Mediation: A powerful tool for business dispute resolution

By Daniel Brown

Small businesses have everything that corporations have – business partners, vendors, customers, employees, and neighboring businesses. They have these things on a smaller scale, but the conflict they can run into with any of them isn’t necessarily smaller in proportion. It can actually produce a much larger negative impact since small businesses have much smaller legal resources, human resources, and public relations needed to deal with these potential conflicts.

Every business is full of minor disputes, but they grow into much bigger ones if resolved through legal means due to the lack of expertise, money, or time. Furthermore, the goal of every small business should be to build a strong business community, and going to court always leaves you with negative relationships, no matter the outcome. Luckily, litigation is not the only solution anymore with the evolution of alternative dispute resolution (ADR) forms, including the most powerful one – mediation.

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The problem with legal battles is that there is always the winner and the loser, and in the end, only the needs and interests of the winner are satisfied. Every business conflict comes from a lack of understanding, and the resolution should offer a solution that will again re-establish that understanding in a genuine way, with both parties satisfied. This process inside a courtroom looks a lot more like a conviction of a certain party and, while the mediator has many roles, none of them is the role of the judge. The whole concept of this alternative process requires him/her to be a neutral third person whose job is simply to lead the parties, enabling them to work together. It is not about who’s right or wrong, but about reaching an agreement that is very likely to be kept precisely because of this cooperation. In the end, the parties leave with much more than mutual satisfaction – they also leave with an experience that will help them deal easily with future disputes.

The mediator doesn’t take it all

Lawsuits are a very expensive process, meaning that even winning will cost you. It’s the so-called ‛expertise’ that costs the most, but know that truly efficient business lawyers will always make the careful assessment whether you should sue or meditate their first step. This is because the efficiency doesn’t lie in the ‛victory,’ but in the quickest and most cost-effective way to a solution.

While the mediator also charges by the hour, this cost is shared since the parties are not each required to have their own lawyer. The smaller cost of this service is additionally lowered by the fact that the very process is much quicker since it’s based on open communication rather than on the argument. Times is money, so there’s a pretty great chance that reaching a solution quicker will keep your bank intact.

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The cost of the litigation is not the only problem. What makes the courtroom disputes much worse is the irritation that appears as the consequence of the lack of focus. The focus of the parties is not shattered only by the fact that the process eats up a significant amount of management time, but also by the fact that their reputation is constantly at risk since people are usually dragged to court in front of public eyes. The process of meditation easily re-establishes this focus by allowing the parties to achieve complete control, form the choice of a mediator to the choice of where it will take place. This guarantees that all your potentially sensitive commercial information will be protected from any leaks into the hungry eyes and ears of the public. The fact that all things discussed will remain confidential allows this discussion to go much deeper, keeping the focus of both parties solely on the settlement.

It is pretty obvious that the resolution of your disputes through the process of mediation will leave your small business intact. Since the solution is not imposed but rather agreed upon, your business relationships won’t suffer and the low cost of the process will be very kind to your budget, while the hungry public won’t get even the smallest bite from your reputation. Even your further options remain intact – if the other party doesn’t live up to the achieved agreement you can make it enforceable in court, and you can still decide to take a legal action. But even if you find yourself in the courtroom after mediation your previous dialogue will help make things go much smoother. It is certainly the quickest way of dealing with legal obstacles on your road to success where you’ll retain allies, not enemies.


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.

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