Thinking of Suing? Mediation Offers an Alternative

By Teresa Ambord

For small business owners, if legal hassles arise, the result can be devastating. It's common knowledge that legal costs (whether you are suing or defending against a lawsuit) can spiral out of control in a short time.

But suppose your established business runs into problems with a nearby business such as noise or litter or smells? For example, you own a sandwich shop that has as its main attraction outdoor tables. Then a tattoo parlor moves in next door and keeps its doors open and plays loud obnoxious music all day long. The owner feels that the music is needed to draw in young people. But you've noticed a sharp drop in your lunch clientele and your profits are disappearing. Being a reasonable person, you've tried talking to the parlor owner, but it always ends in a shouting match. You've also consulted the police, but found that, however annoying his business is, the tattoo parlor owner isn't breaking any laws. Now what?

In a large corporation, there would be a legal department to handle a situation like that. But what is the small business owner supposed to do? Going to court is costly and time consuming and, even if you win, residual hard feelings from the loser can make your work life miserable.

If the problem is something you can't live with and don't wish to sue over, a good alternative might be mediation. Mediation brings in a neutral third party who takes you both through peaceful discussions. Together you work out a compromise that, though perhaps not perfect for either of you, makes the situation one that you can deal with. And because the solution was one you agreed on, you're both more likely to stick to it, and less likely to harbor hard feelings.

How Do You Find a Mediator?

The answer is, the same way you find any other business. Look in the yellow pages under "mediator" or "conflict resolution." You may choose to hire a private mediator, also listed in the yellow pages or an attorney who lists mediation as a service. Your community center might have a low-cost civic mediation center. If you belong to the Better Business Bureau or your local chamber of commerce or some other small business association, ask them if they have or can recommend a mediator.

How Much Does Mediation Cost?

Obviously that depends on which of the above paths you choose. An attorney-mediator will cost a lot more than a community center mediator. Regardless, the total cost will be nowhere near what you'll pay to take your case to court. And chances are, it will all be over in a matter of hours, as opposed to weeks or months or longer for a lawsuit.

What is the End Result of Mediation?

If the mediation is successful, it will result in a signed agreement or at least a signed memo detailing what you and the other party have agreed to. If you do reach an agreement, you may then choose to ask a judge to make the agreement enforceable by law, just in case one party or the other decides to violate the terms.

What if You Don't Reach an Agreement?

Even if no agreement is possible, you and the other party have probably learned a lot about each other's positions. Your investment in fees and in time is much smaller than it would've been had you gone to court. But, if taking legal action seems necessary at this point, that option is still available.

To help you get through the process, here's a great book that will guide you through decisions such as choosing a mediator: Mediate, Don't Litigate, by Peter Lovenheim & Attorney Lisa Guerin.

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