Thursday, April 5, 2012

How Mediation can benefit the Business Community

Businesses cannot always avoid disputes. They are bound to occur. The Chinese character for conflict ‘冲突’ means both "danger" and "opportunity". There are a lot of ways in which these disputes can be resolved. Litigation is the one that most businesses choose. It is not because it is the most effective, which it is not. It is because that’s the one everyone knows about. Only a few people know about how effective Mediation can be in solving disputes. When a dispute becomes a lawsuit, the parties become adversaries and relationships are destroyed. Mediation helps to preserve ongoing relationships.

Mediation is based on the premise and on the value system which says that parties to a dispute are the ones most capable of resolving that dispute, and that the parties themselves should play the central role in any efforts to work through their own conflicts.

Business Community has a lot to deal with already. Lengthy procedures and wastage of time on petty disputes take away focus from the main objective of the business. Mediation is less disruptive to the business. It requires less preparation time and so less time away from the business than when litigating in court. Time saved from non-business activities creates more time to further the business objectives.

The advantages to the business community in using Mediation as a dispute resolution method are:

  • The first and the most important is definitely the fact that the parties can control the process of dispute resolution. They can make ground rules. This gives them the flexibility to work more comfortably in solving the dispute.
  • Mediation lets the parties control the outcome of the dispute. If you go to court or arbitration, you are leaving the decision to a judge or an arbitrator. The result might be the right decision in law but may not be the best one for your business.
  • Cost of mediation is quite low compared to that of litigation. Lawyers are not compulsorily required and there are no compulsory rules of procedure which have to be complied with by the parties to the dispute. It is a major factor when one or both the parties are relatively cash strapped.
  • Mediating a dispute will allow the parties to deal with real issues. So instead of legal issues, more personal issues can be discussed.
  • It also allows parties to discuss technical issues at length. It might not be possible in a court room considering the shortage of time and lack of expertise of a judge.
  • A business needs to be fast and efficient. A dispute resolution which is also fast and efficient should be chosen. Mediation takes lesser time than litigation and has an higher chance of being successful.
  • One of the major factors that businessmen worry about is confidential information being discussed in open court. Mediation takes care of these confidentiality issues. It’s a private process where only a few members of both sides find out about things. Anything discussed in mediation cannot be used outside because all parties sign a non disclosure agreement. Thus, confidentiality is ensured.
  • Mediation sees to it that relationships are not affected in trying to solve disputes. It is very important for businessmen to see to it that they are on good terms with everyone. No one would like their business to suffer because of some past dispute. Disputes are short lived, businesses go on forever.
  • Parties don’t need to just solve their dispute. They also need to plan for the future. Mediation can sometimes build relationships which can turn out to be fruitful for the future. This is because, during mediation, the discussions are not restricted to just the present but also include the future.

These are just some of the benefits. The list is not exhaustive. Actual benefits may be more and are subjective. The benefit of Mediation over negotiation is that in negotiation, only both the parties are present and there is no one to moderate the discussion. This sometimes leads to acts like shouting, name calling and threatening which jeopardise the dispute resolution.

Mediation process generally has a third party mediator who is not inclined to support any of the parties. His main objective is to see to it that the dispute is resolved in the best way possible. The mediator does not obey to any of the parties, and is a third party, looking at the contraposition from an objective point of view.

Mediation works wonderfully well in real business problems. For example, it can help solve consumer disputes. If the company feels that the consumer’s problem is genuine then they can solve the dispute then and there.

Mediation can also be used to solve contract disputes, service matters and even labour problems. The fact that Mediation can be used in so many different spheres and that too with such high efficiency is amazing. Creative ways of resolving conflict by owners and managers can add to the bottom line of any business whether large or small. Disputes, however small and unimportant, distract and drain the businessman.

Mediation sees to it that all disputes are solved through a collaborative approach so that both the parties are happy and the relationship between them is not strained. Mediation is the first thing that should be tried when there is a dispute. If it fails, you can always go back to litigation and arbitration. The availability of a back up is also one of the big reasons why Mediation should be given a chance at all disputes.

The advantages for businesses in adopting mediation processes, either through outside contracts or internal programs, are multifaceted and immeasurable.

The courts of this country should not be the places where resolution of disputes begins. They should be the places where the disputes end after alternative methods of resolving disputes have been considered and tried.”- Justice Sandra Day O’Connor

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