Mediation as a Conflict Strategy

In the previous articles in this series, I focused on preparation and role allocation in mediation. A question often follows: if the parties are prepared, have assessed their BATNA and WATNA, know their bargaining range, have aligned internally, and have the relevant decision makers at the table, why involve a mediator at all? Does a mediator add anything beyond structure and process management?

When does it make sense to involve a mediator?

At the outset, not every negotiation or settlement discussion requires a mediator. In many cases, once the facts have been properly analysed and a realistic litigation risk assessment has been carried out (see Part 2), the parties can reach agreement (often with the support of counsel).

A mediator tends to add most value where the existing setup has run out of road:

• discussions produce no movement and the same arguments keep repeating
• the conflict has escalated to the point where direct dialogue has become difficult and the atmosphere no longer supports constructive dialogue
• negotiations need to be run in a more disciplined and efficient way, but neither side is willing to relinquish control of the process, and attempts to structure the discussion are met with resistance

Example: Two shareholders are in dispute over the distribution of profits from previous years. Both sides are represented by lawyers. In a settlement meeting, each side repeats its position and presents figures supporting its own case. One side tries to focus the discussion on a specific issue. The other resists because even an attempt to shape the agenda is read as a tactical move. The discussion goes in circles. Two hours later, the parties are effectively where they started.

What is missing might be someone whose interventions are not immediately interpreted through a tactical lens. Every contribution made by counsel is coloured by representation. A lawyer acts for a client, and the other side will often treat attempts to steer the discussion with suspicion. A mediator jointly appointed by the parties, with no stake in the substantive outcome, can guide the process without that guidance automatically being taken as an attack. At the same time, decision making remains with the parties rather than being handed to a court or arbitral tribunal.

The Mediator’s Working Style

In court proceedings, parties do not get to choose the judge assigned to the case. In arbitration, they may nominate or appoint arbitrators, but both judges and arbitrators remain bound by procedural law and institutional rules. Mediation is different. The parties can choose not only the mediator, but also deliberately take that person’s style and approach into account. There are no rigid procedural rules. The structure of the process and the way mediations are run can be tailored to the dispute itself. This strategic degree of choice is often underestimated in practice. The main legal boundary, where the Austrian Civil Mediation Act applies, is that an accredited mediator may neither give legal advice nor impose a decision (see details here).

Choosing a mediator is not simply a question of style. Professional background, seniority, and experience influence whether the mediator is perceived as both credible and neutral. A mediator whose authority or qualifications are questioned by one side will rarely be able to run the process effectively (see also here). Depending on training, experience, and temperament, mediators work in very different ways. Those differences directly shape the dynamics of the negotiation. A useful framework is provided by Leonard Riskin in Decisionmaking in Mediation: The New Old Grid and the New New Grid System (Notre Dame Law Review, 2003). Broadly one can distinguish the following approaches:

• A facilitative mediator structures the conversation and creates a framework within which the parties reach their own conclusions without substantive input from the mediator.
• A directive mediator takes a more active role by challenging assumptions, exposing inconsistencies, and sharpening the parties’ understanding of the real-world consequences of different options.
• An evaluative mediator goes further by openly discussing factual and legal issues, bringing the process closer to expert determination, conciliation, or arbitration. At the far end of the spectrum lies Med Arb, where the mediator moves into a decision making role if settlement efforts fail.
• A transformative mediator focuses less on reaching settlement and more on shifting the quality of the interaction between the parties, restoring communication and decision-making capacity as the primary goal.

Each approach has strengths and risks. A facilitative model may create the space in which parties reassess positions and develop their own solutions. But where there is no movement, discussions may simply stall. A more interventionist style, such as testing assumptions or highlighting consequences, can help parties see issues that had remained unspoken, but carries the risk that the mediator will be seen as partial. In jurisdictions such as the United Kingdom and Australia, more active intervention is often standard practice. In many parts of continental Europe, the facilitative model is more often treated as the outer limit. In practice, mediators move between these approaches depending on what the situation requires.

That becomes visible in five core functions.

1. Designing and Managing the Process

Litigation and arbitration run on predetermined tracks: timetable, formal roles, pleadings, hearing, decision. Mediation does not. The mediator builds the process with the parties around what the dispute actually requires.

That usually begins with individual calls, preparatory meetings, written briefs, or position papers. From there, the mediator proposes a framework: who should attend, in what configuration, and how the process should be structured. The framework is then discussed and adjusted with the parties. That is a fundamental distinction from contentious proceedings. The process is shaped by the conflict rather than by procedural architecture.

Unlike litigation, where pleadings define and limit the terrain, mediation allows the agenda to be built jointly and to evolve as the process develops. On that basis, the parties can decide which issues should be addressed first, who needs to be in the room for each discussion, and how much time is realistically required. The framework can also shift during the session itself. If discussions stall, the mediator may restructure the meeting, suggest caucuses, propose breakout sessions, or facilitate consultation with counsel. The process remains flexible because it is actively managed rather than governed by rigid rules.

