When to Avoid The Courtroom Through Business Mediation

When a dispute within a business or between different businesses arises, the first thought for many is to file a lawsuit and attack the problem with a “scorched earth” approach. Increasingly, however, businesses are turning to mediation as a way to resolve disputes more efficiently and amicably so that at the end of the day, business as usual can go on.

Mediation As an Alternative to Litigation

Litigation occurs when a lawsuit is filed in state or federal court and the parties proceed through the court process of filing complaints, filing various pretrial motions, taking discovery, and then heading to trial. Litigation can take years to reach a final resolution and cost hundreds of thousands of dollars in the meantime. Additionally, there is no guarantee of success when a jury is involved—juries are notoriously unpredictable.

Mediation is an informal process of dispute resolution, and can be a very desirable alternative to trial. It can be used during the litigation process to attempt to resolve a dispute before anyone has to step foot inside of a courtroom. However, it can also be used as an alternative to the litigation process entirely.

Mediation has many advantages over taking a case to trial. The trial process can last years. Active mediation involving all parties typically lasts a day or less, although mediators may continue to work on a case that does not initially resolve. Either way, it resolves extremely quickly when compared to the litigation process. Lastly, as opposed to the likely cost of trial—which can reach the hundreds of thousands—mediation costs only several thousand dollars for the mediator’s and attorneys’ time.

The Mediation Process

Mediations begin with the parties identifying the mediator who will oversee the dispute. Unless the mediation has been court ordered, the parties will generally have to work together to identify a mediator that they can agree upon. One option is to create a strike list, where several mediators are named and each party takes a turn striking names off the list, until one mediator is left.

After a mediator is identified, the parties schedule the mediation, often for several weeks or months out. Prior to the mediation, each party submits statements to the mediator explaining their position, the evidence available, the state of the law, and what they are specifically requesting through mediation. The mediator will review these statements in preparation for the day that everyone comes to the table.

At the mediation, the mediator will typically engage in what is called “shuttle diplomacy.” This means that the parties will be kept in separate rooms and the mediator will “shuttle” between the two rooms, negotiating with each party while informing them of any weaknesses or perceived issues with their case. This is done in an effort to get the two parties to meet in the middle and resolve the dispute on their own, before it becomes necessary to get a judge involved.

Is Mediation a Good Fit for You?

There are numerous benefits for businesses that choose to mediate their disputes:

  • Mediation can help parties who may have ongoing contracts to stay on good terms even after a dispute.
  • Mediations take much less time and can be scheduled in weeks, rather than the years that a trial can take.
  • Mediations are confidential and things said to the mediator cannot be used against a party in outside proceedings.
  • Resolutions reached in a mediation can also be made confidential, if that is important to the parties.
  • Mediation is much less expensive than a lawsuit.
  • Mediation gives parties the power to control the outcome of their dispute, rather than being at the mercy of a judge or jury.

Let Business Litigation Attorney Jonathan D. Schmidt Represent You at Your Next Mediation

If you are currently involved in a business dispute, it is worth considering whether mediation may be a more effective, and less stressful alternative to litigating your claims. Experienced business litigator Jonathan D. Schmidt has assisted countless Iowa businesses with mediating their disputes and is available to assist you. To find out more about how he can help, contact us online or at (319) 423-3031.