Mediation: Because Litigation Isn’t Always the Right Answer

The majority of American citizens don’t know the pride and satisfaction that comes with operating a business. Being able to offer a product or service – and offer it well – is a feeling that can’t be matched. However, there are times when disputes will arise. This makes it critical for entrepreneurs to understand the legal framework of business mediation in Phoenix.

Mediation is a form of alternative dispute resolution (ADR) that aims to keep disagreements out of the courtroom. Rather than the adversarial approach of litigation, parties work with a neutral third-party mediator to reach a mutually agreeable solution. Mediators facilitate negotiation and discussion, but they do not impose a decision.

This process is often faster and cheaper than litigation, and it allows parties to maintain more control over an eventual decision. However, it’s important that you know what to expect.

How Arizona Treats Mediation

Mediation is an ADR option used worldwide with rules and nuances. For instance, before or after litigation ensues, mediation is recognized under Arizona Revised Statutes (A.R.S.) § 12-2238. Arizona law recognizes confidentiality in meditation.

If mediation doesn’t work out, nothing that comes out during the proceedings can generally be used as evidence in court, unless an exception applies. Confidentiality exceptions include: 1) the parties agree to disclosure; 2) the communication, material or act is relevant to a claim by a party against the mediator; 3) disclosure is required by statute; 4) disclosure is necessary to enforce an agreement to mediate; or 5) the disclosure is made in a report to a law enforcement officer, the department of child safety or adult protective services by a court appointed mediator who reasonably believes a minor or vulnerable adult is or has been a victim of abuse, etc.

Common Types of Business Disputes Heard in Mediation

The legal framework of business mediation in Phoenix makes the process useful in various business disputes. Keep in mind that the goal of mediation is dispute resolution. This means compromise will often be necessary; and in examining the most commonly mediated disputes, it’s easy to see how a middle ground is often reachable, considering: 

  • Contract disputes 
  • Partnership and shareholder disputes 
  • Employment issues (e.g., wrongful termination claims, wage disputes, etc.) 
  • Intellectual property disputes (e.g., trademark infringement, trade secret theft, etc.)

While these might be the most common cases handled through business mediation in Phoenix, this list is far from exhaustive. If you’re caught up in any disagreement with business partners, customers, employees, vendors, or other parties – it doesn’t hurt to consider mediation as an option. Don’t hesitate to contact a legal professional to better understand your rights. 

What’s the Role of the Mediator?

To fully understand the legal framework of business mediation in Phoenix, it’s necessary to recognize the mediator’s role during the process. As a neutral third party, they do not take sides in business disagreements. They’re merely present to ensure the discussions stay on point and to create an environment conducive to agreeable outcomes.

As mentioned, mediators do not issue rulings themselves — and it’s not their job to impose a decision. However, these professionals typically specialize in certain areas of the law. For instance, a business litigation attorney may act as a mediator for business disputes. Their knowledge will help them better guide the discussions and explain relevant laws to the parties.

The Mediation Process

The legal framework of business mediation in Phoenix extends far beyond two parties sitting down for a discussion with a mediator. There’s an extensive process involved, and it starts long before anyone comes to the table to reach an agreement. If you’re opting for mediation or there’s a mediation clause in your contract, the following steps are essential: 

  • Initiating mediation: Mediation can be a voluntary decision or ordered by the courts 
  • Pre-mediation preparation: Prior to sitting down for mediation, both parties need to identify their goals, gather relevant documents, and clarify what they’re willing to compromise on 
  • The mediation session: Mediation usually starts with the mediator sitting down to explain the process and allow both parties to present their case. Individual sessions may be held afterwards 
  • Resolution or impasse: If an agreement is reached between the parties, a mediator can formalize the agreement. If mediation fails, the parties can opt for arbitration or litigation

In a perfect world, mediation would be as simple as two people sitting down and reaching an agreement. Of course, this would simply be known as negotiation – and if that process were so simple, there would be little need for mediators. Unfortunately, this isn’t the world we live in. However, mediation doesn’t have to be a complex process when you have the right legal help.

Do You Need an Attorney for Mediation?

If you find yourself in a business dispute – ranging from a partner disagreement to a breach of contract – it’s typically advisable to have an attorney. This is usually the case for arbitration and litigation, as well as mediation. Even though the entire point of mediation is for parties to work together to reach a solution, one may still ask whether it is necessary to hire an attorney?

The answer to this question can vary based on individual circumstances, but in all cases, it’s a good idea to at least consult with a legal professional. Even if a lawyer doesn’t represent you during the mediation process, they can help you better understand your rights and what to expect before you sit down with the opposing party and mediator.

It’s also not a bad idea to hire an attorney as the necessary neutral third party. With their in-depth legal knowledge, a lawyer can help both parties understand their rights and the legal framework of business mediation in Phoenix. At Resolvere Law, we’re here to help however we can. Contact us at 480-568-1327 and ask for a FREE consultation.