Mediation For Small Business Disputes

From Erica Becks’ Cure for the Common Conflict.

Frequently, a SBO (Small Business Owner) approaches me with a question about a debt collection or contract dispute. In cases where there is significant financial and/or legal considerations, I refer them to attorneys. However, many of these small business owners and entrepreneurs simply do not have the capital to retain an attorney. So what are their other options?

1. Take their concerns to Small Claims Court, an action which I strongly discourage (please see my previous post about “Small Claims Court”)
2. Attempt to resolve the issue on their own.
3. Avoid the dispute entirely, in hopes that it will resolve itself.
4. Purchase a pre-paid legal plan, which provides a limited amount of services like telephone consultation and letter writing. And as you might imagine, writing someone a letter on ‘legal letterhead’ doesn’t usually intimidate someone enough to settle a dispute. Such ‘letters’ often infuriate the opposing party and go unanswered. If these letters do not produce a desired resolution to the dispute, the business owner will usually end up retaining an attorney anyway, who will, after months of careful review, advise them to go to mediation.

As you may have already garnered from previous posts, mediation is the most cost effective, empirically proven method for resolving a dispute, of any kind. It is simply unnecessary in most, but not all cases, to litigate a commercial dispute (especially disputes which are valued less than $25,000, often called ‘limited jurisdiction’ cases). Much like divorce, the cost of attorney fees, generally overshadow the potential financial compensation involved. So, if you are a business owner with a minor bone to pick, call a mediator first. They will not only save you money, but also time you would have spent away from your business trying to resolve your dispute. And as a fellow business owner myself, I know that time is definitely money. So, why not keep yours?


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