BLOG

Using Mediation as a Cost-Effective Mechanism for Resolving Disputes

04/26/2009

This is the fifteenth in a series of brief articles that Moye White is sending to its clients and friends to provide practical insight about the opportunities and challenges presented by today's economy.

Most businesses occasionally have disputes with partners, vendors, customers, employees or other parties. During unstable economic times, these disputes may become more frequent as businesses become more conscious of every penny. Mediation can be an efficient and cost-effective way to resolve these issues.

Mediation is an informal dispute resolution process where parties work to resolve their differences with the assistance of a neutral third party mediator. Mediation differs from arbitration because in arbitration, the arbitrator makes a binding determination on the outcome of the dispute. In mediation, the mediator does not make any determination, but works to facilitate a resolution between the parties.

Confidential and Open Forum. Mediation allows both parties a confidential forum to express their concerns and respond to the statements made by the other party. A skilled mediator helps to balance any difference in power to ensure that both parties have an equal opportunity to contribute to the discussion. The open forum allows the parties to address a broad range of concerns, from compliance with the terms of a contract to less tangible issues like feelings about the relationship between the parties.

Timely Resolution. Mediation can be a more efficient process than litigation because there is no formal process for filing and responding to complaints and no scheduling limitations based on the court’s docket. Many disputes can be resolved in a matter of hours and the mediation can be set on any date that is convenient for the parties and the mediator.

Cost-Effective. Mediation is typically less expensive than litigation or arbitration. With most mediations, there is no formal discovery process or preparation of a formal complaint. In some situations, the parties may choose to include their lawyers in the mediation process, while in others, there are no attorneys involved. Generally, the parties agree to split the cost of hiring the mediator.

Creative Solutions. The mediation process encourages the parties to work out a solution to address their concerns. The resolution is not limited by the terms of the contract or traditional judicial remedies.

Low Risk. Litigation and arbitration can be an unpredictable process because the resolution is determined by a third party. In mediation, the parties control the process. If they are unable to agree upon a solution, they can pursue other remedies.

Skilled Mediator. If your business dispute is related to a technical issue, the parties can select a mediator with experience in the relevant field who can help guide the parties to appropriate practical solutions. Mediators are not required to be attorneys, but should have some formal mediation training. The best way to find a good mediator is to ask around for a referral. Moye White has attorneys who serve as mediators and we frequently represent our clients in mediation, so we can provide referrals for mediators that we have worked with in the past. In addition, you can contact organizations such as the American Arbitration Association (www.aaamediation.com), Colorado Mediators & Arbitrators (www.coma.com/coma), or CPR Institute for Dispute Resolution (www.cpradr.org) to find an appropriate mediator for your situation.

For more information contact: Jackie Benson, Jerry Conover or Ted White, Chair, Transaction Section at (303) 292-2900.

If you prefer not to receive any unsolicited e-mails regarding Moye White information, please contact us at info@moyewhite.com.

Moye White LLP has prepared this bulletin to provide general information; however this bulletin does not provide legal advice and does not create an attorney-client relationship between the reader and Moye White. No legal or business decision should be based solely on the content of this bulletin.

ABOUT THE AUTHOR

Frederic K. “Jerry” Conover

Of Counsel

Edward D. (Ted) White

Attorney