Businesses, officials, coaches and athletes have traditionally turned to litigation and arbitration as the first resort when negotiations become deadlocked.
However, the adversarial nature of litigation and arbitration frequently drives these protagonists (i.e. parties) further apart as they compete to win the case. A case won or lost often does not change the mindset of parties who continue to be adversaries and go on fighting in appeal after appeal. Motivated by the high costs, delays, stresses and uncertainties associated with litigation and arbitration, business is increasingly turning to mediation as the first resort.
In sports-related disputes, national and international sporting institutions, such as the Court of Arbitration for Sport, are now actively encouraging parties to attempt mediation at the first opportunity. The World Intellectual Property Organisation, which offers sports-related intellectual property dispute resolution services (sponsorship, merchandising, broadcasting etc.), also promotes mediation.
Nonetheless common misperceptions about mediation persist e.g. that it is a soft option or that it gives the impression that an athlete, coach or business is weak or exposed. As a result, opportunities to find the most satisfactory deal, while maintaining valuable business relationships, may be missed.
What is Mediation?
Mediation is a process by which a neutral person (i.e. not connected to either party to the mediation) assists athletes, team representatives, officials or business people, whose negotiations have reached a deadlock, to resume negotiation and work constructively towards a resolution of their dispute or difference.
In stark contrast to litigation and arbitration, which typically try to put the parties into the position they were in before the dispute, mediation endeavours to put as wide a spectrum of solutions as the parties are prepared to consider onto the negotiating table, and, through the process of assisting parties to better understand the other’s underlying legal, commercial and personal interests, and to contribute to future and stronger business ties.
Relationship building is particularly important in sport where the athlete-team/coach relationship is an important factor affecting performance. This also is true in business where considerable time and money is spent building relations that ensure the long term success of the business. The detrimental effect on relations are a disincentive to enter into, or an adverse by-product of, litigation or arbitration.
Litigation, arbitration and mediation encourage parties to confront each other, however a skilful mediator can minimise any deterioration in relations and assist each protagonist to better communicate the legal, commercial and often personal issues at stake in the negotiation. The dynamic of discussion is primarily focused on assisting each party to generate a variety of options, which best address the interests of the other party and thus, identifies a deal satisfactory to both parties.
It is this dynamic, which assists athletes, coaches, officials and businesses to a better understanding of the other’s underlying commercial and personal interests, to tailor future discussions to better meet these interests, where possible, and thus, preserve and strengthen relations.
Further, parties are considerably more likely to adhere to mediated agreements, than court or arbitral tribunal imposed outcomes, which are often subject to appeal after appeal.
What types of sports-related issues are suited to mediation?
Mediation is not a universally appropriate process. Litigation or arbitration is sometimes a better option. The key to the successful use of mediation is knowing whether and when to use it.
Circumstances where mediation may not be appropriate are when:
In my experience, mediation is beneficial to most disputes provided that the timing of the intervention is appropriate and parties are properly prepared. This is an area in which lawyers have a key role to play as the better prepared party will typically do better at mediation.
Common concerns about mediation
There can be a mistaken perception that mediation is a “soft option”, that a successful business does not require assistance negotiating, or that the inevitable outcome is to “split the difference”.
However, these considerations while important reflect a key misconception about mediation. The focus of mediated discussions is always on commercial options, with litigation or arbitration only used if a negotiated agreement cannot be reached.
In this writer’s experience, commercial matters that have been settled through mediation include:
Do legal representatives have a role?
The lawyer, whether external or in-house, has a vital role in sports-related mediation.
First, it is essential that a party entering into mediation have a proper understanding of its prospects and options if a negotiated settlement cannot be achieved. A party must have a thorough understanding of all the facts and risk factors affecting the case to make a fully informed decision on whether there is a better alternative to settlement offers made at mediation.
Second, the lawyer may be required to attend the hearing to demonstrate to the other party that the legal position being presented has substance and needs to be taken seriously. Effective presentation skills are vital to demonstrating credibility and concealing weakness.
In the Middle East, there has been huge investment in bringing sports into the region. In a recent report by Repucom (a provider of sporting intelligence to business), they were quoted to say “The Middle East and Asia are emerging as global giants in sports sponsorship and ownership and this trend shows little signs of slowing”. Repucom also concluded that the UAE is the largest single-jurisdiction source of title sponsorship funding in professional sports globally, with 37% of global investments in sport coming from the UAE. According to a PwC report, the EMEA (Europe, Middle East and North Africa) market is currently ranked as the second largest sports market in the world, and is worth an estimated US$44.8 billion, which represents nearly a third of the global market. In such a valuable and commercial industry, the types of dispute that can arise are varied and often involve complex legal issues. Reputation and relationships are key to maintaining a place in this market. Mediation should always be an option for any dispute given its primary advantage is to encourage parties to focus on devising commercial solutions that best meet their interests and preserve relationships, with litigation or arbitration prospects informing only whether there is a better alternative to a negotiated offer.
Niall Clancy () is an Associate in the construction & infrastructure disputes practice and a key member of Al Tamimi’s dedicated Sports Law practice. Niall is a highly experienced Alternative Dispute Resolution Lawyer with more than eleven years of professional experience, having acted for athletes, trainers sporting organisations in a wide range of sports-related disputes.