When to Pursue Mediation to Resolve Business Disputes

1. When to Pursue Mediation to Resolve Business Disputes

2. Table of contents  When to Pursue Mediation to Resolve Business Disputes  How Does Business Mediation Work?  When to Consider Business Mediation

3. When to Pursue Mediation to Resolve Business Disputes Legal disputes are often costly, time-consuming, and not good for business. Even if it is mild and seems easy to work through, it can still drag down a lot of processes and ultimately impact your business bottom line. If severe, a legal dispute can cause a lot of damages to your business. Unfortunately, legal disputes are part of doing business. And that’s why every business owner needs to know how to effectively manage any dispute that arises.

4. Mediation is a potent process that is often used by many business owners to break down an impasse and move business disputes to resolution. But like any other strategy, there are right and wrong times to use it. So, when does business mediation makes more sense? We’ll find out shortly but before then, let’s learn a few basics…

5. How Does Business Mediation Work? In a mediation process, a third party is appointed by both parties to facilitate an agreement on how the case can be resolved. The decisions are left for the parties in dispute with the assistance of a mediator, so the control of the terms of engagement or agreement is fully left to both parties. The mediator doesn’t make the final decision nor gives any legal advice. This is different from litigation processes where the judge makes the final decision that is binding to the parties regardless of whether one party is unhappy with the outcome.

6. When to Consider Business Mediation 1. When you are looking for quick and inexpensive dispute resolution Litigating any business dispute is extremely expensive. The pleadings, discovery, motion practice, and billing rates of the counsel all translate to a lot of costs for the parties in dispute. On the other hand, mediation offers a faster and less resolution to a dispute.

7. When both parties agree to resolve a dispute through mediation, a mediator can be chosen fast—in a matter of days or weeks. And the only requirement for the process may be the preparation and exchange of pre-mediation briefs, especially if the case is complex. For starters, pre-mediation documents set out the facts and other important information about the dispute.

8. Sometimes, a pre-mediation brief may set out each party’s legal positions. While some mediators may have other requirements beyond the exchange of pre-mediation documents, the process is usually done quickly and inexpensively.

9. 2. When the litigation cost is higher than the monetary value of the dispute Some disputes are related to issues or processes that are important to both parties but don’t carry great monetary value. If it is critical for the parties in dispute to resolve such cases, the only resolution method that makes more economic sense is mediation. Besides, mediation can also allow both parties to determine the best outcome that fully addresses their concerns.

10. 3. The need to preserve a beneficial business relationship When you have a strong business relationship with your client and you want to continue the relationship, mediation may make more practical than litigation in resolving a dispute and resolving your business relationship going forward.

11. 4. When the liability is clear but the disputing parties cannot agree on damages This is another perfect situation for business mediation. A good mediator can work with the parties in dispute to come up with an acceptable resolution that is favorable to both parties—faster and less expensive than litigation.

12. 5. When publicizing the dispute may have detrimental effects on the business Even when the impact of a dispute is bearable, the precedential effects of any decision that becomes a public matter can be far- reaching. In the age of electronic court filings, for instance, litigations may:

13.  Cause significant reputational damage and attract public scrutiny.  Drive your customers and other business partners to your competitors and ultimately impact your future revenue, market share, and other business opportunities.  Encourage more regulatory scrutiny.

14.  Make it more expensive to get your business processes done because your customers and business partners may be more careful and thorough when reviewing your contracts. Some partners may even hire lawyers to help them analyze the potential consequences of doing business with you.

15. The Bottom line As you can see, there are many instances when business mediation makes more sense than litigation. However, like any other dispute resolution process, mediation has a few shortcomings and not every dispute can be resolved through mediation. In fact, if you are forced to mediate in business disputes that are not mediation-friendly, you may end up wasting a lot of your precious time, money, and even give up valuable leverage.

16. Nonetheless, if you decide to go the mediation route, remember to consult with a good business mediation lawyer to help you analyze your situation and establish whether it is right for your case and to what extent the mandatory mediation clauses may suit your business.

17. Contact details Lowe Yeager & Brown PLLC Address: 900 S Gay Street 2102 Riverview Tower Knoxville, TN 37902 Address: 1629 K Street NW Suite 300 Washington, DC 20006 Phone: (865) 521-6527 Phone: (202) 204-2214 Website: https://www.lyblaw.net/