The option of going for mediation can be far more useful for fractious couples and families than pressing the nuclear button of calling a lawyer, so this legal expert argues.
A staple item of commentary in the world’s wealth management sector is divorce. Large fortunes can be broken up and a good deal of structuring and legal activity is connected to handling marital break-ups.
One option in the divorce toolkit is “mediation.” To talk about how this works in the context of English and Welsh law (the situation is different in Scotland) is Arabella Murphy. She is founding director of Propitious Ltd, a strategic consultant and mediator for wealthy families and individuals.
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You can’t un-spill milk.
Often, by the time mediators see a family in dispute, the bomb has already gone off - harsh words shouted, longstanding grievances aired, perhaps even an interview with Oprah.
So before you reach for a lawyer to send an angry letter, consider mediation. Mediation is known as an extremely effective way to help parties find a way of resolving a current dispute and moving forwards, with or without an ongoing relationship. You don’t have to be engaged in litigation to find it helpful. But when the parties are a family, offers of settlement may not be made - or may fall on deaf ears – unless there is some exploration of how the problem arose. A row over a will might just be the denouement of decades of unspoken hurt. And how can you settle a rupture in the family business if its origins lie, not in a commercial difference of opinion, but in how family members have felt for many years?
Few families are perfect, and most will have some perception of favouritism, rivalry, unkindness (deliberate or casual) or hierarchy. So, if families have tensions anyway, imagine the additional pressure when family members are business partners as well. And of course, family rows rarely have the precision of a commercial dispute: long-remembered private remarks, wounding events and hurtful slights may emerge as years’ worth of laundry is washed in public.
Families who recognise the potential for difficulties prepare themselves for succession – perhaps through a ‘family governance’ exercise, aimed at establishing a set of ground rules or principles that everyone can agree, and a common vision of the future. But many parents and children all simply assume that the children will work together in the business – preparation (if any) is focused on training them for that, and little thought is given to whether they and the business will prosper. The ingredients are all there for success, or disharmony. And if there is a crisis later, any resolution has to deal both with the business issue, and with family distress.
I recently worked with a group of siblings who had inherited a business without any preparation or discussion. Their previously good relationships contained small unhappinesses and resentments that they hadn’t spoken about, which bubbled up when they tried to run a business together. There was no big dispute, but they reached a point where, rather than offer an idea to be shouted down, they hardly spoke at all. The process we followed - a hybrid of family governance and mediation - resulted in them deciding to sell the business, as they couldn’t find a business model on which they could all agree, and it was more important to begin to repair their relationships.
It’s not inevitable that the business has to be sold or one party leave, although the parties might make a positive choice to do that. Whether they stay in business together or not, they will still be related, and it’s unlikely that they will choose never to meet again. It may be hard to restore the harmony (or illusion of harmony) that existed before, but a new relationship can emerge if the parties can empathise (understand where the other/s may be coming from), feel that they have themselves been heard, and lay the groundwork for future communication and ways to deal with differences.
The many schools of therapy, counselling and coaching can have a valuable role to play in helping to dissipate the feelings caused by past events - so, before you reach for a lawyer to send an angry letter, consider mediation; it has a practical focus on helping the parties find their own way to move past the dispute and look at the future. Acknowledge how the milk came to be spilt, and agree ways to ensure that the future is different.