What to Expect at a Family Business Mediation

Family business mediation is the right starting point for most family business disputes. Specifically, it is faster, cheaper and more flexible than litigation. By contrast, many family business owners arrive at mediation without a clear picture of what is actually going to happen. As a result, they are unprepared for the day itself, the emotional dynamics, and the moments when difficult decisions need to be made. Importantly, the parties who prepare well for mediation get significantly better outcomes than those who do not. Crucially, the preparation is not just legal. It is also practical and emotional.

This page describes what to expect at a family business mediation from the moment you decide to mediate to the moment the settlement is signed. Specifically, it covers the preparation, the day itself, the dynamics in the room, the negotiation, and what happens afterwards.

How a family business mediation begins

In short, a family business mediation begins with a decision by both sides that mediation is the right next step. Specifically, the decision usually emerges from one of three situations. First, the parties agree to mediate before any legal proceedings are issued. Importantly, this is the ideal starting point. Second, mediation is suggested by the lawyers once proceedings have been threatened. By contrast, mediation may also be directed by the court after proceedings are underway, in line with the principle confirmed in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416.

Crucially, once the parties agree to mediate, they need to make several practical decisions before the mediation can be arranged. Specifically, they need to choose a mediator, agree the date and venue, agree who will attend, and agree the terms on which the mediation will take place. As a result, the practical setup typically takes two to four weeks. For the wider context, see why mediation is usually the right starting point.

Choosing the mediator

Importantly, the choice of mediator is one of the most consequential decisions in the entire process. Specifically, the right mediator can transform an apparently intractable dispute into a settled one. By contrast, the wrong mediator can fail to make progress in a case that should have settled. As a result, the parties should take the choice seriously.

In practice, the most useful mediators in family business cases share three characteristics. First, they understand family business dynamics, not just the law. Crucially, this is what separates family business mediators from purely commercial ones. Second, they have professional credibility with both sides. Specifically, this often means they are senior barristers who specialise in shareholder and family business work and have qualified as mediators. Third, they have a strong track record of getting deals done. Importantly, the parties should ask about the mediator’s settlement rate and the size and complexity of the cases they have mediated. For more on the role, see commercial mediator.

The position statement

Crucially, each side typically prepares a position statement that is exchanged with the other side a week or two before the mediation. Specifically, the position statement sets out the party’s view of the dispute, the issues, the legal arguments, the evidence, and the outcome being sought. Importantly, the position statement is the document the mediator will read first. As a result, it shapes the mediator’s initial understanding of the case.

By contrast, the position statement is not the same as a court pleading. Specifically, it is more candid, less procedural, and more focused on the underlying interests. Importantly, the best position statements identify not just what the party is asking for but why they are asking for it. As a result, the mediator gets a clear picture of the legal claim and of the human reality behind it. Crucially, the position statement is one of the most important pieces of work in the entire mediation. For more on this, see mediation advocacy.

The pre-mediation call

Importantly, in family business cases, the mediator often has a pre-mediation call with each side. Specifically, the call gives the mediator a private opportunity to understand the case, the people involved, and the dynamics. As a result, the mediator can prepare the mediation day more effectively. By contrast, mediations where the mediator has not spoken to the parties beforehand often start slowly while the mediator is still getting to grips with what is going on.

Crucially, the pre-mediation call is also an opportunity for each side to raise sensitive issues that they may not want to put in the position statement. For example, concerns about the other side’s emotional state, history of past tensions, or particular sensitivities that need to be handled carefully. As a result, the mediator can adjust the structure of the mediation day to take these into account.

The venue and the practical setup

Importantly, the venue matters more than people sometimes realise. Specifically, mediations are usually held at neutral premises, often the offices of one of the parties’ lawyers or a dedicated mediation centre. As a result, neither party feels they are on the other side’s territory. Crucially, the venue should have at least three rooms. One for each party to use privately, and one neutral room where the parties can meet together.

By contrast, the practical setup also needs to accommodate the family dynamics. For example, in cases where one family member is uncomfortable being in close proximity to another, the rooms should be on different floors or in different parts of the building. Likewise, the catering arrangements need to ensure that the parties do not have to encounter each other in corridors or kitchens during the day. Importantly, these practical points are easy to get right with planning but can derail a mediation if they are overlooked.

