Family Business Disputes

The business is an extension of the family’s interests and business decisions are often influenced by feelings of responsibilities to family members who may or may not be involved in the business. This gives rise to strong emotional feelings of guilt, anger, jealousy, fear which need to be addressed in the process of resolving such disputes and enable greater understanding and communication. Such conflicts when successfully resolved will strengthen the business and even the family. A family business decision maker needs to tread a narrow road between business decisions and the impact of those decisions on the family, often giving rise to conflict as follows:
  • Control by Founder and direction of business
  • Responsibilities and recognition of contributions by family members
  • Communications in the business and within family
  • Favoritism and nepotism
  • Succession
Such disputes if not properly managed will impede growth of the business and the conflicts may even kill off the business. The mediation process is particularly suited to resolve disputes arising from family businesses because
  • Disputants have an opportunity to hear each other early in the process;
  • Decisions are made by disputants themselves which are uniquely suited to their circumstances;
  • Issues in dispute and any settlement are confidential
  • The process is faster than litigation or arbitration and businesses liberated from the conflict sooner.