2. Separating the Different Layers of the Dispute

Disputes that reach mediation are rarely one dimensional. What appears in litigation as the formal claim is often only part of the problem. Alongside legal and commercial issues, there may be operational tensions, strategic disagreements, allocation disputes, value conflicts, and relationship dynamics operating at the same time. Sometimes openly. Often below the surface.

An example: Two shareholders dispute historic profit distributions. In reality, the conflict may also concern who controls the company’s future direction, disappointed expectations about the partnership, and trust that has eroded over time. If those issues remain entangled, the discussion tends to stay stuck. Proposals are rejected because they come from the other side. Concessions are read as weakness. If that dynamic is left unaddressed, distrust dominates the room to such an extent that a rational discussion of the substantive issues becomes difficult.

In commercial disputes, communication failures, misunderstandings, and frustrated expectations can be as influential as the underlying legal or financial position. Where an ongoing business relationship matters, ignoring that dimension can be costly. The mediator identifies which layers are actually driving behaviour and helps separate them: commercial issues as commercial issues, relationship issues where they belong. Only then does a productive discussion about the real points in dispute often become possible. How far that exploration needs to go depends on the case. Not every dispute requires attention to interpersonal dynamics. But where those dynamics are blocking progress, they cannot simply be ignored.

3. Getting to the Core Issues

Preparation is the foundation of any mediation, but it remains a snapshot in time. Each party typically arrives with a developed position: BATNA, bargaining range, priorities What the other side will actually bring to the table, which interests sit behind its stated position, and where its pressure points lie often remains speculative until the mediation begins.

Once both sides are in the room and explain how they see the dispute, a more complete understanding starts to emerge. That understanding often shifts quickly. A demand that appeared non negotiable turns out to be driven by a specific concern no one had fully appreciated. A stance that looked like obstinacy may reflect internal constraints or commercial dependencies that were never visible from the outside. Earlier litigation assessments may need to be revisited once it becomes clear that the other side values certain issues very differently. Sometimes a dispute pursued for years as a legal question proves, at its core, to have been a communication failure.

The mediator creates the conditions in which that clarity becomes possible, structures the discussion so that each side can present its case properly, checks whether what has been said has in fact been understood as intended, and ensures that the parties are working from a shared factual and strategic baseline. Serious negotiation often commence only at that stage, when each side has a more realistic sense of what it is actually dealing with across the table.

4. Stress Testing Positions

The aim of mediation is neither settlement at any cost nor a quick deal whose consequences have not been thought through. Any solution should be legally sound, commercially rational, internally supportable, and capable of implementation.

An example: A company claims 100,000€ under a supply agreement. The supplier delivered critical components late, causing production delays. The parties have prepared thoroughly, completed their litigation risk analysis, and stated their positions. Yet once the session begins, positions harden. The mediator pauses and, in confidential caucuses, asks the following questions. What happens if there is no settlement? Three years of litigation. 20,000€ in costs per side. 10,000€ already spent. A 75 percent chance of success. What is the real value of this claim once time, cost, and risk are taken into account? Who supplies the components in the meantime? Is there another supplier with the required specifications, certifications, and short term capacity? What would transition actually cost?

If settlement later comes into view, the mediator’s role does not end there. The mediator also helps test whether the proposed outcome will hold internally and can in fact be executed. Is the solution supported within both businesses? Are additional stakeholders required? What still needs to happen after the session?

The mediator does not provide answers, but surfaces the questions that matter and might not have been asked yet in those terms, creates room for internal reflection, and allows the parties to compare their earlier assumptions with the commercial reality now visible in the room. In the best cases, that produces a resolution grounded in real interests and informed judgment rather than negotiation momentum alone.

5. Recognising and Naming the Limits

Not every dispute is suitable for mediation, and not every mediation ends in settlement. The mediator is not there to preserve the process for its own sake, but to serve the parties. If it becomes clear that mediation is the wrong forum, or that settlement is unrealistic under the present conditions, that should be addressed openly.

This can arise in different ways. Sometimes the parties simply cannot reach a common outcome, however willing and well prepared they are. A party is plainly not there to negotiate but to buy time or gather information. A power imbalance is so significant that one side cannot negotiate on anything approaching equal footing. Critical information is missing. Or a party appears ready to agree under pressure without understanding the consequences. In such circumstances, it is the mediator’s task to raise the issue, pause the process, or, if necessary, bring it to an end.

That also reflects the limits of the instrument itself. A mediator does not decide the dispute and does not provide legal advice. Where further advice is needed, whether legal, tax, or otherwise, the mediator should say so. Section 16 of the Austrian Civil Mediation Act expressly requires accredited mediators to direct parties toward appropriate advice. A mediator who keeps those boundaries clear strengthens the process rather than weakening it.

Takeaway

Preparation and clear internal alignment create the conditions for an efficient mediation. What follows depends in large part on who leads the process.

An experienced mediator does more than manage logistics. The mediator works actively with what emerges in the room: separating issues, sharpening the decision making framework, asking difficult questions, and recognising when the process has reached its limits.

Decisions remain with the parties. Legal advice remains with counsel. The mediator’s role is to make meaningful negotiation possible on that basis.

Which style is right depends on the dispute, the participants, and the objective of the process. Choosing the mediator is therefore not a side issue. It is part of a sound conflict strategy.