How Business Mediation Helps to Avoid Costly Legal Disputes

Disputes are commonplace in the commercial world. Whenever you bring two or more human beings together, you are bound to have disagreements over something, and sometimes they can escalate into conflicts that threaten to disrupt the entire operation or end the business relationship. Eventually, every business conflict is resolved; but the question is, how does it get resolved and at what cost?

In some cases, the final resolution to a dispute is that those who are involved part ways. Like a marriage that ends in divorce, they may decide that there are “irreconcilable differences”, and they will no longer be in business together or do business together. In other cases, one party “wins” over the other party, but only after a long and costly legal battle. But this could end up being a “Pyrrhic victory” in which the business relationship is damaged beyond repair.

The ideal way for a business dispute to be resolved is by coming up with a peaceable and workable arrangement that is acceptable for all parties. Everyone should feel like their needs and concerns are being addressed at least to some degree, and the parties should come out feeling like they had a say in the process.

An arrangement like this can be accomplished through effective negotiation; but negotiating successfully can be a major challenge for those who are too close to a situation. Emotions can run high, and this can cloud someone’s judgment and prevent them from seeing the bigger picture. To help parties come to an acceptable agreement, a growing number of individuals and organizations are turning to business mediation.

Business mediation can assist in resolving all types of commercial disputes, including but not limited to:

  • Partnership Disputes
  • Contract Disputes and Breach of Contract
  • Shareholder Disputes
  • Violations of Fiduciary Duty or Breach of Fiduciary Duty
  • Business to Business Disputes
  • Disputes Between Member Owners of a Limited Liability Company (LLC)
  • Disputes Between a Company and a Supplier
  • Disputes Between a Company and its Customers
  • Disputes Involving a Commercial or Business Interest

How does Business Mediation Work?

Mediation is a voluntary process that is facilitated by a neutral, third-party mediator. The mediator gets together with the parties to discuss their differences and guide the conversation toward a resolution that all parties must agree to. The mediator has no authority to impose a resolution on the parties if there is no voluntary, non-coerced agreement.

Mediation can be conducted in-person or remotely via phone, Skype, Zoom, or some other type of video chat. As you might expect, the remote option has been used more frequently during COVID-19 in order to follow proper social distancing in keep everyone safe. 

The mediation process is very flexible and customizable to the needs of the parties involved. Sometimes, the mediator meets with all parties at the same time. In other cases, the mediator can speak privately with each party and go back and forth between them, a process known as “caucusing”.

Business mediation can be completed in one session, or it might be necessary to conduct multiple sessions. This all depends on the complexity of the issues involved and how long it takes for parties to arrive at an acceptable agreement. Even if it takes multiple sessions, however, the process is still far less costly than litigation. 

The one potential drawback with business mediation is that, because the process is voluntary, there is no guarantee that the parties will reach a resolution. They have every incentive to come to an agreement, and most of the time the process is successful. However, there are times when the parties are simply too far apart to settle their differences without a resolution being imposed by an outside authority.

Business partners and associates who are involved in a legal dispute can derive several benefits from the successful use of mediation:

  • The mediation process is private and confidential, and nothing that is discussed is ever made public.
  • Business mediation is conducted in a friendly and cooperative setting, increasing the chances of the parties continuing to do business together after the dispute is resolved.
  • Mediation provides the opportunity to implement creative solutions or accommodations that would be far less likely to be introduced in a court setting.
  • Because all parties must agree to any resolution, they are far more likely to take ownership of and adhere to the agreements that are made.
  • As we have talked about earlier, mediation can be done more quickly and at far less cost than going to court.

Turn to AMS for Business Mediation Services

At Advanced Mediation Solutions (AMS), we provide all types of business and commercial mediation. Our mediator, Carmela DeNicola, has several decades of experience working in both small businesses and large organizations. Her in-depth expertise across a wide range of commercial settings allows her clients to benefit from the creative and innovative solutions that she has to offer.

To get started, call our office today at (856) 669-7172 or send us an online message. We look forward to serving you!