By Rob Harris, ESQ
Dominating the golf legal world this week is the report that Rory McIlroy will absent himself from tournament golf for the next month in order to prepare for his upcoming court case with his former management company.
Apparently, an attempt to broker a settlement through mediation failed. Trial of the dispute is scheduled for early next year, with suggestions raised that McIlroy will be required to miss additional tournaments.
The reasons for the failed mediation have not been publicized. However, we can speculate.
With both sides presumably represented by capable attorneys and advisors, they each have the ability to make reasonable projections as to the range of likely outcomes. There’s nothing particularly complicated about interpreting a management agreement, assessing the strength of “off contract” claims and defenses, and estimating the damages that reasonably would flow from a breach. Lawyers and their clients engage in this analysis all the time, and arrive at results that provide an appropriate basis to fashion a settlement.
There are two circumstances that impede the process. Sometimes, one of the parties may be emotionally overinvested, in which case rationality takes a back seat. Nothing I’ve read about Rory McIlroy suggests that he fits this category. Similarly, it’s unlikely that a sports management company—with its dependency on professional athletes for survival—would turn a business claim into a vendetta.
In other situations, seemingly straightforward settlement logistics are overridden by an extraneous bargaining chip that one party holds. In this dispute, simply by insisting on proceeding with the litigation and the trial, the management company can deprive McIlroy of the ability to devote his attention to his professional golf livelihood. Since the trial is not scheduled to occur until early next year, it’s likely that the management company will be conducting a deposition of McIlroy within the next few weeks.
Using the legitimate threat of the ongoing litigation, the management company may believe it can “encourage” a premium on settlement. Perhaps McIlroy, rather than folding, is indicating his willingness to stand tough.
Best guess—this is high stakes posturing. The case will settle before the scheduled trial date.
Harris is the founder of the blog www.golfdisputeresolution.com, where this article first appeared.