The morning: the opening

Crucially, the mediation day typically begins with an opening session. Specifically, the mediator gathers everyone together in the neutral room. Importantly, this is often the only part of the day when the parties are in the same room. As a result, it can be tense.

In the opening, the mediator usually says a few words about the process. Specifically, they explain the confidentiality of the mediation, the without-prejudice nature of the discussions, and how the day will run. Importantly, the mediator then invites each side to make a short opening statement. By contrast, the opening statements should be brief, set out the party’s position constructively, and avoid antagonising the other side. Crucially, a confrontational opening statement can poison the rest of the day. As a result, the mediation advocates should help the parties prepare opening statements that are firm without being inflammatory.

Importantly, some family business mediations skip the joint opening entirely. Specifically, where the family dynamics are particularly difficult, the mediator may decide to keep the parties apart from the start. By contrast, this should be agreed in advance rather than decided on the day. As a result, the mediator’s pre-mediation calls often include a discussion of whether a joint opening is appropriate.

The private sessions

Importantly, after the opening, the parties separate into private rooms. Specifically, the mediator then moves between the rooms throughout the day, exploring each side’s position privately. As a result, most of the real work of the mediation happens in these private sessions.

Crucially, the private sessions allow the mediator to do several things that would not be possible in a joint session. First, the mediator can test the strength of each side’s legal arguments without embarrassing them in front of the other side. Second, the mediator can explore what each side actually needs from the settlement, as distinct from what they are publicly demanding. Third, the mediator can identify possible compromises and trade-offs. Fourth, the mediator can help each side think through what would happen if the mediation does not settle.

Importantly, the private sessions are confidential between the mediator and the party. Specifically, the mediator does not share what is said in private with the other side without permission. As a result, the parties can be candid with the mediator in a way that they could not be in a joint session. Crucially, this confidentiality is one of the core features of mediation and is essential to the process working.

The negotiation

By contrast, as the day progresses, the focus shifts from exploration to negotiation. Specifically, the mediator begins to carry offers and counter-offers between the rooms. Importantly, the parties usually take some time to move from their opening positions. As a result, the early offers often look unreasonable to the other side. Crucially, this is normal and not a sign that the mediation is failing.

Specifically, family business mediations often follow a recognisable pattern. The parties typically start far apart. The first offers and counter-offers narrow the gap by small amounts. As the afternoon progresses, the movement becomes more significant. By the late afternoon or early evening, the parties are usually close enough that a settlement becomes possible. Importantly, the moment of agreement often happens in the last hour or two of the day. As a result, the parties need to be prepared for a long day. By contrast, family business mediations rarely settle in the morning.

The emotional dynamics

Importantly, family business mediations have an emotional dimension that ordinary commercial mediations do not. Specifically, the parties are dealing with each other not just as commercial counterparties but as family members. As a result, the dynamics can include grief, anger, betrayal, guilt, love, and many other emotions that have no direct legal relevance but profoundly affect the process.

Crucially, the best family business mediators recognise this and work with it. Specifically, they may encourage the parties to acknowledge what has happened between them as well as to discuss the legal claim. Importantly, an apology or an acknowledgement at the right moment can unlock a settlement that no amount of legal argument could. By contrast, ignoring the emotional dimension and trying to treat the mediation as a purely commercial negotiation usually fails.

In practice, the emotional moments at a family business mediation are often the most important. Specifically, the moment when a sibling acknowledges what another sibling has felt for years, or when a parent admits a mistake, or when a family member apologises for something said in anger. Importantly, these moments cannot be planned. By contrast, they need to be allowed to happen.

The role of the mediation advocate

By contrast, the role of the legal representative at a mediation is significantly different from their role in court. Specifically, the mediation advocate is supporting the client’s negotiation rather than running the case themselves. As a result, the skills required are different.

Importantly, good mediation advocates do several things on the day. First, they help the client present the case constructively to the mediator and to the other side. Second, they support the client through difficult moments and help them think clearly when emotions are high. Third, they help the client read the room and identify when to move and when to hold firm. Fourth, they manage the relationship with the other side’s advocate so that the process remains productive. Finally, they help the client commit to a deal when one is on the table. Crucially, this last role is often the most important. For more on this, see mediation advocacy.

