Mediation can be a cost-effective and efficient method to resolve complex commercial business disputes. This form of alternative dispute resolution is often required by individual contracts as a first step to litigation. When both parties are willing to compromise, mediation can resolve a wide range of issues.
Caveat: For mediation to be successful, both parties must give and take.
Although everyone usually goes away from mediation unhappy, utilizing the process can save a significant amount of time and expense — and help avoid protracted litigation.
What is Mediation?
Mediation is an alternative to litigation in which a neutral third party called a mediator assists the parties in achieving a resolution to their conflict. Mediation is not – or at least should not – be an adversarial process. The mediator facilitates discussion between both sides and helps them communicate their goals and objectives. Unlike in litigation — where a judge or a jury determines the outcome — parties that participate in mediation work out the terms of their own settlement agreement.
Advantages of Mediation
When parties agree to mediate a commercial dispute, they are afforded numerous benefits. Mediation can avoid the uncertainty of litigation. Parties are often more satisfied with mutually agreed-upon results, than if they had allowed a resolution to be imposed by a judge or a third-party decision-maker.
Specifically, mediation can offer parties facing a business-related conflict the following:
- Greater control — Parties who agree to participate in mediation have a greater degree of control over the outcome of their case.
- Confidentiality — While litigation occurs in a public courtroom, mediation takes place in a private, neutral setting. Communications during mediation sessions are strictly confidential to promote open and honest settlement discussions.
- Amiability — Many commercial disputes occur between parties with an ongoing business relationship. Mediation can often allow the parties to preserve these relationships and remain amicable.
- Flexibility — Mediation is informal and allows for flexibility to meet the parties’ needs. The dispute resolution process can be tailored to satisfy their specific requirements.
- Cost-effectiveness — Since mediation is not adversarial, conflict is often reduced, resulting in the matter being resolved quickly and inexpensively.
The resolution reached during mediation can be binding or non-binding. However, since the process is entirely voluntary, either party can walk away at any time. Mediation can be attempted multiple times, with each side incurring the costs of their own legal bills. The mediator’s fees are typically split between the parties.
What Should You Expect From Mediation?
Mediation may take place either before or after a lawsuit has already been filed, depending if a contract is in place that might require mediation. The process begins when both sides agree to participate in mediation and decide upon a mediator. Each side prepares a summary of the dispute for the mediator to review in order to provide them with details concerning the background of the case.
Depending upon the complexity of the dispute, a case can take as little as one or two sessions to settle. Others may not settle at all after several attempts and will proceed through the litigation process. As long as progress is being made in the case, the mediator will continue to work with the parties. Importantly, a settlement can only be achieved through negotiation and compromise.
In mediation, neither side “wins” or “loses.” But it’s crucial to be aware that two elements must be agreed upon in every business dispute — liability and damages. Liability must be established before damages can even be considered. Mediation will typically fail if the parties cannot agree on the issue of liability, resulting in the need for litigation.
Contact an Experienced New York Commercial Litigation Attorney
Mediation can be a cost-effective and efficient option to resolve a variety of commercial matters. Providing skillful negotiation and effective advocacy, the attorneys at Brinen & Associates are committed to guiding clients through the mediation process and do not hesitate to bring a case to litigation when necessary. Call (212) 330-8151 or send us a message to learn how we can assist you.