Once your business is up and running, you would probably love for it to always run smoothly. But California businesses often find themselves in business disputes that must be resolved.
Disputes can occur for various reasons and involve issues with different parties, including clients, customers, vendors or shareholders. Many business disputes involve a breach of a business contract.
Benefits of mediation
Before heading to court, you may want to consider mediation to resolve your business dispute. Mediation is typically less expensive and quicker than traditional litigation.
Since strong relationships foster the success and growth of a business, using a method such as mediation to resolve disputes increases the chance of preserving a good business relationship. However, being sued by someone often destroys that relationship.
You are not required to mediate a business dispute and both parties must agree to mediate. If you agree to mediate, California has many different mediation programs and services available.
If you choose to mediate, it is best to research mediators or mediation programs with experience mediating business disputes. The success of mediation can depend on the mediator and their ability to understand the issues involved and concerns, needs and goals of the parties.
Know what to expect at mediation
Mediation is a meeting, or series of meetings, between you, the other party and the mediator, who acts as a neutral third party.
While mediation is more informal than courtroom litigation, you should still gather evidence and prepare to testify as if you were going to court. Mediation involves more than a casual conversation between everyone. It is also not like courtroom scenes or business meetings you may see on television, where everyone shouts and talks at once.
Although every mediation format is different, generally the mediator will ask one party to testify and present their evidence. When they are finished, the other party presents their testimony and evidence.
The mediator may pause to ask clarifying questions. Each party can usually ask questions of each other.
Either throughout the process or after each party has finished presenting their side, the mediator will offer suggestions and guidance for resolution. While the mediator cannot order how the dispute be resolved or take sides, they can ask tough questions and offer strongly worded suggestions.
For example, if the mediator believes that the dispute should be resolved in your favor, they cannot outright say that you should win. However, they can point out the weaknesses in the other side’s argument. This is why it can be helpful if the mediator has some knowledge of California business law.
Mediation is not always the best choice
The goal of mediation is typically to obtain the closest to a win-win solution, which usually involves a willingness to compromise on both sides. Mediation also has a better chance of success if both parties agree on the issue and facts but cannot figure out the best solution.
There are some situations where mediation is not appropriate. Sometimes courtroom litigation is going to provide you with the results you want. Knowing how to move forward often requires some professional advice.
