You May Want to Mediate Your Dispute: Why Businesses Like Mediation

by Carol Kingsley on

By Carol M. Kingsley, Esq.

Disputes are an inevitable part of doing business and most are resolved by the parties without any outside help. But there are those conflicts that reach a point and are of sufficient significance where one or more of the parties turn to the legal system for help. Litigation has long been the recourse for parties with difficult disputes. However, mediation is an increasingly popular alternative to deal with business disputes, especially attractive in the current challenging economy. Businesses are trying to control costs more than ever, and litigation is very expensive. Mediation offers disputing parties a way to resolve conflict at only a fraction of the cost of money and time typical of litigation.

Why Do Businesses Like Mediation? Here are a few reasons:

· Mediation Saves You Money. Mediation costs a fraction of what it takes to litigate a matter. When a lawsuit is filed, usually the parties can expect to be dealing with the case for months or even years, incurring substantial expenses in lawyers’ fees and related costs including among things court fees, expert fees, and the costs of discovering the facts. In contrast, the mediation process allows the parties to resolve their conflict in a matter of hours or days.

· Mediation Saves You Time. Time spent dealing with conflict means lost time conducting business. So business owners know that it is a mistake to let conflict fester and prefer to address the conflict as efficiently as possible. Mediation can be scheduled quickly at the convenience of the parties, and parties can reach resolution in a short period of time (over a matter of days or even hours) compared to lawyers working a case up to be heard by a judge, jury or arbitrator.

· You Control the Resolution of the Dispute. You, not the mediator or another third party like a judge or arbitrator, control the outcome of the dispute using the mediation process. The mediator works with the disputing parties to help them communicate effectively and work towards settling their dispute. The risk of a negative decision by a judge, arbitrator or other third party that is present when a case is heard in court or arbitration is not present in mediation.

· Mediation is Private and Confidential. Unlike cases filed in court, which become part of the public record, mediation is private and confidential. Parties in mediation and the mediator agree contractually and are required by law to keep the mediation proceedings confidential. This confidentiality allows the parties to feel comfortable to openly and freely talk to try to reach resolution without the fear that what is said is going to be used against them if the conflict does not settle and goes to court. What is said only within mediation cannot be used to later to show fault or liability.

· You Have More Flexibility in Mediation. Mediation allows more creativity than the courts. The parties can explore options and work out a settlement that can include a resolution that would not be available if the dispute were decided by a judge, jury or arbitrator, who are restricted by parameters set by law. The flexibility of mediation allows parties to form more satisfying resolutions than otherwise would have been available.

· Mediation Can Preserve the Relationships of the Parties. During mediation, each party’s point of view is heard and the final resolution is mutually agreeable to every party. By reaching a mutually satisfactory settlement, where no party has truly “lost”, ill will and bad feelings between the parties can often be avoided or at least minimized. It’s not uncommon for parties who resolve their conflict in mediation to resume their relationship with each other but with new understanding and respect.

The vast majority of cases that are filed in court settle and never go to trial. Settlement often happens “on the courthouse steps” on the eve of trial. These last minute settlements offer the parties great relief and savings on the expenses of going through the trial. Yet, at this point, the parties usually have already spent substantial hours and dollars and in many cases may also have endured significant stress and experienced health and other personal repercussions from the conflict. More often than not at this point, the relationship between the parties has suffered irreparable harm. So while mediation done late in the history of the conflict is better than not at all, the benefits of early mediation are significantly better.