Mediation, a Great Way to Save Your Business from a Lawsuit

Click here to get this post in PDF

The fact that you run a small business and not a major corporation doesn’t mean that you won’t run into conflict with your business partners, neighboring businesses, vendors, employees, or customers. But, unlike big corporations, coming up with the expertise, money, and time to cope even with minor disputes through legal means can be overwhelming for a small business. The reason is simple – they often lack legal departments, human resources, and public relations to assist them. Disputes can be pretty messy without effective and efficient navigation. And they leave deep traces of hostility between the parties – bumping up against an unfriendly party on a daily basis can be quite unpleasant.

Dealing with disputes inside the courtroom through litigation has been an only solution in the past, but today there are alternative dispute resolutions among which the mediation has emerged as the most efficient method. So let’s take a look at how this method can save your business from a lawsuit. (Image Source).

Coming to an Understanding

Resolving conflict through online mediation is a process where you and the other party are able to come to a genuine understanding which leads to a resolution that will satisfy both of your interests and needs. This happens because the concept of the whole process demands the parties to work together, lead by the neutral third person – the mediator. The reached agreement is likely to be kept precisely because the parties make it together. The best thing about it is that the experience could be used for future problems, which can hardly be said about overly complicated and somewhat mysterious courtroom ways.

Keeping The Bank Intact

Even if you win in a lawsuit, there is a great chance it will leave you completely dry. The fact that business disputes are a common thing makes a lawyer with business expertise a highly profitable profession. It’s hard to find a lawyer that really cares and Stevensen Business Lawyers have earned their reputation precisely because of their first step, which is a careful assessment of whether the client should sue or mediate. This is extremely important since mediation is usually a low-cost service. The private mediator also charges by the hour, but here you share the cost with the other party instead of each having your own lawyer. Besides, mediation is a much quicker process – without a long argument between lawyers the dispute can last only a few hours. And in the legal world, the saying ‛time is money’ becomes an understatement.

Keeping The Focus And Low Profile

At the initial meeting of the parties and the mediator, the focus of all minds is on the settlement. The first step is to go through the potential cost of the trial or litigation in case the mediation is unsuccessful, which only strengthens the will to negotiate. But a lawsuit is not only very costly with its disbursements and legal fees – it also takes a focus away from the business, eating up a significant amount of management time. In the case of mediation, the parties make the key decisions of who the mediator is and where the process will take place, enabling them to retain their business focus in the first place. Maybe an even more important thing is that your business won’t be sucked in the dispute that will leave traces on your reputation – everything discussed remains confidential. That way you can be sure there won’t be any leak of potentially sensitive commercial information. On the other side, there is a good reason why it’s said that someone is ‛dragged to the court’ – in front of public eyes.

An Open Ending

For all the reasons above, the majority of mediations end up in a settlement. The process results in a signed agreement or a signed memorandum of the agreement between the parties. If you fear that the other party won’t live up to the agreement you have a choice of making it enforceable in the court. The fact that this process demands from parties to agree on how a certain matter is resolved turns a solution into a win-win situation. If you’re caught in a lawsuit the outcome will be imposed on the parties, which means there will be a winner and a loser. This is precisely why not reaching a resolution in mediation is not a loss. You can still decide to take legal action, but you have probably learned to view the problem from the perspective of the other party, and vice versa. Even if you do find yourselves in court, your dialogue during the mediation will definitely make things go much smoother.

Basically, it is all about a non-conflict environment where you can truly think and listen. With the focus in the right place and without the fear of information leaking, you’ll probably realize that the matter can be resolved quickly and efficiently without spending the fortune and experiencing a nervous breakdown.

You may also like: Can and Should the UK Keep EU Business Laws?

About the Author

Daniel Brown is a law graduate and a passionate blogger from Sydney.

His areas of interest are alternative dispute resolution and its applicability in different fields of law, IP law, and resolution of disputes arising from intellectual property infringement and commerce law.