Here’s a money-saving idea for Michigan businesses — reduce the cost of resolving disputes involving your company by using mediation as an alternative to lengthy grievance, hearing or court proceedings.
Conflicts arise even in the best-run businesses. Disputes involving managers, employees, business partners, suppliers or customers can disrupt work, delay projects, distract management and end business relationships. There are times when litigating these disputes is the only answer.
However, going to court can be costly and time-consuming. You can lose even if you win when the result is a damaged relationship that once was profitable.
While litigation may be necessary for some disputes, mediation can reduce transaction costs by saving time and expense, and can result in satisfactory outcomes for all parties. The parties develop solutions that fit their situation. They control their own destinies.
Disputes are often caused by miscommunication, differing perceptions or interests that go unsatisfied in the work or business-to-business relationship. In mediation, the parties can address these issues and devise solutions that courts cannot offer.
Instead of discipline or damages, a dispute may be turned into revised working arrangements, revamped supply schedules, more accurate product specifications, clearer customer service policies or simply better communication. All parties stand to gain, and that can increase productivity, free management to focus on business and strengthen relationships with those who can help the company prosper.
A neutral third party who is trained in mediation skills and has experience in business matters aids the mediation process. The mediator helps the parties communicate effectively and focus on solving the problem. He or she has no authority to impose an outcome.
Mediation is designed to be a quick, voluntary, confidential and impartial process that enables the parties to find solutions at minimal cost and in a collaborative fashion before running the adversarial gauntlet. It can significantly reduce transactional costs while preserving important business relationships. Successful mediation results in written agreements enforceable in court.
Mediation can be used at any time. Indeed, a dispute that goes to court may very well be referred to mediation under Michigan court rules. Agreeing to mediate early on, by contract or company policy, can create or reinforce a commitment to joint enterprise, including the enterprise of reducing dispute resolution costs.
Mediation is having an impact. In a prominent study of Fortune 1000 companies by the ICR Cornell/PERC Institute on Conflict Resolution with PricewaterhouseCoopers LLP, 80 percent of respondents said that mediation saves time and money. Nearly 83 percent said they used mediation because it enables the parties to resolve disputes themselves.
Eighty-one percent found it a more satisfactory process than traditional methods. Sixty-seven percent said it yields more satisfactory settlements. Fifty-nine percent said it preserves good relationships.
“In sum, these responses indicate that mediation provides not just an alternative means to conventional dispute resolution but a superior process for reaching a resolution,” the survey concluded.
Leaders from the Dispute Resolution Association of Michigan, the State Bar of Michigan ADR Section, Michigan State University College of Law and the business community are forming a Michigan business mediation program known as MBA. The purpose of this program is to help Michigan businesses reduce costs and develop solutions in resolving their disputes.
The program will work in tandem with Michigan’s Community Dispute Resolution Program, a network of nonprofit conflict resolution centers that serves all 83 counties in Michigan. This program represents a cooperative effort between the business and nonprofit communities to offer a professional service for efficient resolution of business disputes.
Richard L. Braun II is a member in the Detroit office of Dickinson Wright PLLC. He serves as treasurer and as a member of the executive committee of the State Bar of Michigan Alternative Dispute Resolution Section. For additional information on the mediation program, e-mail [email protected] or contact Braun directly at (313) 223-3575 or [email protected].