What comes to mind when you hear the word “mediation”? Many people think of court-ordered mediation when parties well into litigation settle near the courthouse door. Mediation is also used in divorce and in employment disputes. Mediation concepts have broad, beneficial application to businesses.
While some disputes require a court resolution, most do not. In fact, some disputes should not be litigated because a court cannot provide the best resolution. Courts are limited to legal remedies. Business people can often create better solutions with business, rather than legal, solutions.
For example, a business contract dispute can be settled through the court or through mediation. You might be seeking improved contract terms. But the court can only grant money damages. Therefore, even if you “win” at court, a negotiated settlement would have been better for you.
Mediation also helps relationships continue. It can solve disputes with the public, customers, vendors, suppliers, and partners. Litigation is by definition an adversarial process. Many disputes need a collaborative resolution to preserve a relationship.
Principles of mediation can save us time and trouble. Picture this: Executives are sitting around a conference table bemoaning a vendor dispute. Instead of focusing on how to resolve the issue, they talk about why one side is right and the other is wrong. This approach leads to posturing, animosity, and expensive litigation.
Instead, try this:
1. Be aware of the other party’s perspective. Listen.
2. Consider: What does the other party really want and why?
3. Reduce your emotions and, for now, set aside why you are “right.”
4. Consider: What do you really want and why?
5. Then brainstorm solutions that both parties can accept.
For example, in the vendor dispute, you may feel that the vendor breached the contract with your business and overcharged you. You want money back but you are too far into the project to switch vendors. Your vendor may feel that they did their best but you did not explain what you wanted. Your contract is important to the vendor’s business. Instead of expensive litigation that would almost certainly delay your project and irreparably damage your vendor relationship, you and your vendor could benefit from informal mediation to understand the needs of each party. In similar situations, parties have been able to restate the contract to better explain expectations and reach a reasonable resolution on payment owed.
As preemptive planning to limit disputes, you also may want to include in your contracts, as I do for my business clients, a dispute resolution clause. It requires parties to try to negotiate a settlement to any contract dispute. If it’s necessary, it requires mediation by a neutral third-party before resorting to litigation.
Help is available for your business all along the dispute continuum. This includes:
A. Strategic advisors to coach you through the five steps above, especially as an objective source for brainstorming ideas;
B. Attorneys to advise on legal issues early, even as you focus on business solutions;
C. Facilitators to help you meet with the other side;
D. Mediators to mediate between the two sides. These meetings are more formal than facilitated discussions. A mediator may meet with parties together and then “caucus” separately to develop mutually agreeable solutions;
E. Settlement counsel if you are already in litigation (before you spend a lot of money on litigation expenses, an attorney can represent you to try and settle the dispute with the other party);
F. Mediators for a litigation dispute in progress.
Less than two percent of cases filed in the U.S. District Court for Idaho reach trial. While some cases are decided on motions, many are settled during the litigation process. Wouldn’t you rather settle a dispute early before you spend time and money to litigate? Remember, the legal expenses you pay in litigation are only part of the cost to your business. Litigation also drains your team’s time and energy.
Britt Ide, J.D., President of Ide Law & Strategy, PLLC is formally trained in mediation at Harvard and practically trained by 20 years of finding solutions in engineering, law, business, legislatures, government, courts, nonprofits, and boards. She advises business clients on negotiation, mediation and strategy. Her expertise includes contracting, energy, sustainability, and intellectual property. She loves connecting people and ideas, and brainstorming solutions. www.idelawstrategy.com