MEMBER NOTES
MEMBER NOTES
Advanced Planning Helps Small Businesses Manage Disputes
By Margarita Echevarria, Esq., Independent Arbitrator & Mediator
Access any business report in New Jersey and you will confirm that small business is the engine for productivity, the sale of goods, and employment in the state.
Small business is defined as any firm with 500 or less employees. The Small Business Administration’ s small business profile for New Jersey from 2021 and 2022 confirms that 99.6 % of New Jersey businesses are small business 1. Their reports indicate that these businesses, with a diverse ownership representation of women, men, blacks, Hispanics, and veterans, cover many sectors from Professional, Scientific and Technical services to Construction, Retail Trade and Health Care. These enterprises employ almost half of the population of the state( 49.2-49.5 %), many of which have between 20 to 499 employees. In 2022, small business accounted for $ 15 billion in loans from New Jersey banks.
Disputes related to retail, construction and commercial transactions often arise in business. One can reasonably conclude a certain percentage of businesses are engaged in costly litigation related to disputes ranging from employment claims, B2B disputes or consumer claims regarding services and product claims. Litigation can be expensive, not just with respect to legal fees or the time for the parties to prepare for trial, but also because of loss of reputation due to associated negative publicity 2, loss of time dedicated to court proceedings, and loss of business relationships if a dispute becomes caustic.
Businesses can insulate themselves from these potentially expensive“ drags” by advanced planning to ensure that their employment agreements, B2B, and even terms of service agreements with their consumers include arbitration or mediation clauses or both. Often, Alternative Dispute Resolution provisions in commercial contracts involve a two-step process, i. e. first mediation and then final binding arbitration. Service providers like the American Arbitration Association( AAA) or JAMS often handle the administrative processes once a claim is filed, such as tracking required deposits, assigning of the ADR professional( by offering a selection list) and ensuring a final disposition is reported. The speed, efficiency, confidentiality, cost effectiveness and finality offered by these alternatives to litigation have become a
The Small Business Administration’ s small business profile for New Jersey from 2021 and 2022 confirms that 99.6 % of New Jersey businesses are small business
normal facet of doing business today. You may already have a legal representative that helped set up your business, who you can tap to draft the appropriate clause( s) in your contracts, and which you can peruse in advance to have an effective conversation with your representative. For example, the AAA offers ClauseBuilder on their website at no cost.
An important resource to business within the state is the NJ Association of Professional Mediators. NJAPM has for over thirty years given qualifying training for new entrants into both Civil and Divorce mediation practice, provided NJ mediators support to maintain their NJ court roster qualification, and served as the voice of the mediator community to the NJ Judiciary and our legislative representatives. NJAPM is also a member of the Commerce and Industry Association of NJ and stands ready to provide webinars and other educational programs to acquaint CIANJ members with advice on how to plan for the inevitable disputes that arise in business. NJAPM can advise on the benefits of mediation, how to protect yourself by adopting ADR provisions in your contracts and provide, through its website( NJAPM. org), a directory of professional mediators all of whom have met the rigorous credential qualifications of the state to become not only court approved mediators but also who annually retain that status through required continuing education.
In addition, NJAPM collaborates with national and intrastate organizations to promote the benefits of mediation, the increase of diverse mediators through its grant program, and to collaborate with in-state educational institutions to demonstrate how mediation tools can enhance the delivery of services within
Margie Echevarria is an Independent Arbitrator and Mediator in private practice with a focus on Insurance, Business, Securities and Real Property disputes. You can reach her at margarita @ echevarriaadr. com and www. echevarriaadr. com.
their organizations. NJAPM feels strongly that conflict resolution in our businesses, organizations and communities is more effectively mitigated through mediation. We are pleased to have the opportunity through CIANJ membership to share the years of experience, expertise and knowledge of our members with CIANJ members.
As businesspeople ourselves, we understand that developing and maintaining a business requires a lot of planning to ensure that our product or service meets a public need. We try to anticipate as much as possible what is required to sustain a healthy and prosperous business. Anticipating what you will do to confront and manage inevitable disputes should be part of that planning: utilizing speedy, cost effective and confidential services when disputes arise is highly beneficial. We invite our fellow CIANJ members to add a mediation discussion to your meeting agendas and invite you to check out our website at www. NJAPM. org.
1 2022 Small Business Profile published by U. S. Small Business Administration, Office of Advocacy using Statistics of US Businesses( Census) 2 Publicity can come in various ways-local newspaper coverage, court records are public, as are complaints reported to the NJ Better Business Bureau.
22 COMMERCE www. commercemagazinenj. com