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Business Dispute- Mediation. Don’t litigate, Mediate!

Despite the best intentions of the parties business relationships sometimes sour. Both sides may view their respective position as reasonable and their business practices as ethical. However, it is well known within the law that reasonable minds can differ. When positions grow roots and refuse to bend business disputes can and do occur.

Depending on what is at stake the business people involved in the dispute may think about filing a lawsuit especially when informal efforts to resolve the dispute fail. To be sure, courts of law are places to resolve disputes. But they are not particularly efficient or cost effective at least not from the perspective of the person trying to run a business.

A chief disadvantage to using the court system is the parties lose all control in the outcome. Basically a judge or jury is asked to make the decision. The nature of the courthouse is it makes a “winner” and a “loser”. The fact of the matter is every “loser” loses and many “winners” likewise lose because of expense, time and attention away from the business.

Further, a party may be so entrenched in their position that they give no thought to the possibility of losing when lo an behold they are unpleasantly surprised. The fact of the matter is the outcome of a lawsuit is unpredictable. No one can really call it. In fact, that’s why many lawsuits are settled: risk.

Additionally, the litigation process is very galvanizing. Once the process has begun it is highly unlikely that parties reconcile their differences and continue to do business together. This fact may have an additional detrimental economic impact on one or both parties.

We have not even touched on what legal fees can be to litigate a case. As I am sure is no surprise, they can be quite high. Don’t get me wrong; I don’t begrudge attorneys their fees. Before I was lawyer I too would complain about the cost of legal services. However, as a former litigator I know the effort, work and stress involved in zealously representing clients in a lawsuit. Be that as it may, the fact that attorneys are justified in their fees doesn’t make it any easier for the small businessperson to pay them.

Consequently, businesspeople involved in a dispute are faced with a conundrum: How to economically and efficiently resolve the conflict. Fortunately, there is a cost effective, time efficient alternative to litigation. It’s called mediation and it can be done anytime with or without hiring lawyers.

Mediation is an informal process where the parties to the dispute come together with a third party neutral person to air their differences. Not to the mediator, to each other. Typically this takes place in a conference room where the mediator sets out the ground rules. Both parties are given uninterrupted time to have their say. The mediator then will usually separate the parties in different rooms in what is known as the “caucus”. After learning the positions of the parties, with their respective strengths and weaknesses, the mediator will communicate with the parties separately in an effort to try and hammer out a resolution to the conflict. And here’s the good news: mediations are successful at resolving business disputes up to 90% of the time.

It should be understood that mediators don’t independently make the decision as to how the conflict should be resolved. Rather the mediator facilitates communication between the parties and gives them the tools to craft there own agreements. Another key advantage is mediation is relatively speaking much less expensive than litigation. Although mediation fees vary, a typical full day mediation can run between $750 to $1250 per party.

If you are a faced with a business dispute that you just can’t seem to resolve by yourself, talk to your attorney and consider mediating the conflict before pulling the trigger on a lawsuit.

About the Author

Daniel Hall, is an attorney and mediator. His mediation practice is based on the South Side of Corpus Christi,Texas and he enjoys helping businesspeople resolve their conflicts through the mediation process. Learn more at