3 Reasons to Choose Mediation Over Going to Court

By Sam Ventola,

mediation

“Life is very short and there’s no time for fussing and fighting, my friend.”

John Lennon and Paul McCartney

Mediation is defined as “intervention in a dispute in order to resolve it.”  By using the mediation process to resolve business disputes, it can benefit you in several ways.

Time

As a business owner, you understand that time is money.  If you go to court, it requires you to spend time away from working with clients.  In addition, the legal process can take up to a year to be resolved.  By utilizing mediation prior to filing suit, your dispute can be resolved in significantly less time and money.

Money

Another downside to going to court are costs involved in filing a lawsuit.  Costs such as filing fees, court costs and service of process fees add up, especially for a small business owner.  Another cost that a business owner may incur are attorney’s fees.  By choosing mediation, a business owner can resolve a dispute with a smaller investment. These costs usually wind up being more than the amount you are seeking in your lawsuit thus generating not only an impact to your wallet but also to your overall health.

Stress

Conflict can be extremely stressful.  For a business owner, building relationships is important to building a business.  When communication breaks down in a business relationship, it creates stress along with the increase of time and loss of money.  By going to court to resolve a dispute, there is usually one winner and one loser.  By choosing mediation, a business owner can reach a resolution that potentially benefits both parties.

How we are different

There are hundreds of mediators, but almost all of them will tell you they can’t give legal advice.  This means you still have to pay your own lawyer, as does the other side, and both of your lawyers will be telling you that the time for mediation will not come until much later during the court case – after most of the money is gone.  Sam Ventola is an experienced litigator with 30 years’ experience, and explains the law to both parties and tell them how it applies to their dispute.

If you would like more information regarding our mediation experience, please contact our office at (303) 864-9797 or email Sam directly at sam@samventola.com

 

smv-bio-small-for-blog

Sam Ventola has a wide variety of experience in litigation, legal education, and mediation. He has been an attorney on both sides in business litigation, employment disputes, probate litigation, and personal injury cases. In addition to being an attorney, he has been a mediator, hearing officer, labor relations professor, and lecturer on litigation, employment and First Amendment issues. He has also achieved the rating of AV Preeminent® by Martindale Hubbell.

 

 

The Problems with Litigation, Arbitration, and Mediation – Part II Arbitration

By Sam Ventola,

CrossroadsIn our last article, we examined the drawbacks to utilizing the conventional method – litigation – to resolve disputes. The cost, in both time and money, makes litigation an incredibly unattractive proposition.

Many people believe that the problems with litigation can be eliminated by resolving disputes through arbitration. Unfortunately, this is usually not the case. Surprisingly, arbitration can be every bit as costly as litigation, if not more so, and can drag on just as long.

When a dispute is submitted to arbitration, the case will be handled according to whatever rules or decisions the arbitrators make. Although you may think your dispute will be resolved quickly and cheaply, in fact, arbitrators often will employ the same rules and procedures used in court cases. Depositions, written discovery requests, motions, hearings – these all exist in arbitration in much the same way they do in litigation.

The important difference is that when you are in court, the taxpayer is paying most of the expense of the judge and the court staff. In arbitration, YOU are paying for the judge! Or judges – arbitrations often involve three arbitrators.

Arbitration fees are substantial.   Filing a case with the American Arbitration Association (“AAA”), for example, requires thousands of dollars in arbitrations fees just to start. This amount goes up by the amount claimed – no matter how unrealistic the claim. If one party has dreamed up damages of a few million dollars, the arbitration administrative fees will be well over $10,000.

And these administrative fees are just the start, as they do not count fees that you have to pay the arbitrators themselves!   You can also be paying hundreds of dollars per hour for each arbitrator. This includes not only time in the arbitration, but also “review time” and preparation time.

As expensive as conventional litigation is, at least the judge there has an interest in the case being resolved quickly. As you can see from the fees they collect however, arbitrators have the opposite interest – they have an interest in having the case drawn out, so they can collect more arbitration fees.   Now you have your lawyers and your judges interested increasing your cost of litigation. Arbitrators typically are much less inclined to resolve a case by dismissal or an order of summary judgment. A recent study by Inside Counsel found that arbitrated cases cost just as much as similar litigated cases, and as we have seen, they can cost much more.

