by Andrew Flake

I took a field trip last weekend, visiting the gardens of a friend and experienced beekeeper. During a tour of the grounds, I watched in fascination as she tended to honeybees in the hundreds of thousands. They were calm that day, and remarkably, despite our proximity, none of the swarm appeared to care much that we were there. My friend explained that bees have moods, or more properly, modes, and can move quickly from one to the other, usually triggered and organized by scent.

But had anyone been stung, that stinger would have released a pheromone, attracting more bees, signaling to them the need to protect their hive, each new sting a new symbol of alarm. That move from productive nectar gathering, to targeted defense, happens in a flash.

Isn’t that what we see, much too often, in litigation: a kind of rapid mode-switching, a move from partnership to partisanship, with no in-between step? When a dispute comes to me, it is frequently just after a harmonious partnership or contract relationship has broken. Companies that were aligned and doing productive business together, or operating profitably and without conflict in the same market, have suddenly mustered their resources and counsel, and are ready to do expensive and protracted battle.

These disagreements, though, do not need to detonate. Unlike the volatile bees, trapped by evolution and impelled by scent, we can plan in the commercial context for conflict, well in advance, with a range of options short of full-blown litigation.

One of the most effective, and easily implemented techniques for doing so, is adding a phased aspect to our contract’s dispute resolution clause. Even if your client or organization is using an arbitration clause, have you considered requiring, as a first step, negotiation, or mediation, or both?

Here’s a basic example that the American Arbitration Association suggests:

If a dispute arises out of or relates to this contract, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution procedure.

I would want to modify this to be clearer about which dispute resolution modality, litigation or arbitration, is chosen, and to specify a range of specific options like choice of law and cost-shifting, but the language makes the point. Why not require the parties to conduct a good faith negotiation for a period of time prior to moving along the continuum to a more formal proceeding?

In the AAA’s model clause, negotiation is followed by mediation, an option I prefer even more strongly because of its effectiveness. I have seen it work despite party expectations so many times, even with emotions and negativity running high, the process somehow like the smoke my friend uses to calm her bees.

The parties have much to gain, and really very little to lose, in attempting to mediate a dispute first, and it is almost invariably better to mediate early. Whatever the forum, selecting and asserting claims, and responding with claims and defenses, is inevitable going to harden positions. Yet with earnest effort, and the right mediator, the likelihood is that a dispute can be resolved in a way that captures benefits of relationship, of resources, and of results.

I also like the possibility of tailoring the phases to match the specific business relationship and objectives. For example, instead of just referring to negotiation, it is possible to describe a laddering of discussions, having operational personnel work on solving a problem first, before it escalates to senior management. They can describe any degree of specific qualifications for the mediator herself.

In specialized industry settings, the parties can also specify instances when a neutral expert will evaluate certain issues and make recommendations on key issues, recommendations that can be more or less subject to challenge depending on the parties’ goals.

I could wax further on lessons from the honeybee, from teamwork, to division of labor, to planning ahead. But let’s stop with this: Taking a fresh look at your dispute resolution clause, considering creative and client-specific modalities, and if you’ve not done so, at least building in a negotiation phase, is well worth your time. In a surprising number of cases, you’ll avoid getting stung, and end up with some honey.

Bee well.