Small Business Mediation Saves Money
This entry is the next in my series about business mediation from the perspective of you, the client. As a lawyer who has represented parties in small business matters and a mediator who has helped resolve legal disputes for small businesses, I can recommend mediation as an excellent alternative to pursue before going to court. In this series, we are reviewing what to expect from mediation and how to be prepared for mediation. Our firm offers in-person and video mediations to small businesses in Virginia, West Virginia, and the District of Columbia. If you have more questions about mediation and want to speak with a mediating attorney, you can always sign up for a free 15-minute video or telephone meeting and I will personally answer your questions.
Today, I’ll answer questions that may help a small business decide if mediation is appropriate to resolve conflicts and potential legal actions involving their business.
What is mediation?
Mediation is an informal process used when the parties agree to work with a neutral third party to explore and locate common grounds in a dispute, often leading to a resolution of the conflict or civil case. Parties often volunteer to mediate. In most jurisdictions, courts require mediation to occur before the trial. In personal injury cases, the plaintiff's lawyer and the defense lawyer will usually select a mediator by agreement. The parties should participate in that decision. When a party is not represented or is pro se, they may participate in mediation without counsel. The parties and their lawyers decide whether the mediation will be in person, by video, and where it will occur.
What kind of mediation do small businesses need? Small businesses often run into legal problems and conflicts in a variety of contexts:
conflict with neighboring businesses,
employees,
customers,
vendors,
landlord or tenants,
business partners.
Each of these legal conflicts presents unique challenges that we can address during mediation.
Why would my small business engage in mediation rather than just going to court?
One of the reasons many small businesses I work with select mediation is that they want to save money. Even lower cost courts such as those incurred in General District Court and Magistrate Court can be costly. Small businesses also cannot afford to lose time going to court. Business mediation can often be accomplished much faster and more directly than through litigation.
Even more significant, small business mediation, mainly if undertaken early in a conflict, may preserve relationships and provide for a way to maintain clients, employees, or suppliers. Conflict resolution mediation often involves much less stress overall and a favorable outcome for all parties.
What happens before the mediation?
Once one of the parties understands that the conflict has escalated to a point where the action is necessary, one may contact our office to determine whether mediation would be suitable. That party or our office can reach out to the other party or parties to determine whether they are interested in mediation. Often, they may sign up for one of our free informational webinars or a free consultation. Once both parties decide that they are interested, the mediation is scheduled. At that point, our office will work with both parties to be sure they have the information that I'll need when I mediate their conflict. We usually obtain all of the documents related to the dispute and often elicit summaries from the parties.
We usually ask all parties to sign a confidentiality statement or an agreement to mediate before the mediation begins.
What will we discuss at mediation? Where will it occur? Who will be involved?
In small business mediation, I sometimes conduct the mediation at my office or the worksite. I also conduct many mediations entirely online.
We involve anyone in the conflict, such as partners to the business, the business and the vendor, or the business and client. Often attorneys are involved and may attend some sessions.
During the mediation, both parties have the opportunity to discuss the conflict. We often meet in caucus during the mediation, which involves a private meeting.
How can you tell if you are successful?
There are many different ways that mediators work. Some are facilitative and try to work with parties to help them reach an agreement. Others are transformative and may work with the parties to improve the relationship between the parties. Many lawyer/mediators will use an evaluative approach. An evaluative mediator assesses both sides of the situation and then work with the parties to reach an agreement consistent with that evaluation. Usually, the evaluative mediator will carry offers back and forth to each side.
How do we know if the mediator is doing a good job?
Your mediator is good if he or she listens to you when you speak and indicates that they understand what you are saying. Your mediator should provide you with the information that you need to make a decision. The mediator may help evaluate the risks of going to trial. Most mediators remind the parties about risky a trial can be. They will tell everyone that you don't know who will be on your jury. Mediators will remind you that you have far more control of the outcome during mediation than when putting your case in the hands of six random jurors. Similarly, they will be sure that the defendants know that they provide their insured a benefit by not risking getting a verdict higher than policy limits. They may also discuss the high costs of taking a case to a jury trial.
What training should a mediator have? Lawyers who are also mediators are often best if your case involves legal issues that both parties will need to understand and consider. While they cannot give legal advice, legal information can be helpful. However, legal training is not enough. Some mediators have no more than a one or two day course in mediation, and some do not even have those qualifications. Advanced degrees and apprenticeships often provide an excellent broad base for skilled mediators.
What happens at the end of the mediation?
Once a settlement is reached, the mediator usually summarizes the agreement and signs it, and everyone signs it. Additionally, paperwork will be necessary, such as a formal release and dismissal documents if the case is in court. Once the paperwork is completed, the case will resolve the same way as any settlement. When the mediator cannot help the parties reach an agreement, they may postpone the negotiations until the case is closer to trial. The mediator also may declare an impasse and conclude mediation. (Of course, that doesn't mean that it won't settle. Remember, most cases settle. I address the post-mediation period at length in a former blog post.)
Are there any tips on how I should act during mediation?
Listen carefully and try not to interrupt the other party or the mediator. They will be conveying information that will help you and your lawyer make decisions during mediation. I always advise my clients to listen, pay attention, and bear in mind how personal injury mediation works. If the other lawyer makes comments that are not true or makes you feel angry, you will usually avoid reacting. It often makes a much better impression on the lawyer for you to seem calm and pulled together. Once you meet privately with your lawyer, you can freely discuss how angry or wrong the other attorney statements are. However, appearing calm will be advantageous to you.
Will mediation work?
Remember, most cases are resolved before trial. Of those, many will be resolved the day of mediation, or after the mediation. So, most likely, it will help you get to the place where you can resolve or settle your case.
Even if an agreement is not reached, mediation is still beneficial. You may set the stage for a later settlement. You'll learn about the defendant's ideas on how they approach your case. You get a chance to show off your case. I rarely give up an opportunity to mediate since there are many potential gains spent sitting with the other side and talking about our views of the case.
What can you do to help me?
If you are looking to schedule mediation for your small business dispute, we provide business mediation in D.C., Virginia, and West Virginia. Schedule your free 15-minute video or telephone meeting with Brenda today to discuss your options.