Mediation and Companies
- Bruno Querino
- Oct 14
- 6 min read
Because both conciliation and mediation aim to maintain ties. If I go all the way with a lawsuit, I will unfortunately, create a barrier between the plaintiff and the defendant. And it is unlikely they will reconcile. So the goal is to bring people together again and mend those ties that were broken because of the judicial process, because of the conflict.
When different expectations intersect, it is a natural process to arise certain conflicts. Despite the pragmatism of corporate relations, this type of relationship is not immune to conflicts. Actually, conflicts are not just accidents, but elements that can constitute and resignify relationships. It can be resolved in various ways, including a structured termination of the agreement, the negotiation of revised terms, the immediate rupture of the relationship etc.
Specifically regarding corporate conflicts, Denise Manfredi and Marc Burbridge explain that "The differences are found in the very purpose of the organization, whether in profit, hierarchy, or in the rules that govern people's behavior in the business environment. Without conflict management skills, individuals tend to resort to the use of power and the law, imposing their position or quickly escalating to litigation".
It seems that, for sustainable relationships, it appears ideal for parties to establish mechanisms to deepen dialogue and understand each other's needs. A partner who proactively collaborates to develop positive and mutual benefits relationships, and can engage in a non-destructive dialogue about different positions is also a partner with whom we tend to want to establish long-term relationships.
"Most negotiations take place in the context of an ongoing relationship in which it is important to conduct each negotiation in a way that helps, not harms, future relationships and future negotiations. In fact, for many long-term clients, business partners, family members, professional colleagues, government officials, or foreign nations, the ongoing relationship is far more important than any particular negotiation".
Mediation as an alternative method for conflict resolution
Mediation can be described as an alternative (recently, the term "appropriate" has been adopted) method of conflict resolution. In essence, it involves the introduction of a neutral third person to assist the directly involved parties in advancing their discussions,
CONJUR. Minister Nancy Andrighi, Coordinator of the Newly Created Judicial Center for Conflict Resolution (Cejusc) of the STJ. April, 2023. Available at: https://www.conjur.com.br/2025-abr-15/conciliacao-e-mediacao-sempre-serao-vantajosas-mesmo-no-fim-do-processo-diz-ministra/. Accessed on: May 7, 2025. ¹ Conflict Mediation, 2016, Coordinators: Tania Almeida, Samantha Pelajo, Eva Jonathan, p. 354.
ALMEIDA, Tania; PELAJO, Samantha; JONATHAN, Eva (coords.). Conflict Mediation for Beginners, Practitioners, and Educators. Salvador: JusPodivm, 2016, p. 354.
Fisher, Roger; Ury, William; and Paton, Bruce. Getting to Yes: Negotiating Agreement Without Giving In. New York: Penguin Books, 2005, p. 38.
with the ultimate aim of enhancing their relationship and, as a result, creating more favorable conditions for reaching a resolution.
One key aspect we find significant is this: the objective of mediation is not necessarily achieving a conflict-ending agreement. That would be a consequence of something broader: the parties moving closer to find common ground within their discussions, in a process that empowers them to understand, on their own, the importance of an agreement or even to modify their relationship to bring greater benefits to those involved.
It is also worth consider that in certain situations the most beneficial common ground might be an agreement to end the relationship.
However, even the rupture, when managed in an organized strategy, can reduce the negative consequences related to the end of the relationship. This can also facilitate quicker and more cost-effective resolutions to the issues arising from the separation.
Non-Adversarial Method
It is a non-adversarial method that generally seeks the approximation of the Parties involved rather than achieving a win-lose outcome.
All companies can benefit from the result of the process, based on the premise that most of the efforts are concentrated on understanding the real interests of each party and the reasons for disagreement, instead of involving common litigation strategies that aims to exploit the formal and material vulnerabilities of the other party to increase the chances of victory.
"The positive outcome of dialogues is an intangible asset that is extremely valued in private, community and corporate interactions. It is the incessant search for productive dialogue that provides the continuous redesign of new instruments of understanding focused on consensus-building".
When dealing with partners who, in the face of a controversy, tend to seek formal strategies to avoid responsibility, or whose communication clearly indicates their efforts are only intended to maximize their own gains, our tendency is to be in a reactive position and become more inflexible to try to protect our interests, in a expectation that our intransigence could somehow create a balance between the parties. Nothing is more frustrating: in these situations, it is very common for the parties to realize that their inflexibility leads both to waste resources on unproductive agendas.
Instead of this, the choice for mediation process can truly create new business opportunities.
4. ALMEIDA, Tania. Caixa de Ferramentas em Mediação: Aportes práticos e teóricos [Mediation Toolbox: Practical and Theoretical Contributions]. Brazil: Dash Editora, 2014, p. 144.
