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Mediation for Small Businesses

Friday, December, 21, 2012


A small business is likely to experience conflicts similar to those of large business, albeit on a smaller scale, regarding contracts, vendor relations, customer disputes or regulatory disagreements.  In addition, a small business may experience disputes similar to those of an individual such as disagreements between neighbors or partners.  Often the small business will feel that resort to the judicial system is not the solution, due to cost, time or other factors.  Further small businesses are unlikely to have the support systems of large companies - public relations, human resources, and legal departments – to resolve these disputes.  However, the small business may still desire a solution, as it finds that living with the status quo is not acceptable.     

It may be difficult for a small business to allocate the time, money, expertise and other resources to deal with even a relatively minor dispute through the legal system.  In addition, the legal system is unlikely to provide the small business with the type of amicable solution that it needs to maintain its relationship with the other party.

The Solution: Mediation

Mediation provides a small business with another method to resolve conflict by dealing with the needs and interests of the parties.   The mediator - a neutral third person – will meet with the parties, together and individually to help them to resolve their conflict together.  Because the parties reach a mutually acceptable agreement, the parties are likely to adhere to it.  Further, the mediation process experience will help empower the parties to resolve a future conflict. 

Mediation Advantages

Mediation is generally significantly less costly than hiring an attorney and engaging in litigation.  Further, since the parties share the cost of the mediator, the cost is further reduced.   In addition, mediation is less time consuming that litigation, reducing the allocation of resources required and thus minimizing the disruption experienced by the small business.  Mediation also helps keep disputes private. 

Most mediations result in settlement. This generally means the parties leave with a signed agreement or memorandum setting forth the agreement of the parties. The parties may decide whether or not to have their agreement enforceable by a court.  Even if the parties don’t reach a resolution through mediation, the parties will often still eventually reach a resolution based on the dialogue started during mediation and the insight each side has gained into how the controversy is viewed by the other side.  .

In summary, mediation is efficient and cost effective, with the added benefit of preserving and even building relationships between the disputants.

Posted By:
Jay Lazrus
301 384-9579