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University of Miami Business Law Review

Document Type

Note

Abstract

This paper focuses on the ways that collaborative law can be used to resolve family business disputes. Such disputes can get ugly and leave families and businesses in shambles after years of fighting and even litigation. Such disputes can involve those between divorcing partners, parents and children, extended family members, and new and ex partners. Sometimes, these disputes cannot be resolved, forcing family members to sell all or part of the company. Moreover, when families try to resolve disputes through litigation, they end up spending a lot of money. Mediation is often used to resolve disputes in the family business context, but this note shows why collaborative law may be more suitable for resolving family business disputes. Collaborative law stems from the family law field, particularly in the divorce context. This form of alternative dispute resolution requires that parties share retained experts, disclose all facts related to the dispute, and be committed to a win–win resolution. Furthermore, collaborative law requires attorneys to be committed to settling the dispute, because if they do not settle and any party goes to court, the attorneys are contractually barred from representing the parties in the ensuing litigation. Family business disputes are emotional, and more than other sort of business dispute, saving the relationship is a common goal. Additionally, in a family business, no party truly wants to harm the other party (at least financially) because financial stability is crucial to the business’s success. Collaborative law lends itself to resolving family business disputes in several ways. Collaborative law focuses on maintaining relationships, which is often important for people’s professional and personal lives. Also, the use of shared experts helps to ensure that the business remains successful. Finally, collaborative law can save businesses time and money as the parties create a sustainable solution, hopefully without the need for further mediation or litigation. As collaborative law grows into areas outside of the divorce law realm, the legal community and collaborative law organizations should adapt to extend collaborative law to different kinds of legal disputes.

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