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Mediation for small business Cheaper and faster than the courts By Alvin M Hattal
(Published in My Business e-zine/magazine)
Want to resolve a business dispute without going to court? More and more small businesses are turning to mediation. It’s cheaper and faster—often within days--than litigation, and usually leads to a settlement all parties find reasonable. You can even settle some cases on the Internet, without having to meet with your adversary again.
Most mediated disputes are resolved by experts trained to negotiate every type of dispute, including many encountered by small businesses. Although some disagreements still wind up in arbitration, mediation is growing more popular among adversaries who prefer to reach their own solutions to their problems.
In one typical situation, Mary Kay Lefevour, a Takoma Park, MD, mediator, helped a travel agent come to terms with the agent she hired to try to sell her business. She had paid him half the promised $25,000 fee, but though their contract had no provision for not paying him the full amount of his fee, she balked at paying the remainder when he failed to find a buyer. Lefevour was able to quell the emotions on both sides and persuade each party to abandon their initial stonewalling and make an offer that was grudgingly accepted by both.
Some disagreements are even settled online, right on the Internet through a series of offers and counter-offers. If the case settles for less than $10,000, it bills each party $100; $200 if more than $10,000. “A typical case settled electronically,” says ClickNSettle.com President Roy Israel “is about $25,000, with a maximum window of time of 60 days.” The company charges $15 to submit a case plus about $50 to negotiate it.
Settleonline.com, a division of Chicago-based Resolute Systems, handles personal-injury and employment disputes, primarily, as well as commercial, construction, contract, and professional malpractice disputes. The company has affiliations with about 1,500 attorney and former-judge mediators nationwide, according to Mike Weinzierl, its senior consultant. Filing a case is free. Total cost if the case settles is $75-$250.
Cybersettle.com, an arm of National Arbitration & Mediation, says it has developed software that provides access to what it claims is a secure online settlement tool that helps negotiate insurance claims with a blind-bid system than can take only minutes to resolve.
Method is growing fast
The traffic in electronic peacekeeping has grown so rapidly in recent months that both the Federal Trade Commission and Commerce Department have overseen the effort to create a blueprint for this approach to mediation.
“But mediation is about building relationships and agreements that truly meet underlying needs,” says C. Richard Barnes, who heads the Federal Mediation and Conciliation Service, the agency that helps to resolve many of industry’s most complex disputes, such as the recent Seattle Times strike. “They generally require face-to-face meetings conducted by mediators trained in alternative dispute resolution,” Barnes told NFIB. “In a negotiated settlement,” he explains, “the mediator will use more ‘tools’ to advise and move the disputants to an agreement.”
By contrast, small business disputes are much smaller than FMCS’s billion-dollar cases. But all employ the same basic principles.
Mediators agree that negotiations start with a clear understanding and agreement of terms and conditions by each party. Toward that end, the American Arbitration Association, which has a B2B dispute-resolution branch, has developed guidelines for all business. As the trend grows, small businesses can increasingly avoid the need for costly, time-consuming litigation and truly achieve more win-win results. RETURN TO INDEX (on the home page)
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