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BizReport : Internet Marketing 101 : September 08, 2021

Can Companies Switch From Courts to Mediation?

For most companies, there comes the point where disagreements and disputes arise. In such cases, they can choose to handle these differences with mediation or go to trial.

by BizReport

Many large corporations seek mediation first to avoid costly and drawn-out proceedings. For example, Microsoft has a strong policy to encourage resolving disputes informally whenever possible. It typically creates a better outcome for everyone involved.

Using mediation can be more beneficial to both parties rather than going to court. Here is what you need to know about mediation and whether it is right for you.

What Is Mediation?
According to the American Bar Association, mediation is where conflicting parties reach a compromise outside of the court system. It entails enlisting a third-party mediator with no special interest in the outcome.

A mediator serves to help mitigate any negative outcomes, improve rationality in proceedings, and facilitate an acceptable solution for both parties. The mediator does not actually decide the outcome as a judge or arbitrator would. Still, they help resolve the issue by allowing each side to air their disputes.

Mediation, also referred to as conciliation in other places, was once primarily used for large corporations. But it has grown in interest in the past few years as an alternative for businesses of all sizes who want to avoid the delays and costs of lengthy litigation.

Mediation typically appeals to both parties because it gives everyone equal footing and provides each side with more control over both the process and the outcome.

However, both parties must agree to resolve the dispute. Even after agreeing to mediation, one party can abandon the continuation of the process. This means that both sides have an equal say in how the process plays out.

Mediation vs. Going to Court
There are benefits both to utilizing mediation and going to court, depending on your situation. Some advantages to mediation include:

Speed. The legal system is notoriously slow. Procedural rules can make it go at a snail's pace, especially when evidence and witnesses get involved in the process. While some jurisdictions are faster than others, it can still take much longer to take a case to court. If you need your dispute solved quickly or just want to avoid the slow pace of legal disputes, then mediation can be an excellent option.

Expense. Because of how both labor-intensive and time-consuming litigation can be, law firms charge outrageous fees to handle it for you. If your case has little merit or you have a smaller business, legal fees can add up quickly. Plus, it can be a significant financial burden if the process drags out. It is less expensive to hire a mediator as opposed to a team of lawyers.

Preserve relationships. The aggressive nature of legal disputes can destroy any possibility of cooperation in the future. Instead, mediation is a way to satisfy both parties and encourages collaboration to come up with a solution. It is more civil and less confrontational, which can help maintain a relationship that would otherwise be ruined in the courtroom. When it comes to a professional dispute, business relationships are critical for any organization. Mediation helps improve them.

If both parties are anxious to settle and can come to an agreement, then mediation is the faster and less expensive route. However, there are also situations where going to court is the better option:

Compulsory. Both parties must agree to mediation. If they cannot or are unable to agree, then going to court is the only option to get a settlement. Once a lawsuit is filed, the defendant is required to answer whether they believe they did something wrong or not.

Mandatory attendance. Likewise, mediation is optional at each stage. Even after agreeing to mediation, any party can back out. However, no part of the litigation process is optional. Involved parties have to be active at each stage of the lawsuit or face punishment.

Litigation. Some choose the courtroom because no one needs to sit down and discuss together. Instead, litigation entails exchanging documentation, trading information, filing requests, and going to trial. While there are times where a judge may require some kind of dispute resolution if they cannot reach one, the case goes to trial.

For cases where both parties cannot settle their differences or one party refuses to respond, going to trial is the next option.

How Does the Mediation Process Work?
While the mediation process can vary depending on the circumstances, there is typically a set structure in the mediation process:

Agreement. Both parties must agree to mediation. Typically, one party will request mediation.

Initial contacts. The initial contact between the mediator and parties entails setting up the time for the first meeting and agreeing to share information.

Meetings. In the initial and subsequent meetings, the mediator and parties will decide on the ground rules for the process. They will then pinpoint any issues and discuss the interests of both parties. From there, they explore different choices for the settlement and assess all options.

Concluding. Once both parties have agreed on an option, they can then commence in a settlement.

Can Mediation Resolve Your Company's Dispute?

Mediation can apply to a number of situations:
- Commercial transactions
- Patent claims
- Payment disputes
- Computer contracts
- Mergers and acquisitions
- Renewal rats
- Research and development (R&D) contracts

Switching From Courts to Mediation?
If your company has already initiated court proceedings, is mediation still an option? Absolutely. The good news is that mediation can be tried at any point. In some cases, the judge may even recommend mediation before hearing the case.

It is possible to mediate after proceedings have been issued. However, if you decide to pursue mediation, be sure to take a proactive role. That way, you can show the court you are making every effort to resolve the conflict instead of dragging things out.

Mediation for a Better Outcome
Mediation is growing in popularity because of its ability to create an outcome that works for everyone in a collaborative way. However, for certain situations, such as an uncooperative party, courtroom proceedings may be best. For large companies such as Fortinet, settlements through mediation can create a better outcome and resolve differences quickly. It entails a fairly simple process and can be commenced at any point.

When it comes to encouraging cooperation and salvaging relationships, mediation can provide the perfect solution.


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