Mediation of Golf Industry Disputes: Use a Different Sort of Club to Beat Your Opponent
January 31, 2012
Michelle F. Tanzer- Ft Lauderdale
Golf clubs and their developers, owners, builders, operators, managers and members are still taking their disputes to court to duke, or “club” it out. It’s interesting that this trend continues even when there are readily available options to full-blown litigation. Such options, commonly referred to as alternative dispute resolution (ADR), are growing in popularity because it resolves disputes more quickly and less expensively than traditional courtroom litigation.
The Most Common Forms of ADR
Mediation and arbitration are the two most common forms of ADR, however this alert will focus solely on mediation. Mediation can occur by:
- state statute or local administrative rule, i.e., the parties are required to attempt to resolve their dispute by mediation before trial
- contract, i.e., the parties agreed in the agreement between them that, in the event of a dispute, they would mediate their dispute before filing a lawsuit or demanding arbitration
- mutual agreement, i.e., neither a legal requirement nor contract requires mediation, but both parties elect to pursue mediation when a dispute arises, to attempt to settle in order to avoid litigation or arbitration
The process of mediation is quite simple. It involves the two parties selecting a neutral third-party mediator, who is often referred to as the “neutral.” Neutrals can be identified and selected by contacting several organized ADR providers such as the American Arbitration Association, Judicial Arbitration and Mediation Services, Inc., alternative dispute resolution centers, or independently through the parties’ attorneys or other professional consultants. In many jurisdictions, court-appointed or court-approved mediators must be certified, which requires that they successfully complete extensive training in conducting mediated settlement conferences. Many attorneys and sophisticated parties prefer that the mediator be a “knowledgeable neutral,” which means that the mediator possesses knowledge and experience in the industry related to the subject matter of the dispute. Some contracts have specific industry experience requirements for the neutrals, so it can be difficult to locate mediators and arbitrators with the required experience. This is particularly true of certain industries, including golf and hospitality.
How Does Mediation Work?
Once the neutral is selected and a time and place is agreed upon, the parties meet in a settlement conference conducted by the mediator. It is important to remember that mediation is non-binding. It is also confidential, so that the discussions during the mediation conference cannot be used against the parties later in court or arbitration. Mediation is also non-coercive - the parties are free to agree or disagree. Typically, the parties begin by meeting jointly with the neutral and present a brief summary of the facts, a basis for their position and what they are seeking.
The neutral explains the rules of mediation generally, and this conference specifically, and informs the parties that the purpose of the mediation is to find a settlement of their dispute, that while the settlement may not serve either party perfectly, each party will conclude the day with a fair resolution of the dispute and avoidance of a long, drawn-out court battle. Following this general session, the mediator meets separately with the two sides, including counsel and representatives with settlement authority. These are referred to as a caucus or private session. The mediator will, by this point, have a good idea of the positions of the parties and any prior settlement discussions. Going back and forth between private meetings with the two sides, the mediator tries to get the parties to a settlement or close to a settlement. Often, a final settlement is reached after all of the parties return to a general session.
If a settlement is reached, a mediation settlement agreement is prepared which is executed and then signed by the parties and their counsel. In those instances in which the mediation fails, i.e., no settlement is reached, the dispute continues with a final resolution in court or through arbitration. The parties should realize that settlement at mediation is something they’ve agreed to as opposed to the judgment of a court or an arbitration award which is forced on them.
Why Bother With Mediation If It Is Not Required?
Litigation can be quite time consuming - sometimes taking several years to conclude. Time spent on long, drawn out court battles can consume valuable time, distract from running the business and can be very costly. In contrast, mediation can save time and money, and can be scheduled without regard to clogged court dockets. Additionally, sometimes parties can resolve their dispute on the first day of mediation. Then the parties are free to return to the business of running their golf business. Litigation can cost tens or hundreds of thousands of dollars in a matter of weeks or months. While money spent on protracted litigation can sometimes be recovered by the prevailing party, this is not true in every case. Mediation can save the parties money and the cost of the mediation itself is generally shared by the parties.
Why Is Mediation Good for Golf?
Mediation offers more benefits to golf than just saving money and time. Golf is a unique game for several reasons - players keep their own scores, are expected to play fairly and to honestly report their shots - all while respecting their opponents. The game of golf is not just about winning and losing, it’s much more than that. The World Golf Foundation, in its “The First Tee®” program, has identified nine core values of golf: honesty, integrity, sportsmanship, respect, confidence, responsibility, perseverance, courtesy and judgment. Successful mediation incorporates these same core values.
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