Kolb Law Blog

Monday, November 5, 2018

Using Mediation to Resolve Business Disputes

What are the benefits of using mediation instead of arbitration to resolve a business dispute?

Any business owner can attest that conflict in the realm of business is inevitable.  Business owners deal with a wide array of people on a daily basis, including business partners, customers, employees, vendors, and many more.  When a serious conflict arises between a business owner and a third party, several options exist to resolve the matter.  The three main means of conflict resolution are mediation, arbitration, and litigation.  At times, contractual disputes must be resolved using a manner prescribed in the contract.  Other times, the parties have an option in their choice of conflict resolution method.  Our Providence, Rhode Island business law attorneys discuss mediation and why it might be the best choice to resolve your business dispute below.

Mediation Basics

Mediation offers business owners who are in the midst of a dispute the option to resolve the conflict with a neutral third party.  The parties to the conflict will meet with a qualified mediator who will assist them in reaching the best outcome possible.  In mediation, the parties remain in control of the outcome.  When an impasse is reached, the mediator will do everything possible to broach the stalemate and push the parties towards an agreement.

Benefits of Mediation

Mediation offers several major benefits to traditional litigation, and potentially arbitration as well.  Mediation comes with considerable cost savings.  Whereas litigation can be extremely costly, mediation eliminates the need for court fees, depositions, and some attorney’s fees.  Additionally, mediation is typically considered the quickest method of dispute resolution.  If the parties enter in good faith, it is entirely possible to reach an agreement within one or two sessions.  Even further, many business owners like the fact that mediation keeps control over the dispute within the hands of the parties. The parties are ultimately free to reach an agreement or call off mediation and proceed with litigation.  

Mediation vs. Arbitration

Mediation and arbitration are often confused.  While both methods allow the parties to avoid court litigation, arbitration and mediation are quite different.  In arbitration, the parties will submit evidence to an arbitrator, who will essentially act like a judge.  The arbitrator will issue a binding decision on the matter.  There is a time and place for both mediation and arbitration, but many business owners prefer mediation because it allows them to maintain control.  Contact a business law attorney for more assistance with resolving your business dispute.


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One Richmond Square, Suite 226W, Providence, RI 02906
Phone: 401-714-0622 / 401-714-0623
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