The moment of decision

Crucially, every family business mediation reaches a moment when the parties have to decide. Specifically, the offers on the table are as good as they are going to get, and the parties have to decide whether to accept the deal or walk away. Importantly, this moment is harder than it sounds.

By contrast, the temptation in the moment of decision is to push for one more concession. Specifically, the party is tired, emotional, and wants to feel they have won. Crucially, this is often the moment when settlements fail. As a result, the experienced mediation advocate helps the client recognise the moment of decision for what it is and make a clear-eyed choice. Importantly, the question is not whether the deal is everything the party wanted. By contrast, it is whether the deal is better than the alternative of walking away and continuing the dispute.

The settlement agreement

Importantly, where the parties reach agreement, the terms are written up into a settlement agreement that is signed on the day. Specifically, this is a binding legal document that records what each party has agreed to do. Crucially, the settlement agreement needs to be drafted carefully. As a result, the work of drafting often continues into the late evening after the parties have agreed the headline terms.

By contrast, the settlement agreement should not be left to be drafted later. Specifically, where the parties go home with only a heads of terms or a verbal agreement, the deal can fall apart in the days that follow. Importantly, every successful family business mediation should produce a signed, binding agreement on the day. For more on what the settlement agreement should contain, see settling a family business dispute.

What can be included in the settlement

Crucially, the settlement of a family business mediation can include many things that a court could not have ordered. Specifically, the typical settlement combines legal and non-legal elements. Importantly, the legal elements often include a buyout of one party’s shares, governance changes, undertakings about future conduct, and confidentiality obligations. By contrast, the non-legal elements often include an apology, a commitment about how family events will be handled, an agreement about communication going forward, and recognition of contributions that have not been acknowledged.

Importantly, the non-legal elements are often the most valuable parts of the settlement. Specifically, they address what the parties actually needed from the process. By contrast, the legal elements address what the lawyers can deliver. As a result, the best family business settlements combine both, in a way that resolves the dispute on the page and in the family.

What happens after the mediation

By contrast, the work does not end when the settlement agreement is signed. Specifically, the parties have to implement what they have agreed. Importantly, the implementation usually involves several steps. First, the legal documents giving effect to the settlement need to be prepared and executed. For example, a share purchase agreement, an amended shareholders’ agreement, or revised articles of association. Second, the financial payments need to be made on the agreed timetable. Third, any governance changes need to be implemented. Finally, any commitments about family conduct need to be honoured.

Crucially, the implementation is where some mediated settlements fail. Specifically, the parties may agree to terms on the day that turn out to be impractical when they come to be implemented. As a result, the experienced mediation advocate helps the client think through the implementation before signing rather than after. Importantly, this is one of the reasons why the settlement agreement should be drafted carefully and signed on the day rather than left to be tidied up later.

If the mediation does not settle on the day

Importantly, not every family business mediation settles on the day. Specifically, the parties may run out of time, or may not be able to bridge the gap, or may need to take advice on a particular issue that has arisen. By contrast, this is rarely the end of the story. Crucially, many family business disputes settle in the days or weeks following an apparently unsuccessful mediation.

In practice, the experienced mediator often continues to communicate with the parties after the day itself. Specifically, the mediator may carry further offers between the parties, help them think through particular issues, or simply give them time to reflect. Importantly, the costs of follow-up mediation work are usually a fraction of the cost of the day itself. As a result, the parties should not treat the end of the mediation day as the end of the process.

Even where no settlement is reached, the mediation produces benefits. Specifically, the issues are clarified, the parties’ positions are tested, and the costs position is preserved. As a result, parties who have engaged in mediation in good faith are in a much better position on costs in any subsequent litigation than parties who have not.

How to prepare for a family business mediation

Crucially, the preparation for a family business mediation matters more than the preparation for most other commercial mediations. Specifically, the family dynamics, the emotional content and the breadth of the issues all require careful thought before the day. As a result, the following steps usually produce the best outcomes.

