Îwners and managers of large businesses are extremely sensitive to the high costs of litigation—not only in money paid for legal fees, but also in executive time, damage to customer relationships, and potential harm to their public image.

This is why many large companies are turning to mediation to resolve disputes.

Smaller businesses have been somewhat slower to embrace media­tion, but this seems to be a result of lack of awareness of the potential advantages of mediation rather than a deliberate business strategy.

Unlike mediating a simple neighborhood squabble or a straightfor­ward damage claim against an insurance company, mediating a business dispute usually takes considerable time and energy. For example, a mediation between two partners about the division of a $3 million business might take a week of daily sessions. The partners might need to invite financial experts to help create and refine various buyout sce­narios. And even when everything is supposedly settled, the final agreement will have to be drafted painstakingly, to account for all of the important details.

Here are some of the advantages mediation offers to the business

owner:

• Control of the outcome. The terms of settlement, if any, will be decided by the parties, not imposed by a judge, jury, or arbitrator. This greatly reduces anxiety, especially when the dispute is large enough to threaten the solvency of the business or its owners.

• Control of the process. The parties will select the mediator and decide which issues will be addressed, when sessions will be scheduled, and how fees will be apportioned. In short, the process of mediation is far more defined and predictable than the free-for-all of court proceedings.

• Ability to accommodate multiple parties. Business disputes often involve three, four, or even more parties. For example, even a relatively simple mediation over the construction of a small retail store might involve not only the store owner and general contractor, but also an architect, a soils engineer, and several subcontractors.

• Savings on legal fees. In mediation, lawyers are usually used only in a consultative role, with executives normally participating directly in the mediation. In a lawsuit, lawyers take over all of the important decisions—and run up tremendous legal fees in the process.

• Savings on expert fees. Instead of paying a high-priced expert to explain technical issues to the judge and jury, the knowledgeable parties can handle those discussions in mediation. Using a mediator who has expertise in the technical subject matter can be a big benefit, too.

• Time savings. Mediation can be scheduled and likely concluded as quickly as the parties need.

• No unwanted publicity. Mediation avoids public exposure of business mistakes, internal problems, and trade secrets. This is no small matter. For all sorts of sensitive issues, a prominent local or national company has a huge interest in preserving its reputation and good­will, and not becoming media fodder.

• Preserving important relationships. Nonadversarial mediation can allow the relationship between disputing businesses to outlast the dispute. The very process of arriving at a consensus decision can be the foundation for the parties to continue to do business together. By contrast, going to court destroys relationships almost every time. Many businesses are also realizing the value of using mediation as part of an overall strategy to build and keep good customer relationships.

Against this positive background, this chapter is designed to help business owners and managers successfully mediate disputes that arise out of the ownership and operation of their businesses. In so doing, it deals with several important considerations not generally a part of other types of mediation, such as:

• where to look for and how to find a business mediator

• which types of business disputes are typically mediated, and

• how to get the other company to agree to mediate.

Read this chapter along with the rest of the book. This chapter does not repeat the essential information covered in Chapters 1 through 9.

Instead, it covers only the special issues that are most likely to come up in mediating small business disputes. To get the full picture, read the first nine chapters of the book before you get into this material.

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