Mediation is emerging as a valuable tool for Northern Ireland’s family businesses

With issues focused around succession planning and leadership transition, conflict between family and business roles, distribution of profits, lack of professionalism and accountability, and communication breakdowns all playing significant roles in increasing pressure for families who work together in business, mediation and alternative dispute resolution (ADR) are becoming an increasingly helpful and popular tool for solving internal disputes.

A private practice barrister, I support clients working in family businesses across the UK and Ireland, spanning sectors including property, construction, commercial, agriculture, retail and more, to reach outcomes to disputes which satisfy all parties involved.

As in most businesses, it is not unusual for disputes to arise in the span of decades of working closely as a team. However, with a family business there is increased sensitivity when parties are in disagreement, as this can not only impact the professional relationship, but also risks negatively disrupting a family dynamic. Mediation is an increasingly important tool for ensuring that family relationships are protected and the family business can stay on a positive course for all parties involved as well as the wider staff who can feel the ripple effect.

Family businesses often involve deep emotional ties including long legacies synonymous with the family name and inter-generational relationships. Disputes can strain relationships, but mediation provides a collaborative environment to resolve conflicts without escalating tensions. In a mediation, the outcome reached represents a compromise by both parties, and in many cases all participants can walk away from a mediation feeling satisfied with the outcome rather than there being 'one winner.' The mediator acts as an independent third party and encourages open communication, helping family members maintain or even strengthen relationships rather than damaging them through adversarial legal battles.

Legal proceedings can be expensive and lengthy, with both a financial cost and a cost to morale for the team working in the business. Mediation and ADR processes are typically quicker, with the majority of sessions lasting about a day, and are less costly than the traditional route of litigation, allowing the business to resolve conflicts without diverting substantial financial resources or time away from operations.

Mediation offers flexibility in addressing the unique dynamics of a family business. Unlike court rulings where a judge makes the final decision, mediation puts the power in the hands of the disputing parties and allows the participants to tailor the pace, agenda and outcome of the discussion. This flexibility means that mediation can adapt to a wide range of disputes, from employment disagreements to complex commercial conflicts. The process encourages creative, mutually agreeable solutions that consider business goals and family values, offering outcomes that are better aligned with the specific needs of the family.

Family businesses often prefer to keep their internal disputes private. Mediation allows for discussions which are bound to confidentiality through a mediation agreement, ensuring sensitive issues – whether personal or business-related – do not become public as they might in court proceedings and sensitive information is kept out of the public domain.

Whilst a mediation session might be organised to resolve one particular dispute, through mediation, family members learn better communication and problem-solving techniques for the future. These skills can reduce future conflicts, enabling the family to handle disagreements more constructively, fostering a healthier working environment and smoother decision-making processes for generations to come.

By leveraging mediation, family businesses can resolve disputes in a way that balances both business and familial interests, protecting relationships a well as valuable resources like time and money. Mediation allows businesses to move forward swiftly and effectively, ensuring they remain focused on growth and success.

For more information visit www.michaelbready.com.