The costs of arbitration are much worse when the parties are stuck with it, because they have signed an agreement requiring arbitration before a particular forum such as the AAA.   A recent study by Public Citizen found that in these circumstances, arbitration expenses are almost always much higher, because the parties are forced to use that forum and there is no price competition. NEVER sign an agreement requiring arbitration before AAA or a similar forum.

Because both litigation and arbitration involve significant cost, many people look to avoid these through mediation. However, mediation has its own set of issues, as we will find in our next installment.

 


Sam Ventola has a wide variety of experience in litigation, legal education, and mediation. He has been an attorney on both sides in business litigation, employment disputes, probate litigation, and personal injury cases. In addition to being an attorney, he has been a mediator, hearing officer, labor relations professor, and lecturer on litigation, employment and First Amendment issues. He has also achieved the rating of AV Preeminent® by Martindale Hubbell.

 

The Problems with Litigation, Arbitration, and Mediation

By Sam Ventola,

CrossroadsPart I – Litigation

There are three usual methods of resolving disputes – litigation (having the case heard in court), arbitration (having the case decided by a private decision maker), and mediation (agreeing to resolve the dispute with the assistance of a neutral facilitator.

The problem is that none of these methods is ideal. Each of them has drawbacks which prevents it from being an efficient and reliable method to resolve disputes. In the coming days of this blog we will examine each of them, and suggest an alternative to all of them which makes the most sense.

We begin with litigation. Litigation is the “default” method of resolving disputes, meaning that unless the parties agree otherwise somewhere along the way, the issue will be resolved in litigation. Despite that, however litigation comes at a significant cost – and by cost we don’t just mean money.

Make no mistake, the expense of litigation is significant. In fact, litigation expenses are so high that litigation expenses actually end up exceeding the amounts paid or received in litigation cases. A Duke University study for every dollar spent in litigation, forty percent went to paying awards or settlements…. SIXTY PERCENT went to litigation costs!

When we think of litigation costs we think primarily of attorney’s fees, which are huge and getting higher all the time. Remember that when you are paying attorney’s fees , you are not necessarily just making rich lawyers (although many are), you are also paying for overhead , which is substantial. If you see your lawyer has nice offices, plentiful staff, and expensive advertising – bear in mind you are paying for that. Some forms of advertising absorb half or more of your fees.

Also remember this point – when you are paying a lawyer hourly fees, you are counting on that lawyer to act in your interest. It is in the lawyer’s interest, however, to drag the case out as long as possible to let the attorney’s fees total as high as they can. Not all lawyers are dishonest. But when it is in the lawyer’s interest to engage in scorched earth litigation tactics, it makes sense to question whether the lawyer’s advice is actually promoting the lawyer’s interests over yours, even subconsciously. The doctor always believes in his own medicine; it is the same with lawyers.

Attorney’s fees are just the start, though. Litigation costs also include court filing fees, court reporter fees for depositions, expert witness fees, and appeal fees. All of these fees can sometimes equal or exceed the attorney’s fees.

The most significant cost of litigation, however, may not be any of the expenses paid out. The most significant cost may be YOUR TIME. As litigation drags out month after month, you will find that it makes ever increasing demands on your time and attention, destroying your concentration and stress levels in the process.

The assault on your time, wallet and sanity is compounded by the fact that courts have little to no interest in reducing your costs or time commitment. For example, courts will typically set five or more trials all for the same period of time, based on the assumption that most of them will be resolved before the scheduled start. If you find that another case that has been scheduled for the same time is still going and has priority, you will find that your case will suddenly be postponed. Most of the time and expense of preparing for trial will have to be borne again.

For all of these reasons, the litigation process is clearly less than ideal. Can the usual alternatives – arbitration or mediation be considered reliable replacements? Stay tuned in the coming days as we examine each of these alternatives – and in the end suggest a new solution.

 

Sam Ventola has a wide variety of experience in litigation, legal education, and mediation. He has been an attorney on both sides in business litigation, employment disputes, probate litigation, and personal injury cases. In addition to being an attorney, he has been a mediator, hearing officer, labor relations professor, and lecturer on litigation, employment and First Amendment issues. He has also achieved the rating of AV Preeminent® by Martindale Hubbell.