Arlington Chamber of Commerce Blog

 

Divorce and Your Business Part II: Make Love, Not War

by Admin 22. April 2015 04:48

by James Korman, Shareholder, Bean, Kinney & Korman, P.C. 

Not every divorce has to be a nuclear war. Going to court is always an option. But it is expensive, stressful, slow and at the end a judge who doesn’t know you or your spouse is going to make a decision that can affect the rest of your life, not to mention your business and your fortune. Should court be a last resort rather than a first choice?  Is there an alternative? Absolutely.

Alternative Dispute Resolution (“ADR”) is the trial of the new millennium. Nowadays, I have ADR in more cases than not.

What is alternative dispute resolution? As the name suggests, it is an alternative to going to court to resolve your issues. ADR is often the first choice to resolve disputes related to a divorce. The most common types of ADR are mediation, neutral case evaluation, collaboration and arbitration.

In most cases, these are voluntary. Both parties have to agree to participate.  

Neutral Case Evaluation (“NCE”)

An experienced and impartial professional, usually a divorce lawyer or a judge, looks at a summary of the facts and issues in the case with supporting documents.  The summaries are prepared by the parties’ lawyers. In addition, each party usually gives the Neutral Case Evaluator any settlement offers that may have already been shared with the other side, and as yet undisclosed confidential settlement proposals.  

The NCE can then offer his/her opinions about how realistic each party’s positions are. Sometimes parties do not believe what their own lawyer is telling them. But when an experienced neutral person tells them their position is unrealistic, there should be a better chance to move closer to settlement.  

Mediation

Mediation is the most frequently employed ADR method in divorce cases. The parties hire a mediator, although some courts will provide mediators without charge. The mediator is generally an experienced judge or lawyer. Occasionally parties might employ a mental health professional to mediate issues involving custody of children and other parenting issues. The mediator doesn’t decide the issues. His/her job is to get the parties to “yes”. Often, the mediator will evaluate each party’s respective positions on various issues.  Why else would you employ a mediator who is an expert?

It is customary to give the mediator an advance statement of each party’s position and to designate the issues that have to be mediated.  You can mediate with or without counsel present.        

On the day selected for the mediation, the mediator, the parties and their attorneys assemble. Usually, the mediator will shuttle back and forth between the two parties and see if the gap between their respective positions can be bridged. There can be no settlement of any issue unless both parties agree to terms on that issue.  

It is advisable, to say the least, to memorialize in writing any agreements that are reached at mediation, and do it then and there. Delay can undo everything that everyone worked so hard to resolve. 

Before signing an agreement, I always say to my clients, “You have to be okay with this deal five days from now, five months from now and five years from now.”  

Collaboration

The parties sign contracts with lawyers who are certified in Collaborative Practice. The contract commits the lawyers to work with the parties to settle the case. If the case does not settle, the collaborative lawyers will not represent you in court. You will each have to retain another lawyer to handle that. At a collaborative session, the parties and their counsel work on settling the case with the assistance of financial advisors, mental health professionals, accountants or whatever experts might be able to help. At collaborative sessions the advice attorneys give, which you might expect to be confidential, is openly shared with all present.  

Again, the goal is for the parties to reach a written agreement resolving their issues.  

Arbitration

An arbitrator is in essence a judge you pay. So why wouldn’t you go to trial and use a judge the state pays? With arbitration you can choose your judge, you can choose your schedule and the proceeding is private. While arbitration is not a court trial, it is not a negotiation. Formal rules of evidence may be more relaxed, but it is essentially a trial. Both sides offer their testimony and evidence, both sides argue their case and the arbitrator decides the case.

Conclusion

With ADR, you get control over the schedule, privacy, input and flexibility. If you go to trial, the judge makes his/her decision, and that’s it.  If you don’t like it, all you can do is appeal. More expense, more delay, more stress.  

With ADR, if someone makes a settlement proposal, you can suggest another approach or fine tune certain terms.

For example, one party can offer to give up the equity in the house in exchange for his/her interest in the business. By contrast, a trial judge is likely to order the house sold and the proceeds divided.  Neither party will have the house. 

If ADR doesn’t resolve everything, you can still resort to the courts, if you have to. Ultimately, how you choose to proceed is up to you.

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