Why mediation works for small business 

shareholder dispute, disputes, dispute resolution

Disputes are a common occurrence for small-business owners, and while we’d all like to avoid them and hope they can be resolved with minimal stress.  Sometimes, especially when emotions are running high, negotiations grind to a standstill or both parties reach an impasse. 

So, when negotiations have so far failed, you have a few choices. You can drop the matter, and decide the effort and stress is not worth your time and energy, you can pursue court action or look at alternative dispute resolution methods. 

Mediation, which uses a neutral third party to help resolve a matter, is one way of resolving a dispute which has several significant advantages over litigation, and it’s ideally suited to small business. 

Here are five advantages of mediation, which make it an increasingly popular form of dispute resolution.   

  1. It’s cost-effective and successful. Taking a matter to court can be a very expensive option, with lawyers, barristers and expert fees, lost time from work and other associated costs quickly adding up. And if you lose the court action, you might be on the hook for the other party’s costs. It’s not only cheaper than litigation it’s very successful, with around 85 per cent of disputes being able to be settled through mediation.
  2. It’s fast and flexible. The waiting time to hear some matters in court can stretch to many months, due to busy court lists, time taken to organise evidence and sometimes multiple court appearances. It’s also possible for one of the parties to create delays to frustrate the legal process. With mediation, you choose the time and location, and if both parties are willing participants a matter can be solved in a matter of weeks. 
  3. It’s confidential. Generally, matters in court are on the public record and if the dispute is with someone like a supplier, client or employee or involves sensitive IP, it may be in both parties’ interests to have the dispute solved by mediation which is confidential. Even if the dispute ends up in court, anything said in mediation remains private, and cannot be used as evidence.
  4. It provides closure. Often people choose litigation because they just want their day in court, and want to be heard. However, unlike a court case where a magistrate, judge or jury will determine the outcome, when it comes to mediation, the result, which is enforceable, will have input from both parties to the dispute. This often leads to much higher levels of satisfaction when compared to the binary results of litigation. 
  5. It helps to maintain relationships. Sometimes a dispute can involve a party you will have ongoing contact with like a landlord, employee or supplier. There’s a much higher likelihood of maintaining a relationship after mediation, compared to the much more stressful and expensive option of litigation.