Suzanne Lowe, a solicitor and mediator explains why mediation should be an essential part of your business strategy for keeping you in business.
Running a successful business is, as we all know, not just about selling your goods and/or services. The profitability of your business will depend on a loyal and dedicated task force; managing issues that arise within the business and good relations with customers and suppliers. All of these elements contribute to building a healthy business with a good reputation.
So what do you do if a dispute arises? It might be between employees or employer and employee. What do you do if there is a dispute with one of your customers or suppliers, which not only means that you won’t get paid, but threatens an on going valuable business relationship?
If negotiations break down, you might think about getting legal advice to find out about your rights. But, will litigation really give you the solution you need and even if it does, at what cost?
I am a litigation solicitor. I will be happy to charge you £160 per hour and advise you of your rights and the strengths and weaknesses in your case. I’ll negotiate on your behalf. If do so successfully and relatively quickly it’s likely to cost you in the region of £1000, which you won’t recover. If that doesn’t work and you have to issue proceedings, I’ll advise you that the estimate for costs to go to trial for a judge to decide will be a minimum cost to your business of £5000. That could be over a dispute worth only around £3000. You might not get your costs back even if you are successful. I might not be willing to take the case on a “no win no fee” basis. It could take about 18 months to find out who is right or wrong
What are you going to do? Can you afford the risks of losing? What if there is no legal solution? For example if you have two employees that fall out creating bad feeling, and it isn’t a situation where you can impose sanctions and ultimately dismiss anyone?
In business where commercial deadlines have to be met and decisions made swiftly you don’t have the luxury of time to be in dispute, you need a quick, efficient and cost effective way of resolving issues. You need there to be the minimum amount of disruption to the business and to preserve your hard earned reputation and business relations
So what is the answer? The answer is don’t litigate – mediate! If you don’t know about it, you should! It should be an essential part of your toolkit for managing your business.
I was recently involved in an employment tribunal hearing, where my client claimed that she had been constructively dismissed. I.e. she had been forced to leave her job because of the way she was treated by her employers. She was essentially claiming that the staff had ganged up on her and that the human resources team didn’t deal take her complaints seriously.
In mediation, the parties nominate a neutral third party. The mediator doesn’t take sides, express an opinion or impose a solution upon the parties. Everything said at the mediation remains confidential. The mediator helps the parties look at the bigger picture and moves then away from their entrenched positions to look forward and identify what they really want to achieve. What’s more the parties stay in control and decide for themselves how to compromise. There is no judge telling them who is right and wrong.
I recently mediated in a partnership dispute. The out going partner wanted payment of his capital account. The remaining four partners said they owed him nothing because they didn’t believe he had been pulling his weight in the partnership and they had been carrying him. In the private sessions with the outgoing partner he told the mediator that he had been preoccupied and not doing as much as he should, because his marriage was in difficulty. But he had known his partners for many years and he had, in the past, been the most profitable partner in the firm. He felt very aggrieved that they were being so insensitive now.
The remaining partners, in their private sessions with the mediator, acknowledged that this partner had played a significant part in the building of the business. But they had lost patience with his current domestic affairs because he just couldn’t be relied upon, when the business now needed all hands on deck to grow.
Neither party would have been able to tell a judge what was behind their stand point. The judge is not there to hear about the personal views of parties, just the facts and how the law can be applied.
The parties settled the case by compromising with the outgoing partner taking a third less of his capital account. In recognition of his services and the value of his name being associated with the on going business, even with his domestic problems the remaining partners agreed to give him a 2 year service contract. The partnership agreement said no retiring partner should ever be retained on a service contract, once they left. But they agreed to vary the terms.
No judge would have had the power to come up with this solution. Through mediation the parties were allowed the freedom of deciding what they wanted and how best to achieve this. They were free to renegotiate the original agreement to suit themselves.
The parties referred the dispute to mediation at an early stage. They had been given legal advice and negotiations had broken down. They had incurred legal costs of around £1,500 on each side. No court proceedings had been issued. The mediation took a day. Had they used the court route, the solicitors for the parties estimated that their costs to trial would have been in the region of £20,000. It would have taken about 18 months to get to trial. The mediation cost the parties £750 each.
In a workplace mediation, I mediated between two work colleagues who had fallen out over 2 years before. The situation had got to the stage where they refused to work together at all. They were valuable members in the business, but productivity was being affected. Once they had the opportunity in a neutral environment to explain their perception of the fall out, they were able to come to terms with each other; accept their differences and agree how to rebuild mutual respect and understanding working together.
Mediation can be used in many different types of dispute that may arise in business. Mediation gives you the opportunity to take control. If you want your business to survive and grow - use it!
Talk Mediation is accredited as a mediation provider by the Civil Mediation Council and a member of the National Mediation Help Line. Talk Mediation has a panel of accredited, experienced mediators across the U.K. They have different backgrounds and disciplines including lawyers, accountants, surveyors and business people. To find out how Talk Mediation could help you contact us.