Case 2: An excessive bill

In the present case Lars Browski was confronted with an evil letter from his most important cooperation partner. In the letter the cooperation partner demanded 12.000,- € for the provision of services. Lars Browski was sure that the invoice was unjustified. He is a manager of a company that provides cleaning services throughout Hamburg. A year ago, in response to the rising demand, Lars and the KI GmbH decided to cooperate. The KI GmbH is a company that provides window-cleaning services. The signed contract enabled the KI GmbH to add risk surcharges. During one year Lars received a bill each month and always paid the full amount, risk surcharges were never included. At the end of the first year of cooperating, the KI GmbH made an extra charge for risk surcharges for the last 12 month. It was a bill over 12.000,- €.

What happened?

Even though Lars was always satisfied with their work and did not want to terminate the business relationship, he could not accept the invoice. The KI GmbH on the other hand insisted on the payment.

How to initiate a Mediation process?

Lars Browski wanted to avoid excessive fees and court. He also wanted to avoid a lawyer, so he called the responsible Chamber of Commerce and asked for alternative settlement resolutions. As Lars wanted to continue to do business with the KI GmbH, the Chamber recommended him to try and solve his dispute through mediation. He learned that the Chamber provides a list of registered mediators and even helps to find the right mediator for the job and provides information about the Mediation process.

Lars contacted Tom Finke, the owner of the other company, and suggested Mediation to him. He gave him the link to the Chambers website, so he could have a look himself. After two days Tom agreed to solve the dispute through mediation. In order to find a mediator Tom contacted the Chamber of Commerce. The Chamber contacted the parties with Mr. Berg, a highly qualified and experienced mediator.

After Tom and Lars agreed to split the costs, the parties and mediator signed an agreement to mediate. Then the mediator arranged a confidential meeting in a neutral environment.

First Session

The Mediation itself began with an open session where the mediator explained the process and answered all questions that the parties had. Each participant then had time to tell their side of the story and explain their point of view. The mediator asked further questions to clarify the issue.

During the first session Lars explained that he did not expect to receive another bill and that he felt deceived by the company. Lars continued telling that a trustful company should have told him right at the beginning that risk surcharges would be invoiced afterwards. When he was asked if he had ever been dissatisfied with the work performance delivered by Tom’s company, he answered that, besides the last bill, he could not be happier.

Tom explained that his company tries to avoid extra charges such as risk surcharges, but that his company is facing financial difficulties. Because of the increase in cost of labor his company entered a state of financial crises. Tom emphasized that Lars is the most important client for his company, but he needs to ensure that the income covers all present and future items of expenditure. Tom kept explaining that he had hoped to deepen the business relationship by offering a price below average, but, by drawing up his annual balance sheet, he had to admit to himself that he made a mistake.

The first session allowed Lars and Tom to understand each other's perspective. Lars understood Tom’s motives and Tom found out, that Lars still wants to do business with him.

Second Session

During the second session the mediator told Lars and Tom that it was time to explore possible solutions. Before he started the brainstorming session, the mediator encouraged Lars and Tom to suggest as many ideas as possible. Furthermore he explained that the more options were considered, the greater the chance of success in reaching an agreement would be. But the mediator requested not to assess or critique anything that was suggested.

By using the information gathered during the previous session, Lars and Tom found a large number of possible solutions. Of course not every suggested solution would work for both parties, so, in a second step, they evaluated the ideas. After a short discussion they reached a final agreement that was satisfactory for both parties. The mediator did not evaluate the rights and wrongs of the case or directed the parties to a particular settlement, but rather facilitated the conversation and guided Lars and Tom towards an outcome of their own.

The Resolution

Lars paid 5.000,- € for the risk surcharges and gave Tom’s company an interest-free loan of 15.000,- €.

Lars was satisfied because he knew that Tom did not mean to deceive him and they deepened their relationship. For Tom it was a relief to get 20.000,- €. With this amount he would be able to solve his financial problems. And he appreciated the fact that the mediation process was confidential meaning that nothing that happened in the Mediation sessions would ever become public.

Please note that the identities of the disputing individuals were altered, due to the confidentiality element Mediation carries.