By Jade Chounlamountry, Esq. | Legally reviewed by Aviana Cooper, Esq. | Last reviewed August 28, 2023
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If you want to go to court, it can be challenging for a small business to come up with the money to litigate. Even finding the time to attend hearings can cost your small business a lot of money. Owners of small businesses can face personal repercussions for deciding to go to court, such as losing friends or harming reputations.
However, there is an option that many small business owners should choose when faced with business disputes. Mediation can solve many issues without some of the drawbacks that litigation poses.
ADR gives small business owners an alternative to traditional litigation for conflict resolution. It involves mediation, arbitration, and negotiation. These methods let entrepreneurs handle disputes and control outcomes. Opting for ADR often means faster resolutions, lower legal costs, and friendlier settlements. This helps businesses grow and succeed. ADR preserves resources and builds strong business relationships. ADR lets entrepreneurs focus on innovation, expansion, and customer service.
Traditional business litigation can be time-consuming and expensive. There's a different option called mediation, which may be better for small businesses. Mediation is a cost-effective and quicker method to resolve conflicts.
In mediation, a neutral third party helps people talk and work out their problems. Mediation is a confidential and collaborative way for parties to resolve their disputes. This works well for minor issues in business relationships. It's like finding a unique solution for each problem.
A mediator guides the conversation between the parties involved during the mediation process. These mediators understand legal issues, including real estate, employment law, family law, personal injury, and more. Mediation can help discover new paths to better solutions. It helps small business owners take charge of solving their problems. This way, they can find smart, effective answers that might not be obtained in court.
Mediation isn't limited to specific disputes but rather is a versatile tool that can address various legal issues. From shareholder disputes to probate matters, child support issues to family business conflicts, mediation offers a simpler approach to conflict resolution. Mediators train in various legal areas, including employment law and business law.
Small business mediation offers several advantages. Generally speaking, mediation is much more cost-effective compared to lengthy and costly court filings. You can find free to low-cost mediation services through local centers or bar associations. In addition, even if you end up paying for a mediation session by the hour, you will split the costs with the other party.
Mediation is less time-consuming than traditional litigation. Mediation can take several hours instead of weeks, months, or even years like litigation.
This approach allows you to focus on operating your business rather than spending resources on a lawsuit. Mediation services promote the preservation of business relationships. You can maintain business relationships by resolving conflicts amicably and confidentially.
Many local bar associations often list mediation services in the area. The internet is also a great place to find mediation services in your area. Some private attorneys also offer mediation services apart from regular practice.
Check if your business is a member of a local small business association (such as a chamber of commerce or the Better Business Bureau). Often, these associations have mediation services designed for small business owners. This is helpful, as you will not have to explain to a mediator why certain aspects of your small business are more important than others.
Businesses often use mediation as it can be an excellent alternative to litigation in certain situations. Consider mediation if you are a small business owner with a legal dispute. To learn more about the process, visit FindLaw's directory of ADR lawyers.
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