not every mediation is so successful. Divorce settlement negotiations can be both bitter and punitive, which makes them ill suited for mediation. Nelson recently served as an advisor in a divorce settlement that required multiple mediation sessions. An heir to a large multinational family business filed to divorce his wife of 15 years. The settlement discussions had become acrimonious by the time the couple attended their first court-ordered mediation session.
“In any family estate dispute, you find that there are people at the negotiating table who are not in the room with you,” Nelson says. “Parents, siblings, other trustees have a stake in what gets decided, and you have to listen carefully to what’s being said to find out what these other parties want as well.” In this case the heir’s parents pressured him to settle quickly, so that their business would not be mired in a long legal battle. But the heir claimed to want a lengthy, expensive fight. To no one’s surprise, the couple’s first attempt at mediation failed, and each spent the next 18 months building a case against the other.
Unfortunately, these machinations were all in the public arena, embarrassing the family. Confidentiality is often the highest priority for people who choose mediation over litigation. The revelations made during mediation are generally protected as private, even if the dispute eventually ends up in court.
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