THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, September 4, 1995 TAG: 9509020509
SECTION: BUSINESS WEEKLY PAGE: 8 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY JANET DUNPHY, BUSINESS WEEKLY
LENGTH: Long : 156 lines
Keith Alessi was tired of bickering about roof repairs at the Farm Fresh supermarket.
After all, he was trying to run a grocery store chain, not a construction site. Then his attorney suggested mediation.
``We found ourselves heading down the road to litigation,'' said Alessi, vice chairman of Farm Fresh Inc. in Virginia Beach, ``and we typically would not litigate unless we felt we had to.''
Instead, Alessi and the building's landlord, each armed with his own roof expert, spent some 15 hours in ``back and forth'' negotiations until the issue was resolved.
Commonly used to settle family squabbles such as divorce, alternative dispute resolution has gained popularity nationwide as a method for businesses small and large to settle differences without going to trial.
The advantages are plenty:
Mediation saves valuable time in the form of hours that otherwise would be spent preparing for trial. And it saves money in the form of attorney and expert witness fees.
``The adversarial relationship creates more conflict and conflict generates fees,'' one lawyer said about going to trial. ``You spend a tremendous amount of time, months and monies when usually attorneys know where it's going and where it will end.''
Although most Tidewater courts seem accessible now, mediation can relieve the workload for judges and juries, a plus in the future if predictions of mounting congestion in the courts prove true.
And opposing sides can usually rescue their working relationship instead of foundering with ill will spawned in courtroom testimony.
``We sat down and judged each other eyeball to eyeball and reached an agreement,'' recalled Alessi. ``No one left until everything was in writing. The deal was done, it was documented, we shook hands and walked away.''
Alessi said the fee for solving the $650,000 dispute was ``nominal, but in the thousands. It was worth the money.''
Dispute resolution is growing statewide partly because of a statute that formed an office within the state's Supreme Court four years ago to encourage and regulate it.
The statute says in part that mediation will be confidential and neutral. It also established standards for the certification of mediators.
Statewide, judges have the authority to refer people to a dispute resolution evaluation session before formal court proceedings begin. Currently there are 550 certified mediators throughout the state.
Barbara Hulburt, who directs the court's Department of Dispute Resolution in Richmond, believes more businesses would opt for mediation if they were aware of the ramifications of going to court.
``When you think about it from a business perspective, it makes more sense,'' said Hulburt.
Most people don't realize that they have control over the outcome in mediation, she said, noting many confuse mediation and arbitration. In arbitration, like litigation, a third party makes the decision.
In South Hampton Roads, many merchants have become accustomed to the dispute resolution process introduced by the Better Business Bureau's Norfolk office.
Typically, a consumer will call the bureau to complain about a business. If the business is not a member of the bureau, the consumer is asked to write the business a letter. If the business is a member, the bureau calls the business to inform them of the complaint.
``We have some leverage with members,'' said Jerry Grohowski, president of the Norfolk bureau. ``They basically have a contract with us that said they will behave a certain way.''
Most problems are resolved when the business calls the consumer back, said Grohowski. But, ``We get a lot of people that simply say, `I won't deal with them any more. I just called to tell you they're bad guys.' We tell businesses that it costs more to get a new consumer than to keep an old one,'' he said.
The Norfolk bureau gets about 180 complaints a day and about 60 involve members. About 12 of those calls will actually require some form of negotiation, said Grohowski, and end up being referred next door to the BBB's non-profit Dispute Settlement Center, which was formed by the bureau as a separate entity five years ago.
Headed by Grohowski's wife, Laurie, the center is one of a handful across the state. Laurie Grohowski has a master's degree in conflict management and does dispute resolution as well as training and continuing education.
The center has 70 trained mediators and mentors 25 more in family and business cases at any given time. About 25 percent of the trainees are lawyers.
``One of the benefits of a business coming to mediation is confidentiality,'' she said, explaining that both sides sign forms promising just that. ``They don't have their dirty laundry or opinions aired in an open courtroom. They can really hash it out here.''
The average time to clear up a dispute is two to three hours and it can usually be scheduled within 10 days. ``This is a mediated contract and it's legally binding,'' she explained.
The process is considered less costly than going the traditional route with lawyers and judges. BBB members pay $35 per hour to $70 per hour depending on their membership level.Consumers pay less than 1 percent of their annual income.
Auto repairs and remodeling jobs are two issues that often end up in mediation.
``Apology is a very big part of mediation. So is respect,'' said Grohowski, noting consumers often just want to reach beyond the counter help to talk to decision makers in the company.
``What people are arguing about is money but the conflict is all these other issues that people don't normally talk about on their own, like how a problem impacted the consumer's life.''
Wiley Mitchell, general counsel for Norfolk Southern Corp., the Fortune 500 railroad based in Norfolk, sees the same process work for large corporations.
``When the principal combatants sit down and clear the air in the presence of an impartial mediator it can be very therapeutic,'' he said. ``Sometimes you see there is no clear right or wrong in this case.''
Norfolk Southern uses dispute resolution whenever possible in part to help keep down its legal bill, Mitchell said. The company, currently involved in more than 3,000 lawsuits, spends about $20 million annually in attorney fees and transactional expenses, he said.
I think dispute resolution empowers people,'' said Judge Louis Sherman of the Norfolk General District Court. ``Frankly, the decision may tend to be less arbitrary. I tell people that I may make a decision that neither of them may like.''
Sherman formalized the mediation process in his court in mid-June after two months on the bench.
Every day a person from the BBB's Dispute Settlement Center sits in on court for possible referrals. Sherman will continue, or delay, a case for a period of time to allow for mediation.
``From a business point of view I think mediation is excellent,'' said Sherman. ``You can resolve a dispute and maintain customer relations.''
Reactions vary when he suggests mediation. ``Some people are glad but others have been bubbling over for too long and have bad feelings,'' he explains, adding that he believes both parties have to be willing to try mediation for possible success.
``To get your day in court is pretty inexpensive,'' said Sherman, mentioning the $18 fee to file a lawsuit and a fee to serve the papers. ``But court can be a very intimidating atmosphere for a lot of people. People are under oath and they get very nervous and forget what they want to say or forget important papers. Mediation is more relaxed and much more informal.'' ILLUSTRATION: Color photo on cover by Christopher Reddick, Staff
Guy Tower...
Color photos by Christopher Reddick, Staff
Guy Tower, a managing partner at Kaufman and Canoles and a member of
the newly formed McCammon Mediation Group Ltd...
Guy Tower, center, works through a dispute with fellow lawyers Lisa
P. O'Donnell, left and A. William Charters...
Tazewell Hubard, a Norfolk attorney who started the Center for
Dispute Resolution...
Color photo by Beth Bergman, Staff
Judge Louis Sherman of the Norfolk General District Court...
Color photo by C. Kevin Elliott, Staff
Jerry Grohowski, president of the Better Business Bureau's Norfolk
bureau...and Laurie Grohowski, head of Dispute Settlement Center...
KEYWORDS: MEDIATION CONFLICT RESOLUTION by CNB