Is Mediation a Good Alternative for Resolving Business Disputes?
Updated: May 17
Have you thought about trying mediation to resolve your business dispute instead of a lawsuit?
Years ago, I thought I might make a good mediator, especially for business and real estate disputes. I thought my experience representing parties in business and real estate disputes would be an asset to people seeking mediation. I completed a week-long mediation training course. The training focused on how to help adverse parties discover a resolution to their dispute, without suggesting possible solutions. My experience in the course dampened my interest in mediation because I felt like the "no suggestion" approach was inefficient, especially when the parties might not know the law, what might customarily happen, and how a court might resolve their dispute.
Virginia lawyers are required to discuss alternative ways to resolve disputes (i.e., an alternative to a lawsuit) with their clients. One possible alternative is mediation.
I participated in my first mediation a few weeks ago for a client with a business dispute. This is a dispute between four people. A lawsuit already has been filed, but the time seemed ripe, based on the results of pre-trial discovery and rulings on pre-trial motions, to try mediation. I am not representing my client in the lawsuit, but my client asked me to be there to provide input from my perspective as its business attorney.
The mediation was nothing like the mediator training I had received. The mediator (who was a retired judge) did not help the parties discover their own resolution without making suggestions. Instead, he facilitated a negotiation by explaining his views on certain issues, explaining his opinion on the strengths and weaknesses of each side's position, and suggesting ranges for monetary settlement based on his view of the lawsuit. I thought this approach was much more practical and effective than the mediation theory I was taught in my mediation training.
My experience helped me better understand how mediation can be a better alternative to litigation for resolving business disputes. If the mediation is a negotiation facilitated by a neutral third party who can help each party see the strengths and weaknesses of its position and evaluate the likelihood of success and value of the claim, then I think mediation is valuable. Even if the mediation does not result in a settlement, each party walks away with valuable information that might help them negotiate a settlement later on.
If you have a business dispute, you should explore whether mediation might be a good tool for resolving the dispute.