Mediation often easier than lawsuit
By Marcus Green
Gannett News Service
LOUISVILLE, Ky. — When small-business owners feel wronged, their first instinct may be to sue.
But beware, warns Tony Belak, executive director of the International Center for Dispute Resolution & Leadership at Sullivan University in Louisville.
"Only 4 percent of the cases that are filed in court actually go to trial," he said. "So ... why do you want to get involved in the litigation if you're going to settle your case anyway?"
Doug Conley went with his instinct when his Louisville company, Shamrock Marketing Inc., sued Robbins LLC of Tuscumbia, Ala., in 1998. Conley sought damages for lost business and customers because of alleged false advertising.
But as the legal proceedings dragged on, both sides decided to work out a settlement without a jury.
Shamrock Marketing, which does finished manufacturing of rubber products for the tire industry, worked out the differences privately with Robbins before a third-party mediator.
As a result, Conley said, Shamrock was awarded between $200,000 and $300,000. That suited him just fine.
"Dealing with the courts system, the civil justice system in this country ... is just a very tedious, difficult, expensive — very expensive — undertaking," Conley said.
The mediation trend has gained speed in part because the parties can save time and money by not going to court. Many business contracts stipulate that mediation must be the preferred form of resolving disagreements.
A mediator primarily listens and restates the positions of both sides. Any decision that emerges from mediation must be agreed to by the involved parties. Unlike a court-appointed arbitrator or jury, a mediator doesn't choose which side is correct and then award damages.
"It's speedy and, nationally, about 80 percent of cases that go to mediation resolve satisfactorily," Belak said.
Jim Gravitt, a certified public accountant with Crowe Chizek & Co. LLP, said business owners should remember that mediation is, at heart, about two sides reaching an acceptable solution. "By its very nature you've got to compromise."
Companies choose mediation for several reasons:
• The proceedings remain private. In a court case, documents become public record — and can be viewed by anyone, including a competitor.
• Mediation can save time and money — and emotional stress. While there are no time limits, some sessions can take as little as several days.
According to the International Center for Dispute Resolution at Sullivan University, three hours of mediation could cost $600 in mediator's fees — about as much as a single deposition in a lawsuit.
• Mediation can maintain business relationships, especially in a small community.
• Mediation can salvage business reputations. "In a small-business setting, that is important," Belak said. "If you get a reputation of being litigious, other people may not want to deal with you."
