Legal actions involving businesses are all-too-common. By their nature, businesses can be vulnerable to disputes related to contract disagreements, IRS or State tax issues, lawsuits initiated by current or former employees, shareholder complaints, and the list goes on.
Litigation can take years to make it into a courtroom, and be marked by significant stress, frustration and expense. Once an action finally makes it to trial, things can get even more nerve-wracking. It’s no wonder, then, that many businesses opt for Alternative Dispute Resolution (ADR), a choice of procedures that can work to avoid the long, arduous and often very expensive road to a trial. ADR forms include:
Facilitation – The least formal of the ADR measures, facilitation is appropriate when the dispute is relatively minor and both parties are eager to resolve it. Facilitation typically involves no face-to-face interactions, as the parties work to reach an agreement via phone, email and mail correspondence.
Arbitration – Arbitration is the most formal ADR option, and leaves the final decision up to an arbitrator. The arbitrator listens to the arguments and evidence from both parties at a formal hearing and then renders a decision. Arbitration can be binding, meaning the arbitrator’s decision is final, or non-binding, meaning the parties can request a trial if one or both don’t agree with the result. While non-binding arbitration might sound like a fairly foolproof option since you can choose to go to court if you don’t like the arbitrator’s decision, rejecting the result can come with substantial court costs and hefty fines, so it is seldom used by most businesses.
Mediation: The Solid Middle Ground
More formal than Facilitation and less rigid than binding Arbitration, Mediation is a more comfortable and productive approach that allows for interaction – whether direct or indirect – between both parties and greater control over the outcome. Certified Circuit Civil Mediator Phillip S. Smith has many years of experience helping businesses involved in legal disputes settle their cases out of court, saving significant time, stress and expense. “By having an impartial professional mediate the dispute, the involved parties are far more likely to discover a point of compromise that is acceptable to both,” says Mr. Smith. “Mediation takes the temperature and volume down so that people can find a line in the sand that finalizes the action and avoids the time, cost and tension of a trial.”
Mr. Smith customizes the mediation process to each dispute and its parties. Some disputes can be mediated with the parties gathered in the same room with break out rooms so the parties can communicate directly when necessary. When scheduling is particularly complicated or there are other concerns such as COVID -19 constraints, mediation can be performed via zoom with Mr. Smith acting as mediator and zoom coordinator. If the parties can’t reach a compromise during mediation, they maintain the option to go to trial.
What Disputes Qualify for Mediation?
Businesses, partnerships, organizations of all sizes, public and private, as well as individuals can benefit from mediation to address legal actions they initiate or are subject to. Mediation can be used by the business as a whole, as well as its partners, officers, directors, shareholders, and management to settle non-criminal matters.
Mediation it is especially valuable to any business that values its reputation. Unlike a formal court filing and ruling, most mediation cases allow the evidence and outcome to remain confidential, which can protect the standing of the business as well as the involved parties.
Mediation is also right in circumstances where the parties may continue to have a relationship after the dispute is settled. For example, you may have an ongoing relationship with a business partner, a shareholder, a business you will continue to work with, a service provider, even a tax authority, that you don’t want to sever, and mediation can help preserve good will while and after a resolution is reached.
“Oftentimes, emotions can get in the way of people seeing a viable solution,” says Mr. Smith. “By acting as someone who understands the legal options and is able to present a reasonable middle ground, matters can be resolved much more quickly – and affordably – than going to court.”
Even when parties decide to take their dispute to trial, courts in most jurisdictions will require mediation before a trial will be scheduled by the court. Mediation becomes the last opportunity for the parties to be in charge before the court or the jury decides the outcome.
“Mediation also tends to result in better compliance than a hotly contested lawsuit,” says Mr. Smith. “Because mediation involves agreement from both parties on the final terms, there is less chance of someone later rejecting the outcome.”
If your business seeks to initiate or defend against a legal action, contact Phillip S. Smith for trusted, experienced mediation services that can resolve your issue without the time, cost, stress and contentiousness of a trial.