• First, choose the mediator carefully. Importantly, the mediator’s experience of family business work matters more than their seniority in general.
• Second, prepare a thoughtful position statement. Specifically, the statement should set out the legal case but also the underlying interests and the human context.
• Third, identify what you actually need from the settlement. Importantly, this often turns out to be different from what you are formally asking for. As a result, the early identification of underlying interests is essential.
• Fourth, think about the emotional dimension in advance. Specifically, what do you need to say? What do you need to hear? What would you regret not having addressed by the end of the day?
• Fifth, decide who should attend. Importantly, the attendance should be agreed with the other side rather than imposed.
• Sixth, prepare for a long day. Specifically, family business mediations rarely settle in the morning. As a result, you should expect to be there until the evening.
• Seventh, take legal advice on what you can settle for. Crucially, the settlement on the day will need to be implemented in legal documents.
• Finally, prepare emotionally. Importantly, family business mediations are unusually demanding. As a result, the parties who arrive rested and ready usually outperform those who do not.

Frequently asked questions

How long does a family business mediation take?

Typically, a family business mediation lasts one full day, usually starting at 10am and finishing in the early evening. Specifically, in larger or more complex cases, the mediation may extend into a second day. Importantly, the parties should expect a long day. As a result, those who plan for an early finish often find themselves in difficulty by mid-afternoon. By contrast, those who plan for a late finish are usually pleasantly surprised if the mediation settles earlier.

Do the parties have to meet face to face?

Not necessarily. Specifically, while many family business mediations include a joint opening session, the bulk of the day is spent in separate rooms. Importantly, where the family dynamics are particularly difficult, the parties may not meet face to face at all. By contrast, in many cases the parties find that being in the same room with the mediator and the other side, even briefly, helps to humanise the dispute. Crucially, the decision about whether to have a joint opening should be made in advance with the mediator.

What does the mediator actually do?

In short, the mediator facilitates a negotiation between the parties. Specifically, the mediator does not decide the dispute, give a judgment, or impose a solution. By contrast, the mediator helps the parties identify the issues, explore options, and reach a settlement. Importantly, the mediator carries offers between the parties, tests the strength of each side’s arguments privately, and helps both sides think through what would happen if the mediation does not settle.

Is the mediation confidential?

Yes. Specifically, the discussions at the mediation are confidential and without prejudice. As a result, nothing that is said at the mediation can be referred to in any subsequent court proceedings. Importantly, this confidentiality is one of the core features of mediation. By contrast, the eventual settlement agreement is a binding legal document. Crucially, the confidentiality protects the candour of the discussions, which is essential for the mediation to work.

What if I do not feel ready to mediate?

Importantly, the readiness to mediate is itself a matter for advice. Specifically, some parties want to mediate too early, before the issues have crystallised. By contrast, some delay too long, by which time positions have hardened and costs have escalated. As a result, the question of when to mediate is strategic. Crucially, early advice from a direct access barrister can help you identify the right moment.

Further reading on this site

• Family Business Disputes (main page)
• Why Mediation Is Usually the Right Starting Point
• Settling a Family Business Dispute
• The Cost of Family Business Litigation
• Unfair Prejudice Petitions
• The Legal Framework for Family Business Disputes
• Family Constitutions and Family Forums
• Commercial Mediator
• Mediation Advocacy
• Mediation Knowledge Hub
• Direct Access Barrister
• Preventing Family Business Disputes

Get advice on your situation

A well-prepared family business mediation is the single most powerful step you can take to resolve a family business dispute. Specifically, the preparation matters as much as the day itself. As a result, early specialist advice on mediation is one of the most valuable investments you can make. I act as a direct access barrister, commercial mediator and mediation advocate in family business disputes throughout England and Wales.

Call 020 4538 0246, use the contact form, or book a call directly. In addition, my book Winning in Commercial Mediation covers the mediation process in detail, and my forthcoming Winning in Family Business Disputes covers the family business mediation context specifically. See also my published work on shareholder disputes. Organisations like Family Business United also publish useful guidance for family business owners.

Important disclaimer: This page is provided for general information purposes only and does not constitute legal advice. The content may not be legally accurate for your situation or at all. You must not rely on anything on this page in respect of your legal rights. Before taking or refraining from taking any legal action, you should seek advice from a qualified lawyer. I disclaim any and all liability for any loss, damage or expense howsoever caused by reliance on the contents of this page. If you would like advice on your specific situation, contact me here.