Should a Small Business Mediate Now or Later?

When is the right time to mediate?  The answer to the above is “that depends.” In accordance with the mediation rules, parties can mediate when they voluntarily agree to participate in the mediation process.  For a small business in today’s economic environment, the answer may be “as soon as possible.”

Think of it this way. If you cut yourself and are bleeding profusely, do you let it continue to bleed? Not likely. Instead, you would probably wash off the cut, find some healing salve and put on a bandage.  If it’s really deep, you might even visit an urgent care center or a local doctor. We treat ourselves with care and quick, carefully thought out action. Why would you treat your business issues, such as contractual breaches, disagreements, or collections, any differently?

Perhaps it’s the idea of a potential conflict with a customer, client, vendor, contractor, subcontractor or friend. Perhaps it’s the cost of litigation (both financially and emotionally). Perhaps it’s the lack of understanding of remedies and processes available.

Mediation attempts to reduce the perceived conflicts and avoid the cost of litigation. Mediation is also a process that is available to anyone at any any time. This is something businesses often do not realize. Any time includes the time prior to speaking with an attorney or filing an action in a court of law. This is not to say that attorneys are not beneficial to the mediation process; they certainly can be and many times are. However, as long as the other party is willing to voluntarily seek the assistance of a mutually agreed upon neutral third-party, then you and your business can avail yourself of the assistance of a mediator with or without the added cost of legal representation.

In my experience for collection related matters, I have seen numerous small businesses forego collection of outstanding accounts due to the amount owed (i.e. $200-400). If you add up several of these accounts, you quickly start nearing the thousand-dollar plus mark. As you know, every dollar counts, dollars that could help propel your business. Mediation is an opportunity to address each side’s issues regarding non-payment and to determine whether there is a mutually agreeable settlement opportunity available. I have seen many businesses sit on their rights, only to realize later that the other business has since dissolved, making recovery unfeasible if not near impossible.  If you participate in mediation early, you just might be able to recover some funds or find an alternative source of repayment.

In a non-collection sense, an early mediation may assist in determining each side’s position in a disagreement. Oftentimes one side just needs to feel as though s/he is being heard. Some disputes are about principle as well as principal. In these situations, an early mediation may assist in squelching emotional fires of those involved, potentially saving you and your business from a long-term headache.  Mediation is an opportunity to hear first-hand what the other side is really thinking, feeling and going to argue should the matter escalate. Even if a resolution is not reached, the process should provide you with valuable insight and information, which may aid in resolution at a later time.

Mediator rates vary and are by the hour due to the nature of the process. Hourly rates typically start around $175 per hour and can be as much as $400 (or more).  Depending on the issues, mediations can take anywhere from 30 minutes to eight hours, sometimes longer depending on the complexity of the issues and the number of parties involved. Similar to hiring an attorney or selecting a doctor, the hiring of a mediator is an important decision. Check to see what experience the mediator has with your particular issues. Do not be afraid to ask the mediator what his/her mediation style is.  His/her style can shape the mediation process.

If you live in Orange County, Florida, you may qualify for free Citizen Dispute and Family Law Mediation services through the Orange County Bar Association. Free Mediation services include the following business related issues: landlord/tenant disputes, property damages, recovery of money and/or property, harassment, disorderly conduct, and consumer complaints. Visit: http://www.orangecountybar.org/mediation.asp for more information on this free program. For others outside the area, check with your local bar associations to see if they have a similar program.

Mediation is not about right and wrong; it’s about trying to resolve your issues in a confidential forum. If you have an opportunity potentially to resolve an issue for free or little cost, why not try to stop the bleeding before you need a surgeon?
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[1] A mediator is not a judge or an arbitrator; s/he does not have the power or authority to make any rulings or judgments and cannot force any participant to take a particular course of action. A mediator is also not to act as an attorney and cannot offer either party legal advice.

[2]The mediation process occurs when the parties agree to abide by the rules of confidentiality and allow for a neutral, third-party to facilitate a discussion of the parties’ issues. If a resolution is reached, the mediator shall make sure the agreement is memorialized in writing.

©2011 by Innes Law Firm, P.L.

Alyson Innes, Florida Supreme Court Certified County & Circuit Court Mediator

Alyson Innes 

Phone: (407) 286-6263
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