Disputes are an inevitable part of running a business. Fortunately, the parties can resolve these disputes with a healthy dose of good faith, patience, and flexibility. However, mediation is not ideal for resolving all kinds of business disputes. Chances are, your next question is, “What types of business disputes cannot be mediated?” We’ll explore these business disputes in this article. Furthermore, we will review what makes these disputes difficult to resolve before a mediator.
Whatever kind of dispute your business faces, it’s a good idea to consult a trusted business attorney. Such a legal professional can smooth over potential roadblocks and lessen the chance of future disputes.
What Kind of Business Disputes Cannot Be Mediated?
Over the last two decades, mediation has become a favored method to resolve business disagreements. The main benefit is that it offers a platform for parties to come together and find common ground. But not all disputes are fit for the mediation table. Let’s dive deeper into why some issues require more formal legal processes.
Disputes That Concern Illegal Activities
When a business dispute arises from illegal activities, the issue isn’t just about finding common ground or understanding. Instead, it involves a breach of legal principles and societal values. Mediation lacks the authority to penalize illegal actions. Furthermore, a mediation session may inadvertently shield wrongdoers. Therefore, parties should refer a dispute over alleged illegality to litigation. Courts handle these matters to ensure justice prevails and offenders face consequences.
Sometimes, business disputes require immediate resolution. Absent that immediate resolution, one or both parties may suffer harm. Although quicker than trials, mediation might not offer the immediate relief necessary. In addition, mediation has no mechanisms to stop a party from taking action pending the outcome of the mediation.
Courts, on the other hand, can issue quick, binding orders. For instance, courts can issue injunctions. These legal orders require a party to take action (or refrain from taking action). Courts can also order a business to take a specific action if it finds that monetary damages cannot be an adequate alternative remedy. Such an order is called specific performance.
Disputes Surrounding Patent Validity
Patent disputes center around society’s efforts to protect innovations and ensure creators have exclusive rights. Most patents relate to complex inventions or methods. Thus, disputing their validity gets technical and detail-oriented. Combined with the nuances of patent law, unpacking the technical details of the patent itself often necessitates expert judgments. Mediation is a poor venue for making determinations on patent validity. Litigation would be a better alternative because courts can order expert witnesses to appear and provide detailed testimony.
Antitrust disputes often affect industries, markets, product pricing, availability, and competition health. As with patent disputes, these complicated considerations often exceed the breadth of mediation. Therefore, mediation is not the best venue to resolve these disputes.
Mediation is unsuitable for antitrust disputes because they affect the broader public interest. Consequently, regulatory agencies and courts are better equipped to handle the complexities and implications of antitrust cases.
Disputes Requiring Precedent
Businesses sometimes encounter the same disputes over and over. Unfortunately, mediation does not create a precedent. Consequently, resolving one business dispute does not influence future disputes, even if the subsequent dispute is identical to the earlier one. This lack of consistency creates a degree of unpredictability that can cause problems for all types of businesses.
By contrast, a court judgment resolves the present dispute and offers guidance for future ones. By creating an authoritative precedent, court decisions offer businesses the consistency that mediation cannot provide.
Alternative Pathways for Resolving Business Disputes
Apart from mediation, several other methods exist to help businesses address disputes. Arbitration is a notable alternative. Arbitration involves an impartial third party reviewing the facts and deciding. Their decision can be binding or non-binding, depending on the agreement between the parties. While it offers a faster resolution than traditional court trials, it may be just as costly.
Negotiation is another approach. Here, the disputing parties engage in discussions to reach a mutually beneficial solution. Unlike mediation, there’s no neutral third party to guide the conversation. The process heavily relies on communication skills and the willingness of both sides to compromise.
Finally, litigation is the traditional method for those seeking a more formal approach. It involves taking the dispute to court, where a judge (and sometimes a jury) delivers a binding decision after examining evidence and hearing arguments. While it provides a definitive resolution, litigation is often time-consuming, expensive, and corrosive to business relationships.
Do You Need Assistance Resolving a Business Dispute?
While mediation serves as a powerful tool in bridging differences, it isn’t a catch-all remedy. Recognizing the types of business disputes that cannot be mediated ensures businesses can select the most appropriate resolution method, whether that’s arbitration, negotiation, litigation, or another approach. By understanding the nuances of each method and seeking expert advice when needed, businesses can navigate conflicts efficiently and maintain their focus on growth, innovation, and success.
Here at The Curley Law Firm, we have years of experience helping businesses resolve all kinds of disputes. Adam Curley can leverage his professional talents to assess your firm’s situation and the ideal venue for resolving its business disputes. Don’t wait. Contact us to set up a consultation today.