Want to resolve business disputes without wrecking your bank account?
Picture this: you run a business. You’re working hard, things are going well, and suddenly… someone screws you over.
Maybe it’s a contract gone wrong, a supplier who won’t deliver, or an employee making bogus claims. Whatever the case, now there’s a fight.
And instead of getting on with running your business, you’re wasting time and money trying to come to an agreement.
Oh, and let’s not forget about all the stress, distraction and tension. Because you can bet your bottom dollar that it’ll put a massive strain on your working relationship.
Disputes are inevitable when it comes to running a business. But does that mean heading for court is the answer?
As it turns out…
There’s a much better, quicker and cheaper way to get disputes sorted. You just need to know where to look.
In this guide, I’ll cut through the noise and confusion. I’ll show you:
- Why Business Disputes Need Quick Resolution
- The Most Effective Resolution Strategies
- When To Use Mediation vs Other Methods
- How To Pick The Right Approach
Why Business Disputes Need Quick Resolution
Business disputes are a fact of life. No matter how well you plan, there will be times when you need to take action to solve a problem.
The real question is…
How you do it.
You see, when it comes to sorting out a dispute, every second counts.
Think about it…
The longer it takes, the more money you lose. And not just the money tied up in the actual dispute. But also the time and effort you spend fighting.
Court cases can go on for years. The median time from start to trial for federal civil cases is 35.6 months. Almost three years of headaches, lawyers’ fees and taking your eyes off the ball.
And that’s not even the worst part…
Business relationships are destroyed when you go to court. There’s no coming back. Once you sue someone, the relationship is usually over.
It’s no surprise that smart business owners are turning to alternative dispute resolution. Working with an experienced litigation lawyer who understands business legal services can help you get your ducks in a row and head down the right path.
The Most Effective Resolution Strategies
There’s more than one way to resolve a business dispute. In fact, there are several well-established and effective methods.
Let’s take a look at some of the most popular strategies…
Negotiation
Negotiation is the old standby. The tried-and-tested method of sitting down and hashing it out face-to-face.
It’s quick, informal, and very little fuss. You might even be able to reach an agreement without having to get anyone else involved.
The key is to come prepared. Know what you want and be willing to walk away if it’s not a good enough offer.
The secret to good negotiation:
- Come prepared with clear objectives
- Know your bottom line before starting
- Focus on interests not positions
- Keep emotions out of it
Negotiation is often the first port of call when it comes to disputes. And it can work.
Mediation
Mediation is the next step up. It’s a bit more formal than negotiation, and involves a third party.
A mediator is a neutral person who helps both sides come to an agreement. But unlike in arbitration or court, the mediator doesn’t make a decision for you.
The idea is that with a little guidance, both parties can work through their differences and find a solution that suits everyone.
One of the things that’s driving up the popularity of mediation is its success rate. Statistics from LexisNexis Legal show 87% of mediation cases settle. That’s a very impressive number.
The low cost and speed of mediation also help.
Benefits of mediation:
- Lower costs
- Faster resolution
- Confidential
- Parties control outcome
- Business relationships can survive
Pretty good, right?
Arbitration
Arbitration is a more formal way of resolving a dispute. The arbitrator hears both sides of the argument and makes a binding decision.
It’s kind of like a private court with faster timelines and more flexibility.
Arbitration can work well for:
- Complex technical disputes
- High-value conflicts
- Where a decision is required
- Contract clauses
The downside is you have to give up control. The arbitrator’s decision is normally final.
Hybrid Approaches
Sometimes you need the best of both worlds. Med-Arb is a hybrid approach which starts as mediation and, if it fails, becomes arbitration.
Talk first. Then, if you can’t agree, the mediator becomes the arbitrator and makes a decision.
The same can work the other way. Arb-Med starts as arbitration and becomes mediation.
When To Use Mediation vs Other Methods
It’s important to understand that there’s no silver bullet when it comes to dispute resolution.
There are many different factors that need to be considered. That’s why the best business legal services providers will sit down and work out the best strategy based on your individual needs.
That said, there are a few simple guidelines to point you in the right direction.
When you’re thinking about mediation, ask yourself these questions:
- Do both parties want to maintain the relationship?
- Does the dispute involve ongoing business?
- Is privacy important to both parties?
- Are there other factors besides money?
- Is time of the essence?
If you can answer ‘yes’ to most of those, mediation might be a good option for you.
On the other hand, if you need a binding decision, the relationship is already over or the dispute is complex, arbitration could be the way to go.
Save litigation as a last resort. If you need a decision in the public domain or you want to set a legal precedent, then it might be appropriate to go to court.
How To Pick The Right Approach
In the end, selecting the best business dispute resolution strategy for your needs isn’t rocket science. It does, however, require some honest self-reflection.
Asking yourself a few key questions can help:
- What’s the relationship worth? If you want to continue working together after the dispute is over, mediation is the way to go. Mediation is all about preserving relationships.
- How much can you afford to spend? Litigation is going to eat your budget for breakfast. Both mediation and arbitration are going to cost you less.
- How quickly do you need to find a solution? A court case can take years. Mediation can often be completed in a matter of weeks.
- What’s the best possible outcome? If you need creative problem-solving and flexibility, mediation is your friend.
- What does your contract say? Many business contracts have specific dispute resolution clauses. Make sure you read and follow yours.
Bottom line:
Most business disputes never need to see the inside of a courtroom. They just need two parties who are willing to come to an agreement.
The smartest move? Get dispute resolution clauses in your contracts up front before a problem arises. Prevention is always better than cure.
Bringing It All Together
Resolving business disputes doesn’t have to mean years of costly and stressful court cases.
In fact, most successful business dispute resolution strategies today are among the simplest.
Here’s a quick recap:
- Negotiate face-to-face
- Move to mediation if it doesn’t work
- Use arbitration for final decisions
- Consider litigation as a last resort
- Protect relationships
The data proves mediation works. In most cases, it’s a faster and cheaper solution that preserves your working relationships.
One more thing…
Every dispute is a chance to show professionalism and good character.
Handle it well and you may even come out the other side with stronger business relationships.
The best time to think about dispute resolution? Before you need it. The second-best time? Now.
