The Pros and Cons of Mediation in Hotel Disputes
By Albert Pucciarelli Partner, McElroy Deutsch Mulvaney & Carpenter, LLP | May 2016
As a lawyer involved for over 30 years in the drafting and negotiation of contracts for the hospitality industry, I can assure you that disputes are inevitable. Even among parties such as owners and management companies that have the best working relationships, there will nevertheless be issues that cause discord.
It is in how we resolve these matters that will determine if the relationship between the disputing parties will survive. If preservation of the contract and the relationship is desired, then the goal of both parties should be to resolve the matter quickly and efficiently, while also recognizing at the outset that neither of them is likely to be completely satisfied.
Resorting to court, for so many reasons, should be the last resort. Going straight to court is analogous to going to war without any attempt at diplomacy. Short of a pitched battle, there are three recognized alternatives: mediation, expert resolution (or determination) and arbitration. This article will focus on mediation, which offers the best opportunity for the parties to move forward in the 'status quo ante' following resolution of the dispute.
Before diving into the pros and cons, a definition is in order. Mediation means the intervention of a person chosen by agreement of the conflicting parties to promote reconciliation, settlement or compromise. Most people are familiar with mediation in a marital context. It applies with equal efficacy to commercial disputes as a means to bring the parties 'into the same room, face-to-face' so that, with the assistance of a trusted and sometimes trained/certified mediator, the parties can craft a resolution themselves.
A mediator assists the parties to find common ground and, where the parties disagree, to make concessions in the interest of a compromised solution. Mediation techniques include separate meetings with each party, developing a statement of the parties' exact differences to avoid having the dispute expand in the heat of disagreement and drafting a memorandum of understanding to capture the 'deal'.
This memorandum may be enough for the parties, or it may in some cases go to the lawyers to become a more formal contract or contract amendment.