When your business is entangled in a legal dispute, mediation offers a way to resolve the conflict that can save both time and money. But, you must enter into the process with the right frame of mind, says David A. Schaefer, an attorney at McCarthy, Lebit, Crystal & Liffman.
“Some companies use mediation to learn more about the other side’s case or position,” Schaefer says. “They view it as ‘cheap discovery’ or in other words, a means to prepare for their eventual day in court. As a mediator, I think the ultimate goal of mediation should always be resolution.”
If you don’t know enough about the other side’s position, there’s a better way to get informed, according to Schaefer.
“Start a conversation with your adversary and run through your questions,” he says. “Go into the process with a sense of urgency to understand, but also a spirt of compromise and intent to resolve the conflict.”
Smart Business spoke with Schaefer about mediation and the benefits it provides to businesses when used in place of traditional litigation.
What are the origins of mediation as a tool to resolve legal disputes for businesses?
In 1990, Congress passed a statute known at the time as the Civil Justice Reform Act. It was pushed by the American business and insurance communities in response to concern that civil litigation had become too expensive and was affecting the ability of U.S. businesses to remain competitive. Cleveland was one of 12 cities designated as a pilot city to see if mediation would work for commercial disputes.
Once this door was opened for cases that were already in the court system, people began to ask why they had to wait for their case to be sent to mediation by a judge. Today, most mediation cases begin as lawsuits, but it’s not uncommon for a dispute to skip the courts and go straight to mediation.
What enables mediation to be effective?
A mediator has nothing to gain by the outcome of your dispute. His or her role is to gather facts, hear from both sides and use that knowledge to drive the process toward a settlement that is acceptable to both parties. It may be helpful for the mediator to offer an opinion at some point, but it’s always done in a neutral way and from the perspective of an outsider who is examining the case for the first time.
Written mediation statements are an important part of the process. They provide an opportunity to explain in writing what has happened and what led to the dispute. The more complicated the case, the more important the mediation statements become. They give the mediator an opportunity to prepare notes and questions in advance of the mediation session.
These questions can be used to gain understanding about aspects of the case or to make one side think about a particular point, typically a weakness in that side’s case. It’s important through this writing process to pull together the points of the dispute that favor your side and at least privately compile the points that favor the other side. You want to be as informed as possible going into mediation.
What about the cost of mediation?
Mediation eliminates the need for depositions, the filing of motions and, of course, a trial. A typical mediator in Northeast Ohio will charge about $300-$400 per hour and the average mediation is eight hours.
When all is said and done, factoring in the cost of a mediator, attorneys on both sides and the preparation to get ready for the case, mediation will cost a company around $5,000. If it resolves the case, it’s always cheaper than what it would cost to go to court.
If you find yourself in a legal dispute, give your attorney clear direction as to what you’re willing to accept to resolve it. Be upfront about what you’re willing to pay if you’re the defendant or what you’re willing to accept if you’re the plaintiff. Consider the scope of the case and what’s at stake to ensure these figures make sense, so your attorney can properly represent you. ●
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