The Pros of Business Mediation

by Austen Koberstein

Published on this site: January 12th, 2007 - See more articles from this month

Business mediation is becoming a very popular approach used to settle disputes in the business community. These disagreements may come between business partners or even between two different businesses (this is referred to as B2B). No matter what the business relationship is, mediation has several advantages over a public legal battle.

Anyone who operates his or her own business knows that time is money. Business mediation can save the business both. It can save time if both parties are genuinely sincere in trying to work out their differences. Sometimes only one mediation session is needed to help resolve the conflict. This is surely a timesaving option as compared to spending months in an attorney's office and/or in court.

Also, meeting only once or twice is absolutely cheaper than paying attorney fees, court costs, and deposition fees. With mediation, the client only pays for the actual time spent in the mediation sessions, even if the meeting was scheduled for a longer period of time.

Confidentiality can be very important in the business world. A company's reputation can mean the difference between success and failure. When a business is having internal problems, the last thing they need is for the battle to become common knowledge. Information such as this could scare away potential clients, or even be used by a competitor to take away current business associates. In a legal dispute, court documents are public domain and can be accessed by anyone who wants to view them.

Mediation is a much better option for businesses. In this forum, the dispute is handled privately, behind closed doors. A disinterested third-party will hear the issues in question from each side's perspective. He will then work with both groups to find possible solutions and/or compromises. A skilled, creative mediator will often help his clients find a middle ground that hadn't been thought of before. Once an agreement is reached between the parties, hands are shaken and business resumes, without the further complication of public scrutiny.

In a court case, there is usually one winner and one loser. Both sides present their cases to the judge and he alone decides the outcome. The business partners have no control in the decision making process. Someone goes away from the proceedings happy and the other person leaves feeling frustrated and angry. The case is decided but the business relationship is ruined.

The goal of mediation is to create a win-win situation. Since both parties come to the meeting willing to give and take a little, this is very often the outcome. Even though each side may have had to give in on one point or another, the fact remains they were able to work together to find a solution. This type of communication is essential in a successful business partnership. With mediation, an agreement is reached while preserving the business relationship. This is perhaps the most important outcome of the mediation process.

Some may wonder if the mediation agreement is binding? The answer is, yes, it is. Once both parties agree, a contract can be drawn up, signed, and will be legally binding. A contract such as this can even be used to address possible future problems before they even happen.

So, what happens if an agreement is not reached? Can information used in the mediation be brought up in a court case? For this question, the answer is a resounding no! All parties involved in the mediation process are required to sign a confidentiality agreement. This means that nothing that is said or discovered during the mediation process can be used as evidence in a court case.

Therefore, the only question left to answer is, what is there to lose by choosing mediation over a legal battle? Obviously the answer is, nothing! Business mediation is a fast, inexpensive, confidential process that most often results in a win-win situation for everyone involved. Business reputations are not at risk and relationships remain in tact. If a resolution is not reached, at least the effort has been made, and there will be no negative repercussions as a result.

Interestingly, even Bill Gates looked to mediation during Microsoft's very publicized legal battle with the Justice Department and 19 of the United States. Unfortunately, in this case, mediation was not very effective. Of course, there was very little incentive for Gates to try to appease his accusers. So in the end, unless you are a monopoly-holding millionaire with nothing to lose, a quick, private compromise is probably more preferable to a public three-ring circus.

Austen Koberstein - The Law offices of Joseph J. Nardulli serve business and corporate clients in Orange County and Southern California. They specialize in
http://www.josephnardulli.com/mediationarbitration.html mediation, arbitration, http://www.josephnardulli.com/employmentlitigation.html
and employment litigation. You can learn more about litigation, mediation and arbitration at: http://www.JosephNardulli.com