Mediate Before You Litigate!

Four reasons to mediate before litigating

presented in four parts

 

Reason #1: Frequently, the legal issue that might be the basis of litigation isn’t really the core issue of the dispute between the parties.

Bob and Frank have been doing business together on a “handshake” for 20 years with no problems. Each trusts and respects the other. Recently, Bob’s son-in-law Joe joined the business and convinced Bob that Bob should have written contracts for all business transactions. Frank’s services are required and Joe insists on a written contract. Frank is insulted by this and feels that Bob no longer trusts and respects him.

Bob’s accountant fails to make a contractually scheduled payment to Frank. Bob is unaware of the missed payment. Frank is now doubly insulted that Bob is in violation of his own contract! Frank refuses to call Bob and beg for his money so Frank files a court claim against Bob for breach of contract.

The legal issue is breach of contract. Bob is clearly in breach and Frank will likely win his case. However, Frank must first hire a lawyer and spend months waiting for a trial on his legal issue. Bob has also hired a lawyer and is so upset that Frank never called about the missed payment, he refuses to settle. At trial Frank “wins” but he and Bob never do business together again.

If Bob and Frank had mediated before they litigated, each may have recognized the core issues which were Frank’s perceived lack of trust and respect by Bob and Bob’s anger at Frank for not addressing the missed payment. In the neutral mediation setting, Bob and Frank could have discussed and potentially resolved these issues without the expense of attorneys and still maintained the business relationship.

In the next installment: Reason #2: Mediation has the potential to resolve the issue in one to two sessions while many lawsuits take months or years to resolve.

If you have any questions about mediation as an alternative to litigation please contact Nichole Waltz (847)253-8800.