In a specific dispute regarding responsibility for delays on a complex engineering project, the construction company argued the delays stemmed from flaws in the client's project, necessitating adaptations during execution.
The client countered that their project was simply a reference, and the construction company should have raised any concerns about its inadequacy before starting work. However, recognizing the potential costs and negative impacts of litigation, such as project paralysis, payment insecurity, and compromised guarantees, both parties agreed to third-party mediation.
This shift in approach allowed them to concentrate on understanding the fundamental reasons behind each other's positions and to collaboratively identify solutions that effectively addressed the interests of both companies. The following conclusions were reached:
The engineering company proposed an alternative technical solution to enhance the industrial plant’s efficiency aiming to offset the start-up delay, leading the parties to a new construction contract; and
The client identified that the cost of capital raising of the construction company was significantly higher than its own, and suggested to advance payments, enabling a greater mobilization of work force to accelerate the execution of the remaining works.
Less expensive
Compared to judicial or arbitration processes, mediation is certainly the most cost-effective conflict resolution method. In the prior example, instead of incurring expenses for legal counsel, technical experts and other arbitrations/judicial costs, in addition to allocating internal efforts, capacities and knowledge to demonstrate why the claim of one party should prevail over the another, the long-term business partners decided to focus on identifying mutually beneficial alternatives.
Key aspects of this choice: mediation does not necessarily require the support of law firms for all stages of the process (although, in most cases, the parties use it, participation is not mandatory and, even if they participate, the fees involved are usually lower than for other alternatives).
In addition, the informality of the procedure often resulting in lower costs and in a faster conflict resolution, minimizing the economic risks and releasing resources for more productive activities for both parties.
Finally, Judiciary disputes (unlike Arbitration and Mediation) are usually public, exposing companies to hardly measurable reputational risks and associated costs.
The Parties decide
The mediator serv as a "translator", a neutral third party focused on helping to clarify the interests of each party, guiding the focus towards core issues, removing secondary obstacles to collaborative problem-solving that considering in a more empathetically the other party’s needs and challenges. Money is not always the core issue in conflicts, and sometimes the initial speech may not reveal their primary concern.
"Sometimes you just want the person to recognize your right, even if they don't have the money to pay for your car. That he at least apologizes and acknowledges that he caused a problem."
The mediator has no decision-making power. This, which in principle may seem like something negative, seems to be a great advantage:
Firstly, because the Parties are empowered and take the decisions (whether deciding to continue the agreement, find new solutions or even sustain the conflict after exhausting attempts to seek mutually beneficial solutions with the other party);
Secondly, the Parties play a major role during the mediation procedure. One of the major concerns when initiating a judicial/arbitration process is that the Parties do not have control over what will be decided and binding. They can only try to convince the decision-maker of their rights. This does not occur in mediation: solutions that do not meet their interests will not be binding.
Shifting the emphasis (cultural, relational and technical) on preparation for disputes and litigation and instead of this putting the same efforts to identify alternatives which suits better for the parties, we understand that the objective and subjective gains are potentially greater than those resulting from a litigious way of resolving problems.
Despite those advantages, challenges remain for the broader dissemination of this practice:
Culture of distrust
The market often operates under the premise of distrust. The more mistrust, the more possibility of clashes.
Effective mediation that bring the desired results require the active involvement of the parties in identifying mutual benefits and understanding that only a mutually beneficial solution should be acceptable for both parties (achieved either through shared gains or by potentially mitigating losses).
Adversarial logic
Law schools usually teach adversarial thinking. Students are trained to protect immediate clients’ interests in that particular agreement/litigation, not considering the
5. mutual benefits of long-term relationships, trying to transfer liability for the other party at any cost. It is like a win-lose game, when a victory is only possible when the other is defeated.
Informality and Lack of Information
Informality often frightens parties involved in conflicts. Formal and conservative procedures are the rule, a kind of well-known place where if something goes wrong, there is also someone else to blame. Alternative methods could almost also suffer from a lack of information or misinformation. It is believed that there is no "science" in the mediator's work, although literature on this subject has become increasingly widespread and has demonstrated that the techniques used are effectively capable of generating the expected common gains in this type of procedure.
As we have sought to demonstrate, we believe that the greater use of mediation mechanisms in resolving business conflicts can enable the involved parties to utilize their resources more efficiently and rationally, become more attractive business partners for their clients and suppliers, and that these procedures not only result in less damaging ways to resolve disputes but are also recognized as economically more advantageous for the parties involved. In the words of Hon. Min. of the STJ:
6. "Mediation and conciliation are individual seeds that we sow for world peace itself. They will always produce effects — if not material, emotional and peace-related effects."
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