Why do businesses mediate rather than litigate disputes?

Why do businesses mediate rather than litigate disputes?

On Behalf of | Jan 18, 2022 | Business Law |

Business disputes come in all shapes and sizes. One company might accuse another of unfair competition, like corporate espionage. A restaurant may have a dispute with its supplier, or a machine shop may bring a lawsuit against a former employee for a violation of a non-compete agreement. 

Complex business disputes may go to court, but often the parties involved can resolve them outside of court using alternative dispute resolution systems. Mediation remains one of the most popular choices. 

How does mediation help you resolve your business dispute?

You can talk openly in a confidential setting

Trying to litigate a business dispute or contract issue might mean that the very information you want to protect becomes public knowledge. Not only that, but litigation ranging from employment contract enforcement to breach of contract lawsuits could damage your company’s reputation. 

By handling things in mediation, you have the option of discussing any important issues without those conversations becoming part of the public record in court.

It is often more cost-effective to mediate

Going to court can drastically increase the cost involved in resolving a dispute. Not only do you have to pay for your legal representation, but you must also pay for the court’s time. The expense involved in hiring a mediator may be much smaller than the costs you would incur if you take the matter to court. 

You get to keep control over the solution

Perhaps the biggest benefit of mediation is that you and the other party decide the outcome, not a judge. You both have to agree that a solution is fair for the outcome of the mediation session to carry any weight. 

When you want to keep things private, speed up conflict resolution or push for a specific outcome, mediation could be a way to resolve a complex business disagreement.