From the very first moment the local business owner stormed into my law office, I could tell he was livid. One of his long-time customers had quit paying months ago and was refusing to return his calls and letters.
Given the history of the parties, the owner took this silence as a personal affront. The instructions were clear: “I want to sue the jerk!” (although a more colorful term than “jerk” may well have been involved).
Such disputes are obviously not uncommon in the business world. No matter whether the sides are arguing over a few hundred dollars or few million, immediately filing a lawsuit may not always be the best solution. Attempting to mediate the matter first is often a more effective alternative.
Mediation is a voluntary procedure where the parties to any legal dispute willingly agree to meet with a neutral third party (the mediator) in a respectful and stress-free environment.
At mediation, both participants have the full opportunity to share their side of the story in an effort to help the other party understand their point of view. The mediator does not issue a ruling like a judge or jury but simply listens and then uses his or her training to help the parties reach middle ground and fashion their own mutually-beneficial resolution.
While mediation may not be appropriate in cases where a great deal of information is missing and needs to be subpoenaed through formal court procedures, such cases are relatively rare. Most disputes can be handled quickly and easily through mediation.
Some of the advantages of mediation versus litigation include:
Speed and Cost.
Most mediations last no more than a few hours to a few days (in complex cases) compared with months or years in court. As a result, the cost of mediation is typically a fraction of litigation.
Confidentiality.
Court cases and transcripts are public record, whereas mediation is a confidential process. Nothing discussed may be repeated outside the mediation, and all of the mediator’s notes are destroyed following the session.
Flexibility and control.
In court few remedies are available other than monetary damages. Mediation, on the other hand, gives the parties complete control over the settlement process, opening the door to creative solutions that are not available in court.
Parties are able to structure agreements that address their specific needs rather than having a verdict imposed upon them by a judge or jury.
Informality.
Unlike the formal rules and procedures that apply in court, mediation consists of the parties simply gathering around a table and talking. While the focus is primarily on the attorneys in court, a mediator can focus his or her attention directly on the parties to better understand and address their needs and goals.
Voluntary participation.
Mediation is a voluntary procedure. Both sides have the ability to walk away at any time. This keeps either side from being able to coerce or manipulate the other.
Compliance.
Because both parties had a part in structuring a mutually-satisfactory agreement, studies have shown that compliance with mediated agreements is much higher than court verdicts.
Preservation of relationships.
Business and personal relationships are often severely damaged or destroyed after months or years of litigation. Since mediation is a collaborative process rather than adversarial, relationships often can be salvaged.
Luckily, the angry business owner took my advice and was willing to mediate his dispute. We reached out to the customer, who agreed to try mediation prior to going to court.
It turned out one of the customer’s employees had recently embezzled a large sum of money, resulting in a serious financial strain. The customer was embarrassed but felt comfortable sharing the information thanks to the confidential nature of mediation.
As a result, the business owner gained a better understanding of the facts. The mediator assisted in the structuring of a creative repayment plan over time that not only kept the parties out of court, but also repaired their business relationship (which continues to this day).
In court, there is always a winner and a loser. Mediation, on the other hand, allows both sides to feel victorious. No matter the case, consulting a qualified mediator may save you and your company a great deal of time, money and distress.
Charles Bowen is a business attorney who focuses on commercial, banking and manufacturing law and offers mediation services. He may be contacted at 912-544-2050 or cbowen@thebowenlawgroup.com.