Mediation within businesses or between different businesses is a type of Alternative Dispute Resolution that can be used to avoid the nervousness, delay and expense of the court system.
Examples of business issues that could be potentially mediated include disputes over shareholder derivatives; family-owned business disputes over compensation, promotions or work responsibilities; or disputes with other vendors regarding quantity, quality, price or timeliness.
The attorneys who practice in this area of law tend to think it’s the best option. A successful mediation process is one where the parties follow the mediation rules and everyone does their part to accomplish the common goal that the parties set out to accomplish. If everyone participates, they may be able to reach an overall understanding of what they set out to accomplish and they can have their counsel write down and solidify in an agreement between the parties. Parties may not like all the terms of an agreement but it’s a win-win when finality can be brought to the issue. Why is it a win-win? Because the parties get to avoid the adversarial, expensive experience of litigation and keep control of the outcome. Most parties want to create their own agreement terms instead of having terms imposed on them via a third party, which is what happens when the court is involved. If individuals believe the process is fair and reasonable, they may be willing to accept an outcome that they initially may not have been interested in agreeing with prior to mediation.
What Are the Benefits of Mediating Business Disputes?
- Education
Mediation is an opportunity to meet face to face with the other side. You can see how the other party is talking or thinking. You can examine how prepared they are to move forward and if there are issues that they are taking a hard position on. You can also see what aspects they seem most willing to compromise on. These sessions provide valuable insight into whether litigation could be a good or bad play.
- Customized outcome
In mediation, the parties decide the terms. The mediator is there to clarify and explore alternative ideas and approaches to get the parties on a similar page. Often the parties may be seeking specific solutions that might not be possible in court but are possible in mediation.
- Speed of the process
Unlike the court system that could take up to several years to litigate an issue after the expense of pleadings, depositions and other forms of costly discovery, mediation generally takes no more than a day to a couple days.
- Cost
In litigation, the feeling is that the side with the deepest pocket generally wins. One party may wear the other party down financially until they give up. Even if parties go to court and in fact win, they are still unhappy because they had to spend so much to get their day in court. If they lose…it’s only more upsetting.
- Reputation
Mediation allows parties to stay off the court dockets and out of the news. This preserves reputations and business relationships because some companies don’t want to be in the public light during a sensitive time for their business.
Are there any downsides to mediation?
Sure. Unlike litigation or even arbitration, generally mediation is not legally binding. However, as long as the parties agree to abide by the terms they reached, then success is attainable. They did choose these terms after all.
If you are considering mediation with regard to your business or any other matter for that reason, reach out to Aces Mediation by Rick Law for a free consultation!