Creative Solutions For Preventing And Resolving Legal Problems

How mediation can benefit those embroiled in a business conflict

On Behalf of | Jan 1, 2024 | Business Law |

Mediation is a common form of alternative dispute resolution. Those who cannot settle a dispute on their own can attend mediation to negotiate a settlement with the other party. Successful mediation leads to a signed agreement and can prevent a matter from going to trial in court.

Frequently, people think of family law matters when they think of mediation. It is common for those disagreeing about custody matters or going through a divorce to try to settle disagreements in mediation. However, mediation is an alternative dispute resolution system that can work for people in an assortment of different scenarios.

For example, although businesses largely made use of binding arbitration clauses for years, doing so has begun to fall out of favor. Many companies now prefer to request mediation instead. How might mediation facilitate the resolution of a dispute between businesses?

Mediation focuses on compromise

Business disputes may arise due to different interpretations of a contract or unexpected hardships that interrupt company operations. Both parties may feel justified in their approach to the disagreement and may refuse to acknowledge the needs or perspective of the other.

Mediation can help in such scenarios by facilitating communication and compromise. Successful business mediation sessions require that both sides embroiled in a dispute present their version of events to the mediator and then discuss what they believe would be an appropriate resolution. The mediator can help facilitate more effective communication and could help the parties reach a compromise that they both agree is appropriate given the circumstances.

Mediation keeps things private

When business conflicts go to court, they may attract the attention of the local media. Any reporting about the lawsuit might result in permanent records available online that prospective employees, business partners or clients could find when searching a company’s name in the future. Details shared in court can also become part of the public record.

Companies that address conflicts in mediation can resolve the matter privately outside of court. Whatever discussions they have should remain confidential. It is therefore possible to discuss matters that relate to the details of daily business operations or the misconduct of specific parties without worrying about causing permanent reputation damage or destroying the working relationship between the two parties.

Considering mediation could be one way for business owners and executives to resolve conflicts that could affect company operations and finances in ways that can minimize tensions, conflict and the potential for reputational damage moving forward.


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