Small business owners and large corporations alike often wish to minimize business disputes, as they may lead to lawsuits and litigation. Disputes can also harm business relationships,which may potentially harm a company’s bottom line and future collaborations, according to Boston Business Journal.
Mediation can help mitigate a problem by allowing both sides to come to an agreement. In some cases, companies may create clauses in their contracts that require mediation before another party can file a lawsuit.
How does business mediation work?
Mediation is designed to bypass courtroom litigation by allowing both sides to negotiate the terms of an agreement. A third-party mediator is present at the meeting to answer questions and direct the negotiations process. While attorneys are not required at the meeting, company representatives can bring legal help. It is important that both parties come to the table with an interest to settle the dispute, otherwise the process will not be as effective.
What are the benefits of mediation?
Not only does mediation save money, but critical time that may be spent in other critical business processes. Depending on the specific situation, mediation may be advantageous for companies in many ways.
According to the American Bar Association, advantages of mediation include the following:
- Strengthen business relationships through collaboration and negotiations
- Schedule mediation appointments rather than wait for court-appointed dates
- Bypass lengthy courtroom battles
- Avoid courtroom costs
In some cases, mediation can help repair a dispute within one or two meetings. While a traditional courtroom litigation may cause permanent damage in a business relationship, mediation can help to settle disputes in a non-confrontational manner.