Mediation vs. Arbitration | Why Mediation is Effective

Why Mediation is an Effective Form of Dispute Resolution

January 21, 2020

When entrepreneurs are launching a business, anxious thoughts often permeate their minds. They will think about how they will fund their business, possible contracts, and even future mergers and acquisitions. Few worry about the possibility of litigation down the road. 

Business owners just like you sometimes get sued. However, must business disputes always be resolved in court? Have you ever given any thought to alternative dispute resolution approaches such as mediation? Even though you may not be dealing with any issues at this time, it’s advisable to be prepared. 

Who Wants Litigation?

No one, that’s who. But wait, aren’t there folks that view litigation as a wealth-creating vehicle? And, aren’t there people that are perennially in court, chasing damages? There’s always a possibility that someone will want to sue you. In most cases, however, you can choose to go to arbitration or mediation. 

In this post, we’ll focus on mediation. We believe mediation is a highly effective way to resolve disputes. We also believe it’s almost always best to avoid litigation. 

Litigation is typically expensive and consumes tons of precious time: Time you could use on productive activities such as sales and marketing. Also, court processes can drain you emotionally. The worst part is that you have no clue how everything will end. That’s why we advise our clients to give thought to seeking mediation first.

What’s Mediation? 

Mediation is an out-of-court procedure where the parties involved agree to solve their dispute themselves. Typically, this process happens in the presence of a trained, disinterested party (a mediator). The mediator helps them determine the best possible outcome for all parties involved. 

Mediators should be persistent individuals with great negotiation and persuasion skills. Normally, mediators can’t provide legal advice when facilitating this process. However,  the mediator (usually an attorney), typically writes the mediated agreement between the parties. 

The mediator’s role isn’t to judge or make decisions for the parties. Rather, their job is to guide them so they can decide the best course of action on their own.

In most cases, people choose mediation as opposed to the court process because of cost considerations. Let’s take a look at how mediation differs from arbitration? 

What’s the Difference Between Arbitration and Mediation? 

Many people use the terms arbitration and mediation interchangeably. That’s hardly surprising when you consider that these two processes share some aspects. 

One key similarity between them is that both are effective alternatives to the dreaded traditional litigation. Another similarity is that both processes have an impartial third-party mediating the process. In addition, the two processes can be binding or nonbinding. 

What are the differences? One is that arbitration is a binding process in most cases. Typically, arbitration happens in lieu of the usual trial process. While mediation can be a binding process, that’s infrequently the case. 

Another difference is that arbitration necessitates more than one third-party. Usually, each of the two parties chooses their arbitrator. Then, these two arbitrators find another arbitrator, forming a dynamic panel of three. 

Here’s another critical distinction between these two alternative dispute resolution processes, unlike mediators, arbitrators in the dispute act pretty much like judges. They examine the evidence tabled and determine its merit. In the end, they make a decision by majority vote. 

By contrast, mediation normally has one mediator that oversees the process. However, they can’t decide the case. They simply support the parties involved as they present their positions, exercising patience until they do the deal.  

Benefits of Business Mediation

We’ve made our position on the issue of mediation vs the regular court process crystal clear. However, what are the benefits of going the mediation route rather than pursuing justice in court? Let’s expound a bit on the benefits of business mediation mentioned above. 

1. Mediation Can Save You Money

According to the National Conflict Resolution Center, mediation costs significantly less than litigation. That’s mainly because the parties don’t need to present themselves before a judge to argue their cases. They also don’t need a judge to make decisions for them. 

Court costs can add up pretty quickly. It’s not unheard of for trials to cost each party as much as $100,000!

With mediation, it’s possible to conclude the process in a day. In such situations, you would probably pay just a few hundred dollars in total. Of course, how much you pay for mediation largely depends on how long the process takes. The case’s level of complexity determines this.

2. Litigation Drains People 

Few things cause as much distress as attending court sessions. Court cases can drag on for months, and that could cause you to feel hopeless. 

People use mediation as a dispute resolution approach because, for the most part, they are not involved in a fierce contest. Everyone involved wants the case to end and an agreeable solution to be reached.  

3. No Certainty with Litigation

With the regular trial, there’s no knowing how long the case will take and how everything will end. This emotionally exacting process can seem to continue forever, and you will worry the whole time. 

The judge can rule in the other party’s favor, and that possibility can be terrifying. What if the court awards the other party enormous damages? What if you can’t even afford the court’s award? What if you get completely wiped out? All these “what ifs” can make everything feel unpredictable, turning you into a bundle of nerves.

4. Mediation Saves Tons of Time for Everyone

In some cases, a mediated case can get resolved in a single day. That saves time for everyone. If your case isn’t overly complicated, you shouldn’t spend forever resolving it. Court cases, on the other hand, rarely conclude before those involved appear several times before the judge. 

Business Mediation Services

You’ve seen why working with a mediator makes sense. Would you like us to mediate your case? Our attorneys have mediated numerous processes. As a result, they’ve acquired a lot of experience and skills that can help you immensely.

Access Business Mediation Now

Whether you seek small business mediation or are a large corporation, our attorneys have you covered. We serve entrepreneurs in Cleveland and Chagrin Falls in Ohio, as well as Buffalo in New York. 

Sure, it may sound like we’re tooting our horn, but we’re indeed tested and proven dispute-resolution specialists. We’ll help you resolve your business disputes quickly and cost-effectively. Contact us now to learn more about how you can benefit from creative mediation. 


Guest Post by Jennifer McGregor
mcgregor_jennifer@publichealthlibrary.org
PublicHealthLibrary.org

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