When two businesses are involved in a dispute, it’s often more beneficial for both to resolve the disagreement through compromise rather than litigation. The business mediation process makes this possible. In a neutral setting, in the presence of an impartial mediator, the parties may be able to reach a mutually beneficial agreement, particularly with the incentive of avoiding the expense and hassle of going to court. This is why business mediation is a popular alternative to the legal process.
Mediation is always a good idea when the chances of resolving the dispute through talks are high. In many cases, the disputing parties do not want to litigate. Litigation can be costly, and the outcome is uncertain. If given the opportunity to resolve the dispute without going to court, most reasonable parties jump at the chance. Most business disputes can be resolved through mediation. In fact, many disputes involving contracts, financial matters, insurance policies, taxes, and intellectual property are resolved through mediation.
Steps in Business Mediation
The process begins with one party to the dispute reaches out to the other for a mediated resolution. Once both parties agree to mediation, an impartial mediator, who is acceptable to both parties, is found. The mediator should be an attorney by profession. The two parties then meet in a neutral setting in the mediator’s presence.
The mediator starts by explaining the rules and process. He or she then gives each party’s representative the opportunity to present his or her side. The mediator questions the representative to better understand the dispute. Then, the mediator holds a private meeting with each representative to find out what each wants from the other side and how much they are willing to give. After that, he or she helps reach a mutually beneficial solution.
Once the two parties agree to resolve the dispute, the mediator puts the agreement in writing and then reads it aloud to ensure both parties have understood it. Finally, both parties sign the agreement and proceed to fulfill the terms.
Benefits of Business Mediation vs. Litigation
Litigation can be costly and can drag on for years. It is like washing dirty laundry in public. It turns the two disputing parties into adversaries, often permanently. It can tarnish your company’s reputation. Protracted lawsuits are bad for business. Both parties can rack up expensive legal bills and one party loses the battle. Litigation is a destructive way of resolving a dispute.
On the other hand, mediation is inexpensive, takes less time, and, usually, results in a “win-win” outcome. If the disputing parties manage to reach a mutually beneficial agreement, the result may be an amicable relationship. In short, mediation is a constructive way of resolving a dispute. For this reason, mediation is usually preferable to litigation.
Although a business mediation is done without judges and juries, both parties should hire an alternate dispute resolution attorney as their representative. Dallas-based business and commercial law firm, Bennett, Weston, LaJone & Turner, P.C., has been successfully mediating business disputes for many years and can also help you in any matter relating to business law.