If you find yourself involved in a dispute, mediation is a potential alternative to litigation. Instead of going through a court case, the two parties meet with a neutral third party to seek a resolution. The goal is often to reach a compromise or a mutually acceptable solution, while the mediator helps you explore your legal options, discuss the situation and understand the impact of relevant laws and regulations.
One of the advantages of mediation is that it allows you to retain more control over the outcome. In litigation, a judge ultimately makes the ruling, and a court order determines the outcome. This process takes all control out of your hands, leaving you to hope the court rules in a way you find fair and just. With mediation, however, you remain actively involved in shaping the resolution.
Business partner disputes
For example, imagine you and your business partner are involved in a dispute. They want to exit the company and are demanding that you buy out their ownership share. You believe that removing such a large amount of capital from the business would cause it to fail, forcing you to declare bankruptcy. As a result, you’re hesitant to buy them out.
In litigation, a judge might issue an order that leaves you with no options. For instance, they could require you to sell the business to a third party so that the proceeds can be divided.
In mediation, however, you might be able to find a workable compromise. For example, you could set up a payment plan to gradually transfer the owed amount to your former business partner over the next several years. You could conduct a business valuation now to determine how much they are entitled to, ensuring they eventually receive the full value – without forcing you to bankrupt or sell the business.
This is just one example, but it demonstrates why staying in control of the outcome is so important. Be sure to carefully consider your legal options when deciding how to proceed.