Using Mediation To Resolve Business Disputes

Using Mediation To Resolve Business Disputes

A business that finds itself caught up in a dispute has three options for resolution. They can turn to the courts through litigation, go to arbitration, or engage a mediator to help resolve the dispute. No doubt, many businesses have used each of these dispute resolution processes, but which one is right for you? Each process is different, and one may emerge as a better option in resolving your dispute. Let us take a better look at the possible options.

Helping Florida Clients Resolve Disputes

Mediation is a private process where a mediator, who is a neutral third-party, is formally trained to identify and understand legal issues and to facilitate and to structure negotiations between the parties. The goal is to try to resolve the parties’ dispute. While courts can mandate that certain cases go to mediation, the process remains “voluntary” in that the parties are not required to come to agreement.

Mediation Services

MediationWorks offers a wide variety of dispute resolution services including:

Litigation

Litigation is the slowest, most expensive, and most uncertain form of dispute resolution. Attorneys fees, filing fees, and costs for depositions, if needed, add up quickly. Litigation expenses can end up costing more than one hundred thousand dollars ($100,000.00), and in the end, the outcome can be uncertain.

Arbitration

While arbitration can speed up dispute resolution, arbitration is not much different from litigation and often no more productive. Arbitration can also be expensive and time-consuming. It is a formal process, like litigation, but the arbitrator has the decision-making power instead of the judge or a jury. In terms of partnership disputes, arbitration is similar to litigation in that it is an adversarial process and unlikely to allow a relationship between partners to survive even after the dispute is resolved. For this reason and others, businesses should thoroughly explore ­other dispute resolution methods before agreeing to arbitration.

Mediation

It can be argued that mediation should be employed more to settle business disputes. Why is it not?  Perhaps the answer is that mediation is the least understood. Or it may be because mediation is a far less formal process than litigation or arbitration, and the party or parties may feel it is less effective. Not so. The goal of mediation is to discuss the issue(s) giving rise to the dispute and work towards a compromised settlement. A neutral mediator oversees the mediation and tries to facilitate a settlement. If mediation fails, either party may proceed with a more traditional form of dispute resolution.

What are the steps in mediation? The mediator is chosen by both sides, typically narrowing the choice between two or three mediators skilled in the field of the dispute. Their job is to understand the position(s) of both parties. The mediator attempts to bring them together by pointing out the strengths and weaknesses of either side. The mediator’s role is to be objective and neutral. They use the positions of both sides to help resolve the conflict. Mediation, more than other forms of dispute resolution, assists the parties in finding a solution that both sides accept, possibly saving any business relationships at the same time.

Kinds of Business Disputes We Mediate

Breach of Contract

Breach of Contract is a legal term describing the violation of an agreement or contract, which occurs when one side fails to meet its promises set out in the agreement. Sometimes this may involve one party interfering with the ability of the other party to fulfill its duties. Contracts can be breached in whole or in part. A Breach of Contract is one of the most common causes of contract disputes requiring resolution.

Types of Contract Breaches

  • A “material breach” is significant enough that the injured party is excused from fulfilling their part of the contract.
  • A “partial breach” is less severe than a material breach and will not necessarily excuse the injured party from fulfilling their contractual obligations.
  • An “anticipatory breach” occurs when the plaintiff suspects the other party may breach the contract in the future by failing to fulfill an obligation, which demonstrates they do not intend to complete their duties.

Partnership Disputes

A partnership can be an excellent way to strengthen a business, but on occasion, it can result in a complicated legal dispute. Some examples of partnership disputes are a partner misusing funds, breaching a contract, or not honoring their fiduciary duties, thus jeopardizing the entire business.

Business to Business Disputes

Disputes between businesses usually occur when one party perceives the other’s actions to be unfair or deceptive. The two most common types of contract disputes are tortious interference with a business relationship and shareholder disputes. Mediation of these types of disputes avoids disruptive, prolonged, and costly litigation.

Tortious Interference with a Business Relationship

If a business unfairly interferes with another business’s professional relationship, thus causing financial damage, the “harmed business” may have a claim for tortious interference with a business relationship. In order to successfully prosecute such a claim, the affected business must show that the offending party unlawfully interfered with the affected business’s ongoing relationship with a customer with resulting financial harm.

Shareholder Disputes

Shareholder disputes arise over decisions that could significantly affect the company. They occur when the top-level stakeholders in the business clash over these problematic decisions. Shareholder disputes are more likely within small and medium-sized companies, often because key strategies and future planning goals were not agreed to in writing beforehand.

Mediation Rather Than Litigation

When done effectively, business mediation leads to prompt results and satisfaction by both parties. Litigating in court, by contrast, is a complex and slow-moving system that wastes time and money. Despite these advantages, business mediation remains the least used dispute resolution process in the US. When your company’s resources, or even future, is at stake, having the ability to make a direct impact on the outcome of a dispute is essential. Ending up before a judge or jury, who cannot know the case as intimately as you do, can be risky. Business mediators not only understand the law, but they also understand the business and what is at stake. Their goal is to achieve a fair settlement quickly, so you can go back to what you need to do to grow your company.

In the case of partnerships or other meaningful business relationships, mediation not only provides a swift resolution that is acceptable to both sides of a dispute, but it also has the unique capacity to ensure relationships are not destroyed as they can be by more adversarial approaches to dispute resolution. All MediationWorks mediators are Florida Supreme Court Certified Circuit Civil Mediators, an essential factor in choosing a mediator.

MediationWorks is a Florida-based professional association of mediators. Our mediators have over 130 years of legal experience. We have mediators that are Florida Bar Board Certified in Civil Trial Law, Business Litigation and Appellate Practice. All of our mediators are Florida Supreme Court Certified Circuit Civil Mediators. We also have a mediator who is bilingual in Spanish.

To schedule your mediation, please call our office at 561-245-2200 or email scheduling@mediationworksfl.com.