As the new year begins, it is a great time to take a look at legal disputes with a fresh perspective. Filing a lawsuit creates a mountain for businesses to climb. Once suit is filed, all parties instantly face a barrage of case management deadlines, discovery obligations, and increased attorneys fees and expenses. And, yet, when cases get to mediation, it is not uncommon for a business owner to say: “we could have worked this out!” Seeing this theme in several recent cases caused me to reflect on the benefits of pre-suit mediation, when appropriate.
Pre-suit mediation is a collaborative process where parties can focus on creating solutions in a confidential setting. For parties with longstanding business relationships, it is a key tool to preserving ongoing business opportunities moving forward. Some of the most successful mediations come in the pre-suit context, were the parties can intentionally create new opportunities for one another rather than become entrenched in an expensive and protracted legal battle.
There are many benefits to pre-suit mediation:
Resolving a case prior to filing can be far less expensive than going to trial. This is true not only in dollars for attorneys fees and expert witnesses, but also time of executives and employees who will need to divert attention to litigation efforts. No executives want to spend time, money, and resources on prosecuting or defending lawsuits. They want to focus on business. Early mediation can save millions of dollars and thousands of hours for the companies involved.
In business, time is money. It is not uncommon for a civil dispute to take two years to get to trial in state or federal court. Businesses often benefit from a much quicker resolution with pre-suit mediation, which can be scheduled as quickly as weeks after a dispute arises.
Business people want business solutions. Pre-suit mediation allows the parties to come up with creative solutions that work for their business, whereas courts are limited to providing legal remedies. With mediation, parties have the flexibility to craft agreements that meet their specific needs and interests — often resulting in businesses creating opportunities that they could not have achieved in a court of law.
Preservation of Relationships.
Rarely do ongoing business relationships survive after a case goes to trial. Resolving cases before a lawsuit is filed can go a long way towards repairing and preserving relationships between parties and create win-win solutions.
Filing a lawsuit necessarily throws parties into the public record. Often, businesses can face consequential fall-out from public relations, governmental compliance, and lost competitive advantage from business information finding itself in the public record. Mediation is confidential — protecting sensitive information from disclosure.
Now is a good time to reflect on your current disputes that might benefit from pre-suit mediation. What other benefits have you seen from resolving a dispute prior to filing suit rather than climbing the mountain of litigation?