Dispute Mediation: Is an effective method for addressing a variety of business-related matters, including:
· Negotiating an ownership and/or partnership agreement when forming a new business or professional practice.
· Resolving disputes between principals of an existing business or practice.
· Renegotiating aspects of an existing ownership and/or partnership agreement.
· Negotiating an amicable dissolution of an existing business arrangement when dissolution is the desired outcome.
· Resolving conflicts between businesses.
· Resolving personnel disputes.
Mediation helps to establish and maintain successful working relationships. In today’s ever-changing business environment, the difference between success and failure is often a function of the quality of the relationships within an existing business as well as between businesses.
Mediation has many advantages over traditional approaches, including the following:
· A “win-win” result is often achieved because the agreement is satisfactory to each person.
· New businesses can move forward more quickly as the principals have a clear, specific agreement about roles, responsibilities, goals and objectives.
· Existing businesses can continue to grow and thrive, no longer hampered by unresolved problems or unclear agreements.
· The parties’ ability to preserve an existing business relationship is enhanced.
· It is less costly and less stressful than other alternatives, especially litigation.
· A final settlement can usually be reached more quickly.
· It provides a more confidential, informal, convenient and comfortable atmosphere in which to address the decisions that need to be made.
The results stand the test of time. Research shows that people are more likely to follow through with a mediated agreement and are less likely to engage in future litigation.
Mediation is a collaborative problem-solving and decision-making process. The goal is to help people make decisions that address as many of the needs and concerns of everyone involved as possible. The emphasis of the process is on mutual satisfaction, not winning and losing.
Prior to the start of mediation, we offer a free consultation to anyone who wants a face-to-face meeting with the mediator before committing to the process. This meeting is scheduled with the parties together and lasts approximately one-half hour. It is optional, however there is no charge.
The first formal step is to meet separately with each person. The purpose of this interview is to obtain a brief history of the situation at hand, get to know each person and his/her perspective on the issues that need to be addressed. This includes an understanding of one’s needs and concerns, as well as one's thoughts about how to resolve those issues. (Initially, this is easier to do if the other person is not present.)
Most of the remaining time is spent meeting together. During these sessions, we assist the parties in making decisions that meet as many of their needs and concerns as possible. At the beginning of the first joint session, the mediator presents the parties with a summary of the issues they are to address, based on what was learned in the individual interviews. Once everyone agrees on the agenda, the process begins wherever the parties chose.
We encourage our clients to make their agreements as detailed as possible. The more detailed the agreement is now, the less room there is to argue about what it means in the future. One of the reasons former spouses end up in litigation and/or mediation is because portions of their agreement were not clear.
Once an overall agreement is reached, the mediator will prepare a memorandum of understanding that describes the terms of the agreement in great detail. If either person has an attorney, we ask that the agreement be reviewed with the attorney before it is finalized or signed. Any questions raised by the attorneys are brought back to mediation in order to iron out any remaining wrinkles.
The individual sessions are scheduled for one and one-half hours at a time. The joint sessions are usually scheduled for two-hour blocks of time, as more can be accomplished in one two-hour session those in two one-hour sessions. However, the clients are charged only for the time that is actually used.
Negotiation formats vary in the degree of structure. Generally, the higher the level of trust between the parties, the less structure that is needed. Some examples of formats from the least amount of structure to the most are:
· Direct discussion between the parties with no one else involved.
· Direct discussion with the help of a facilitator or mediator.
· Collaborative law process where attorneys actively participate in the negotiation process as advisors and spokespersons for their clients, but not in an adversarial manner. Other professionals may participate as needed.
· Negotiations through and/or with the assistance of attorneys who represent their clients in an adversarial, litigation mode.
· Settlement conference situation, where the parties and their attorneys go before a person of authority (attorney, judge, former judge, etc.), who uses experience and expertise to push them to make an agreement. Often times, that person shuttles between the parties who are kept in separate rooms. This may occur just shortly before they are scheduled for a court hearing.
Mediation vs. Arbitration
The difference between Mediation and Arbitration is straightforward. Small Business Mediation is voluntary. The parties mutually agree upon a fair settlement. Arbitration is mandatory. The Arbitrator makes a ruling, which is final. Arbitration is similar to court except it is quicker and cheaper. Arbitration clauses are included in many contracts and business agreements. Most Small Business disputes and complaints are resolved by voluntary Mediation before enforcing mandatory arbitration clauses. The major disadvantage with Arbitration is: The Arbitrator Ruling is Final. You cannot take further legal action in Court. In Small Business Mediation if both parties don't come to mutual resolution, the options for Arbitration or Court Litigation still remains.
Complaints vs. Dispute
Complaints are an expression of displeasure, grief, regret or resentment. A dispute is controversy that parties actively disagree; argue about, a matter of personal rights or policy.
Summary
Business people involved in a dispute usually consider filing a corporate lawsuit in order to resolve the dispute. Taking their case to court for litigation usually occurs when efforts that involve informal dispute resolution fail. Courts of law are indeed the places to settle differences in opinions that characterize a business dispute.
However, nowadays, most businesspersons tend to shy away from litigation as dealing with it usually takes a lot of time and money.
Some cons in litigating a business dispute:
One of the main disadvantages in having a business dispute go under the court system is that the parties involve lose control over the outcome or judgment. In court, a jury or judge will make the decisions concerning the matters at hand. The decision would always tend to point out a winner and a loser.
However, in reality, both the winner and the loser after the litigation, tend to both lose significantly in terms of expenses, time and focus to the management of the business.
Judgment on lawsuits are usually unpredictable and a party may become so engrossed in winning out their position that they do not think of the possibility that they may lost the case.
The whole process of litigation usually becomes very galvanizing. The tension created between the parties during the process make it difficult for them to patch up their differences and continue with their partnership. Thus, this could have detrimental impact on their financial status.
With these adverse effects, it is not surprising that most businesses undergoing a dispute tend to consider alternative ways to resolve it, which is relatively time efficient, cost effective and may encourage the nurturing of the partnership of the parties.
One of these alternative ways is mediation. Mediation can be accomplished at any given time and anywhere favorable for the parties involved. It can also be done with a hired dispute attorney present, or even without such presence. However, it would always be more productive to have such an attorney monitor the settlements.
Everyone wants to be heard and respected. BMCS advocates for mediation based on the fundamental belief that individuals, consumers and businesses can resolve their complaints and dispute when provided skilled guidance and support. The focus of Small Business Mediation is on achieving quick, fair justice.
While every Dispute Resolution is unique to the organization under impact, there are logical steps to take to handle and avoid the confusion of how to act. Business Management Counseling Services can aid your company or organization prior and during this time. We highly recommend a pro-active approach of preparedness, however when a pro-active plan does not exist we can facilitate the least amount of collateral damage to the event.
Do you have a dispute with a business partner, supplier, customer, or employee? Perhaps I can assist in a viable resolution that will save you time, energy, and money. Contact me at stevehomola@gmail.com
Steve
Stephen J. Homola
Chairman & Founder
Business Management Counseling Services
