Negotiation, Litigation, or Mediation: Which One Fits Our Needs?

Disputes are almost inevitable in any business. Some arise from agreements or contracts you have with other persons or businesses, while others arise internally between partners or between owners and employees.

One or both parties to a dispute may consider a lawsuit the best route to resolve matters. The first step, however, is generally negotiation between the parties. If that leads nowhere, then mediation might ensue, and if that doesn’t work, litigation can be considered.

Which method is best and when? Negotiation and mediation tend to save both time and money over the ultimate form of dispute resolution, which is to take the matter to court. They both are conducted privately as well, out of the public view.

If you’re involved in a business dispute anywhere in the San Francisco Bay Area, contact the Law Offices of David H. Schwartz, INC. Attorney David Schwartz has more than 45 years of experience in handling disputes and fostering dispute resolution. He will meet with you, hear your story, and advise you of possible courses of action.

If you’re facing a lawsuit or thinking of initiating one, he can help you explore your options and represent you vigorously if matters do end up in court.

Alternative Dispute Resolution (ADR) Defined

Negotiation and mediation are both forms of what is called alternative dispute resolution (ADR). Negotiation is the least formal and costly. Mediation involves the introduction of a third party to listen to both sides and try to get them to reach an agreement.

Negotiation

Negotiation involves the two parties to the dispute sitting down and trying to hash out a solution or agreement on their own. There are generally thought to be five styles of negotiation leading to five different levels of resolution:

ACCOMMODATING: This is a case of “I lose/you win.” You concede in order to save the relationship because you feel you’re mostly at fault or have a weak case to make.

AVOIDING: “I lose/you lose.” This applies only if the matter is trivial or when the value of resolving the conflict outweighs the benefit.

COLLABORATING: “I win/you win.” This should be the goal and focus of most negotiations, coming to a mutually agreeable and beneficial resolution.

COMPETING: “I win/you lose.” This style can be employed when the relationship isn’t that critical to your business.

COMPROMISING: “I lose/win some, and you lose/win some.” This style may be the quickest route to a resolution.

Negotiation is certainly the least costly of all methods of resolving a dispute, but it is not always successful. One or both parties may dig in their heels. Like mediation, however, negotiation stays off the public record, unlike a court case.

Mediation

Mediation is negotiation carried to the next level when a third party works with the disputants on an agreement and resolution. Through the use of a third party neutral who talks to each side privately, the posturing of the strength of each side's case that frequently infects disputes in their early stages can be reduced, permitting the neutral to potentially find areas of agreement that can lead to a settlement. 

Though mediation is often viewed as an informal process, mediation frequently involves distinct stages that may include the following:

MEDIATOR’S OPENING STATEMENT: The mediator gathers everyone and explains the goals and rules to be followed.

DISPUTANTS’ OPENING STATEMENTS: Each party presents its side of the story.

JOINT DISCUSSION: After the disputants’ opening statements, the mediator may encourage the parties to respond.

PRIVATE CAUCUSES: This is when the mediator meets separately with each side of the dispute. This is perhaps the most crucial step in the process.

JOINT NEGOTIATION: The mediator may decide to resume joint negotiations, although this step is not employed that often.

CLOSURE: If the parties agree on a resolution, the mediator may put it in writing and ask each side to sign it. If there is no agreement, the mediator may suggest meeting again, either in person or by phone.

Mediation has the benefit of being the least costly method other than the disputants negotiating. However, it doesn’t always lead to a mutually agreeable resolution, leaving the parties facing either more mediation or considering a laws

Mediation at the outset of a dispute may be productive if both sides likely think settling would be preferable to the expense and stress of litigation. However, where one or both sides believes they have a very strong case, mediation may be more effective after litigation has been commenced and each, side has had an opportunity to see some of the evidence -- that may change expectations as the discovery process reveals evidence that favors one side or the lack of evidence for a side to support their position.  

If the parties agree, they can make informal information exchanges a part of the mediation process before litigation is commenced.  This requires that the parties trust each other to be reasonably open about producing evidence/information about the case.  Litigation legally compels disclosure of evidence by each side, whether favorable or unfavorable. Such compulsion is not available in mediation. 

Beyond ADR: Litigation

Going to court is, of course, the costliest of all the options and should probably be the last resort. Even when the two parties end up in litigation, somewhere along the way, a settlement is often reached. It’s probably better to try to reach a settlement before the costs of taking everything before a judge starts running up the tab.

Court cases can also take months and even years just to be heard and concluded. Your appearances in court can also take you away from running your business on a daily basis, but if it’s the only way to reach a conclusion, it may be necessary.

How Skilled Advocacy Can Help

Before you make a hasty decision and decide that suing the other party is the best course of action, you need to consult with an experienced business dispute and litigation attorney to assess your situation and options.

If you’re involved in a dispute in or around San Francisco, including nearby Oakland, San Jose, Santa Clara, or San Mateo, or throughout Alameda County, contact the Law Offices of David H. Schwartz, INC. Attorney David Schwartz will analyze the situation, propose the best option for resolution, and then help you as you move forward in negotiation, mediation, or litigation.


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