By Duncum, John M.; Cope, Joe L. "Joey"
Real Estate Issues , Vol. 36, No. 1
SOME OF YOU CAN REMEMBER when there was no television. It was a theory yet to be perfected and commercialized. Younger generations cannot visualize a time when television didn't dominate almost every room of our homes and offices. Similarly, students of law in the next couple of decades may be surprised to find that "dispute resolution" clauses--both mediation and arbitration--were not always included in contracts.
With dispute resolution emerging as a "new frontier" real estate-related practice, The Counselors of Real Estate[R] is providing assistance and information to counselors who have an interest in establishing mediation as an offering of their professional services. Some have asked if mediation or the other skilled techniques of dispute resolution fit in the practices of counselors. Perhaps there is another twist to this question. Can a practitioner of real estate-related disciplines benefit from using the techniques and skills of dispute resolution and yet never practice formal mediation?
As our society has become more litigious and litigation costs have risen dramatically, American business has sought ways to reduce that cost of doing business. In the last couple of decades "alternative dispute resolution" and "mediation" have become familiar terms in the boardroom and in the executive suite. American business has embraced this concept in handling disputes between the company and its customers, the company and its vendors, employees and management, and between employees. Conflict and its manifestation--disputes--will happen at some point in most groups, whether business, political, charitable or religious in function. Conflict occurs because people have different ideas, values, interests or accepted behavior patterns. Conflict may have several different causes: poor communication, evil intent on the part of one or more parties, selfishness, personality disorders or scarce resources. Yet conflict is not the real problem. Unresolved conflict is. The resulting costs, hidden and obvious, of unresolved conflict can be seen in the expenses of litigation, damaged relationships or loss of customers. (1) While there are several alternatives in dealing with conflict, mediation is a less costly approach and one in which maintaining or reestablishing relationships is most likely.
Although Americans in the 20th and 21st centuries would like to take credit for the development of this creative process, recognition should be given to societies of centuries ago in China and Asia, Phoenicia, ancient Greece and Rome that employed the principles of dispute resolution in similar matters within their cultures. (2) Confucius believed that the best way to resolve a dispute was through moral persuasion and agreement rather than coercion. (3)
Further acknowledgment goes to the United Kingdom where, in the 20th century, mediation became institutionalized in the secular arena and was recognized as having a role in and of itself. The Conciliation Act relating to the conduct of industrial relations was enacted in the U.K. as early as 1896.
While we Americans neither invented nor perfected it, we have successfully borrowed the process and are using it with our own modifications. In the United States, alternative dispute resolution (ADR) processes were formalized as an alternative to litigation early on, with the U.S. Department of Labor (established in 1913) appointing a panel, the "commissioners of conciliation," to deal with labor-management disputes. These commissioners later became the U.S. Conciliation Service and, in 1947, that entity became the Federal Mediation and Conciliation Service. Some of the early writings in ADR drew on the experiences of labor and industrial dispute resolution and adapted them to the resolution of interpersonal conflict. (4) Late in the 20th century, American giants such as Halliburton, Shell Oil Company and General Electric incorporated internal processes in their companies that allowed for collaboration before litigation could be pursued, especially in employee-related matters. …