MEMBER NOTES
MEMBER NOTES
Mediation Offers Alternative for Business Dispute Resolution
By Margie Echevarria Executive Vice President of NJ Association of Professional Mediators
Access any business report in New Jersey and you will confirm that an engine for productivity , the sale of goods and employment in the state is small business . Small business is defined as any firm with 500 or less employees . According to the SBA ’ s 2022 report , the small business profile for New Jersey in the past two years ( 2021 & 2022 ) confirm that 99.6 % of New Jersey businesses are small business . Their reports establish that this engine is diverse consisting of businesses owned by women , men , blacks , Hispanics , and veterans that employ almost half of the population of the state . In 2022 , small business accounted for $ 15 billion in loans from banks . From Professional , Scientific , and Technical services to Construction , Retail Trade and Health Care sectors , many of the top small businesses in the state employ from 20 to 499 employees .
One of the potential lags on this productivity is litigation . At any point in the productive life of a small business , litigation involving a product , an employment situation , or a consumer conflict can arise . It is a generally accepted fact that litigation can be costly not just limited to legal fees related to the time parties take to be “ trial ready ”, but also due to the potential loss of reputation related to publicity of the dispute , the distraction which results in loss of business management time while engaged in court proceedings , and finally , the loss of business relationships depending on how caustic the dispute becomes .
Businesses can insulate themselves from these potentially expensive “ drawbacks ,” that is the publicity , distraction , and cost of legal disputes , by planning ahead and ensuring that their employment agreements , B2B , and even terms of service agreements with their consumers include arbitration , mediation clauses or both . Often Alternative Dispute Resolution provisions in commercial contracts involve these clauses or adopt a two-step process – first mediation , and if that process doesn ’ t end in resolution-then , final binding arbitration . As noted by the American Arbitration Association , providers can handle the administrative processes like the filing of a claim , the identification of the ADR professional for your selection , and the process to final disposition .
The speed , efficiency , confidentiality , cost effectiveness and finality offered by these alternatives to litigation have become a normal facet of doing business today . You may already have legal counsel that helped you set up your business that can be tapped to assist you in adopting the appropriate clause for your contracts and , or invoices . You can review in advance sample clauses on service provider websites so you can have an informed conversation with your legal counsel . Alternatively , you can choose to “ do it yourself ” and use services such as “ Clausebuilder ” offered by the American Arbitration Association which provides clear and effective arbitration and mediation agreement forms .
If a business decides to pursue legal action against another party or becomes a party to legal action , the business owner can use mediation to resolve their civil matter regarding debt collection , employment , breach of contract , personal injury , and other areas . In many NJ counties , cases have been aging from one to over two
“… 99.6 % of New Jersey businesses are small business … consisting of businesses owned by women , men , blacks , Hispanics , and veterans that employ almost half of the population of the state .” years in the courts . Mediation can be scheduled before or after a formal legal complaint is filed to attempt a settlement outside the courts in a less costly , less adversarial , and more timely manner . Parties can :
◾ Schedule dispute resolution taking only into consideration the calendars of the parties involved and the mediator in setting a mediation date . ( Avoiding court calendar delays ).
◾ Gain greater control of their costs
◾ Finalize resolution with an enforceable agreement between the parties as required by NJ law . ( Reference Willingboro Mall Ltd . V . 240 / 242 Franklin Avenue LLC . 215 NJ 242 ( 2013 )
A mediator does not take sides but works with the parties to reach an amicable solution . While cases litigated in court are settled in accordance with the law , mediation allows for more flexible solutions . Each party can choose to include their legal counsel , third party experts and relevant participants in the sessions . All discussions and
Margie Echevarria , Executive Vice President of NJ Association of Professional Mediators
information shared within mediation remain confidential . Terms of Agreement can be developed , outlining agreed-upon conditions in the resolution of a dispute , and can be enforced in the courts , if needed . If the parties cannot agree to a solution , the legal system is still an option .
By anticipating through Mediation how you will manage the inevitable disputes that will arise in the conduct of your business , you will be able to
◾ Select a professional Mediator with the experience and expertise to assist in the resolution of your dispute .
◾ Engage in a Confidential process that avoids unwanted publicity for your business .
◾ Avoid the filing of legal documents to initiate resolution of your dispute that are public records .
An important resource available to businesses is the NJ Association of Professional Mediators . For the past 30 years , NJAPM has been the voice of the public to the NJ Judiciary and our legislative representatives on ways to improve the delivery of mediation services to NJ residents . NJAPM can acquaint businesses with advice on how to plan for inevitable disputes and advise on the benefits of mediation , how to protect yourself by adopting ADR provisions in your contracts and provide you with a directory of professional mediators ( www . NJAPM . org ).
20 COMMERCE www . commercemagnj . com