How Does the Business Mediation Process Work?

How Does the Business Mediation Process Work?

Business mediation is an effective method of alternative dispute resolution where the parties work together to reach a settlement in their case. Pre-lawsuit mediation can be  more cost-effective and efficient than years of costly and stressful litigation — and provides many benefits to business owners. Since mediation also encourages open and honest communication, it can help both sides remain amicable as they find a mutually satisfactory resolution while safeguarding their bottom lines and reputations.  Mark Western has experience with both business litigation and business mediation.   

Generally, here is how the business mediation process works: 

The Parties Agree to Mediate Their Dispute

Before business mediation can move forward, the parties to the dispute must agree to participate in the process. In many cases, there may be a contract in place that requires the parties must mediate any disputes before filing a lawsuit. Mediation often works well in cases involving the following types of business disputes: 

  • Contract disputes
  • Disagreements with business partners
  • Shareholder disputes
  • Conflicts with vendors
  • Disputes with employees  
  • Business torts 

Significantly, mediation isn’t only about saving time and money. It can also help to preserve long-term business relationships, eliminate uncertainty, and restore trust. By using mediation to resolve a dispute, the parties can find a customized solution that might not otherwise be available when a case is litigated — and a judge decides the outcome. In addition, mediation can allow the parties to resolve all the issues that are important to them, not just the underlying dispute. 

The Parties Work with a Trained Mediator

During business mediation sessions, the parties will work closely with a neutral third party called a mediator who will assist with facilitating a productive discussion. The mediator is not a judge and cannot render a formal ruling in a case — they also cannot provide legal counsel or advocate on behalf of either side. The mediator’s role is to be impartial, ensure that all sides have the opportunity to be heard, help identify the strengths and weaknesses of the case, and assist the parties with analyzing the issues. 

Critically, parties who agree to business mediation should still have a skillful business attorney by their side. While a mediator cannot offer legal advice, parties to the dispute should seek representation so they can ensure their rights are protected.   

The Mediation Process Goes Through Multiple Stages

Business mediation should be specifically tailored to the needs of the parties and the conflict they are facing. While some business disputes may take as little as one or two  mediation sessions to resolve, others can take several or more — depending on the complexity of the case. There are typically several stages to the business mediation process, including the following: 

  • The mediator makes opening comments— Business mediation typically begins by the mediator introducing themselves and explaining the rules associated with the process. This can occur in an open meeting with all parties, or with each party seperately.  
  • Each party makes opening comments— The parties to the conflict will each have the opportunity to describe the issues in the case and the impact it had on them. The opening   comments take place separately, where each party may express their opinions freely without any interruption.
  • Each party has a private caucus with the mediator — The parties will then meet with the mediator outside the presence of the other parties and the conversations are confidential. The mediator will go between both rooms to discuss the strengths and weaknesses of each side’s position and communicate settlement offers.  Each meeting is unique based upon the needs of the case and the parties.
  • The parties engage in joint negotiations — In some cases after the private caucuses, the mediator may bring the parties back together to negotiate with each other directly.
  • The mediation sessions come to a close — If the parties reach a resolution, the mediator will prepare a memorandum that incorporates the settlement terms agreed upon during the mediation sessions. In the event the case does not settle at mediation, the parties may continue to negotiate. Otherwise, the dispute may proceed through the legal process.                   

Mediators cannot force a party to accept a settlement or make decisions in the case. If mediation is successful, both sides will leave with an agreement that they find acceptable. The settlement can then be memorialized in a written agreement or turned into a binding court order. Without court involvement, the mediation agreement will be deemed an informal agreement that is not legally binding on either party.      

Contact an Experienced North Dakota Business Mediator

Mediation can have numerous benefits for business owners who are facing a dispute. A knowledgeable business attorney can best advise you whether mediation is right for your case — and work with you to protect your business and financial interests. Located in Fargo, Fremstad Law offers mediation services to businesses of all sizes in North Dakota and Minnesota for a broad scope of issues. We welcome you to contact us online or call 701-478-7620 to learn how we can assist you.