Expeditious conflict resolution benefits everyone

On July 7-8, I attended a two-day workshop on “Mediating Land Use Disputes” in Freeport, Maine, put on by the Lincoln Land Institute. A very nice venue, although they worked us too hard.

My interest in mediation follows my role as an arbitrator.

I currently serve as a neutral arbitration panel member for the National Association of Securities Dealer, or NASD. About five years ago, NASD came to the Counselors of Real Estate and said, “Our members are selling Real Estate Investment Trust (REIT) stocks, and it occurred to us that should there be future litigation, which under NASD rules mandates arbitration in lieu of filing suit in court we may want to have some trained arbitrators who know something about commercial real estate investments” (or words to that effect).

Over the intervening years I have served on a half-dozen cases, none of which had anything to do with REITs or commercial real estate investments. The underlying philosophy of the NASD is to resolve brokerage disputes as quickly and fairly as possible. Therefore, during arbitration the parties are encouraged to continue to meet in parallel to the arbitration proceedings without prejudice. NASD offers a mediation service as well. The result is that about half the cases are settled outside of a final arbitration decision.

Arbitration is a formal legal proceeding following written rules and protocols. The arbitrators’ decision is final and binding upon the parties, which makes it an all or nothing proposition in most cases. The whole process can take one to three years and is cumbersome. Hence an alternative of a negotiated expedited resolution among the parties is attractive.

Under mediation, one mediator facilitates a negotiated resolution among the parties. Caucuses are used frequently, and the mediator consults privately with each party, often ferrying back and forth to nudge the parties closer to a common position. The mediator almost has unlimited latitude and can use all the creativity he/she can muster.

Horse of a different color

Mediation is all about dealmaking, focused on fairness and reasonable compromises to settle the dispute and get on with business. Depending on the size of the claim or dispute, there can be real money involved and passions can run high. The mediator is selected jointly by the parties and negotiates his/her own fee to be paid equally by the parties. The focus is less on procedure and technicalities than on resolution mutually agreed to by the parties.

Mediation is similar to what I do on a daily basis as a real estate counselor and adviser. As I tell all my clients, all I have to sell is my time, and therefore I must be selective in what assignment and projects I commit to. The more expeditiously I can get my clients to agree to terms, the more assignments I can complete. Likewise, the more expeditiously I can educate and resolve my clients’ issues, questions and concerns, the more value they receive from engaging me. I am fond of saying that I am a deal maker not a deal breaker.

It is all about getting to win-win. Success is very rewarding, while lack of success is very frustrating. We are fortunate enough to have a broad range of clients in many industries and sectors, which gives us opportunity to deal with many new and challenging tasks. The variety of assignments is another bonus.

Our clients benefit as well when we cross-pollinate by bringing our experience in educational and institutional settings to our health care clients or utilities or municipalities. Variety is the spice of life.

What does this have to do with mediation? Daily dealmaking and facilitation is informal mediation. It is all about bringing the parties closer together, not pushing them further apart. It is what we do and what we are good at.

But “Mediating Land Use Disputes” is a horse of a different color. Land use involves zoning, master plans and a developer/owner’s desire to make a profit. The rub is often that the community/neighborhood’s vision of what should or should not happen is not always in synch with the ordinances, regulation and community’s land use plan. Mediation, often among many stakeholders, is one tactic to move beyond impasse and seek a viable solution or compromise.

There always will be disputes whether they involve land use, real estate or investments. There are several means to resolve them: filing suit in a court of law; arbitration, both binding and nonbinding; mediation and facilitation. Today there are many practitioners able to help resolve conflicts. If your dispute involves a certain discipline, such as commercial real estate, then you should look for an arbitrator/mediator/facilitator with extensive knowledge of that discipline. nhbr

Bill Norton, president of Norton Asset Management, is a Counselor of Real Estate (CRE) and director of the Greater Manchester Chamber of Commerce. He also sits on the board of The Initiative for a 20/20 Vision for Concord, N.H. He can be reached at wbn@nortonnewengland.com.