partnership-disputesBy Nicole L. Voigt, Esq., Attorney at Law

The Collaborative Concept

I recently had the privilege of completing a 16 hour training in Collaborative Law conducted by the Hunterdon County Bar Association. Generally speaking, Collaborative Law is an emerging area of alternative dispute resolution. In this process, the disputing parties retain neutral professionals (“neutrals”) who review and advise on specific disputed issues in a stepwise process. This collaboration is then used to build consensus around a mediated settlement, with each party represented by legal counsel throughout the process.

This approach facilitates well reasoned settlements with an understanding of the applicable law. The parties have the added value of self-determination as oppose to a black-or-white order of the Court. They each participate in crafting the terms of settlement, and typically save time, money, and peace-of-mind which would otherwise be consumed in litigation. Studies routinely show that satisfaction with mediated settlements is on average greater than with litigated outcomes. The collaborative process can remove obstacles that sometimes interfere with traditional mediation.

Collaborative Law emerged in the context of divorce, and has successfully been applied to elder law disputes as well. See Bob Shanahan’s article, “Collaborative Mediation and Family Disputes.” For example, a divorcing couple can participate in collaborative settlement discussions, each represented by his and her own attorney, and jointly obtaining the guidance of neutral professionals. A collaboratively trained family therapist can facilitate moving past resentments and determining a parenting schedule. A collaboratively trained financial advisor can assist each party in determining what they require to become financially independent: for example, can one party truly afford to keep the house. A collaboratively trained accountant can advise on terms necessary to resolve accounting issues necessary for valuing businesses or unwinding joint finances. The role of the neutrals adapts to the particular circumstances of the divorcing couple.

Applying Collaborative Law to Partnership Disputes

The collaborative process can further be applied to other areas of law, including partnership disputes. Whether a business partnership, a domestic partnership, or a combination of both, the collaborative process should at least be considered by partners facing a contentious breakdown in the relationship.

As with divorce matters, each party to the partnership is represented by an attorney of his or her choosing, obtaining confidential, independent, objective legal advice knowledgeable of that person’s specific concerns. However, many issues can interfere with a mediated resolution of a business dispute, such as: how to value business or real estate assets; anger over wrongdoings; confusion about what will happen in a court ordered partition of real estate; concerns about final accountings for tax purposes; disagreements in how to wind-up joint ventures; and fear about how and when to walk away and what will happen next. The collaborative process brings in mutually agreed upon and properly trained consultants to work jointly with the parties in tackling these issues. Such professionals can include appraisers, realtors, personal and business counselors, accountants, and whomever else is identified as having expertise relevant to a core issue in dispute.

Confidentiality and Privilege in the Collaborative Process

It is essential that parties choosing to participate in the collaborative process, as well as the attorneys and neutral professionals retained to advise, sign a carefully drafted participation agreement. The process is not effective if the parties cannot trust the neutrals advising on the case or if the attorneys potentially appear incentivized to encourage litigation. Through the participation agreement, the parties agree to confidentiality and evidentiary privilege, and additionally agree that, if a settlement is not reached and they are forced to litigate, they must retain new attorneys for the purposes of litigation. With these ground rules in place, the collaborative mediation meetings are most conducive to resolving the disputed issues.

The New Jersey Family Collaborative Law Act protects the confidentiality of the collaborative process when applied to matters arising under the family and domestic relations laws of New Jew Jersey. For disputes which are purely business in nature, the Collaborative Law Act confidentiality and evidentiary privileges are not available. However, New Jersey’s Uniform Mediation Act can be applied to create the evidentiary privilege and confidentiality necessary to foster a truly collaborative mediation. With a properly drafted participation agreement containing language required by the statute, the neutrals hired to review and evaluate the dispute cannot be compelled to disclose communications nor compelled to testify. To create this privilege, the participation agreement must be skillfully drafted with certain language and signed by all involved.

In addition to completing the 16 hour training in Collaborative Law, Bob Shanahan and I have completed the 40 hour civil mediation training conducted by the New Jersey Association of Professional Mediators. Bob and I have additionally received training through the Courts and served as mediators for the Courts. While litigation has its place, we highly recommend mediation and the collaborative process are an alternative to litigation.

nicole-voigtNicole L. Voigt focuses her law practice in commercial and residential real estate transactions, as well as related contracts, leases, land use, zoning, and environmental matters, and tax assessment appeals. Ms. Voigt additionally practices landlord-tenant law, including commercial lease negotiations for landlords or business tenants, and representing residential landlords in all aspects of the landlord/tenant relationship. Ms. Voigt is a Court appointed landlord tenant mediator. Ms. Voigt also focuses in business formation and business contracts. Ms. Voigt offers litigation services arising from business, real estate, environmental, land-use, landlord-tenant, collections, construction, and administrative permitting and proceedings. Ms. Voigt received her Juris Doctor from Northeastern University School of Law in 2000, and obtained licensure in Massachusetts (2001), Pennsylvania (2008), and New Jersey (2008). Ms. Voigt received a Bachelor of Science degree in Ecology & Systematic Biology with a minor in Statistics in 1995 from California Polytechnic State University. Ms. Voigt enjoys using her interdisciplinary background to facilitate land use matters and remediation of contaminated sites pursuant to the Site Remediation Reform Act.

You may contact Nicole at (908)751-1551, or [email protected].