You've just received a phone call from your attorney, saying the lawsuit you're involved in is being submitted to mediation. Is this good news or bad?
It depends on how much you know about mediation, an increasingly popular method of resolving disputes, often referred to as alternative dispute resolution.
It's one of three ways to settle a lawsuit. The old-fashioned method is to go to trial and submit the evidence to a judge and/or jury. Of course, this means others will make a decision that you'll have to live with.
The second way to resolve the issue is to hire an arbitrator. This person may be a retired judge or an attorney familiar with the type of conflict involved in the lawsuit. But again, it means one person will be deciding the outcome of your case.
The third option is to present your case to a neutral person a mediator who will listen to all sides, help you identify your most crucial issues, and find ways of resolving them. In important ways, mediators give you the most control because they allow participants to retain their power and determine a decision they can live with, without handing the case to strangers.
In mediation, you attempt to persuade not the mediator but the other side of the validity of your claims or defenses. This takes special preparation on your part.
First of all, you will likely consult with your attorney. Some mediations are done without the parties being represented by lawyers. However, they can help you understand the process and people involved.
Some mediators, for example, like to caucus privately with the parties, whereas others want everyone to be in the same room all the time. And there are those who like to talk only with the attorneys.
Some like the parties involved to present mountains of evidence, while others prefer to focus on the emotional content of the dispute.
In almost all cases, the net result of mediation is a more successful business resolution and a less anxious personal experience.
Unlike court proceedings, mediation lets you participate directly in the negotiations. You will be the decision-maker, and the mediator will look to you for your suggestions. Try to be as creative and flexible as possible in order to come up with an equitable and beneficial solution.
You also need to arm your attorney with the evidence to present a solid case. Presenting business records, accounting ledgers and other pertinent documents will save time, not to mention money and stress.
Remember, you are in control: If your attorney suggests hiring an expert, review the cost and inquire if a report might serve just as well. Whatever you do, make sure to go over all the evidence with your attorney well in advance of the mediation.
Since you are under no constraints from the court, you can take the time to reach a decision that satisfies everyone, even if it takes several sessions.
Usually, the mediator's fee is split between the parties, so it is to the advantage of both sides to make sure the mediator's time is used wisely. In fact, in many cases, multiple sessions may reveal where the real differences lie.
After all the facts are on the table, explore your worst-case resolution scenario. Assess whether the other party can pay you, or if they would go bankrupt upon your winning in court.
If you are defending a claim, estimate how the outcome will affect your business. Consider whether or not you should try to resolve it quietly to avoid negative publicity.
This work should be done with your attorney before the mediation meetings so you can respond correctly to the inquiries and allegations made by the other side.
Remember, mediation is just another form of negotiation. As a business owner, you have been a top negotiator since you opened your doors. By nature you are innovative and take risks. So don't be discouraged if during mediation it feels as though nothing will ever be resolved.
This is the time to determine the strength and weakness of your case. It may be up to you to find a way to bridge the impasse and keep the talks going. Make it clear that you want to go forward and let the other participants explore every conceivable resolution.
It might sound clich & #233;, but once you are no longer part of the problem, you can become part of the solution.
The odds are that someday you might get a phone call from your attorney telling you to prepare for a mediation hearing. Increasing numbers of cases filed in the court system today are being ordered to mediation, and more attorneys are submitting disputes to private mediators.
In fact, 98 percent of all lawsuits in Southern California courts are now settled before trial.
Be ready for the day when you get that call by being well prepared.
Eleanor Southers is a mediator based in Los Angeles. She can be reached at firstname.lastname@example.org.
Entrepreneur's Notebook is a regular column contributed by EC2, The Annenberg Incubator Project, a center for multimedia and electronic communications at the University of Southern California. Contact James Klein at (213) 743-1759 with feedback and topic suggestions.
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