When parties in a business relationship have a dispute, they may pursue several ways to resolve it. Parties frequently take business disputes to mediation or litigation to pursue a resolution. Mediation can help parties reach a negotiated settlement, whereas litigation means letting a court issue a binding judgment. However, when you have a business dispute, which path of mediation or litigation should you choose to protect your rights and resolve your dispute?
What Happens in Mediation?
Mediation is a formal, structured negotiation process in which parties work to reach a mutually agreeable resolution to a dispute. In mediation, parties negotiate through a neutral third party called a mediator. The mediator’s role includes helping parties understand the strengths and weaknesses of their respective cases and suggesting solutions that the parties might incorporate into their settlement. Parties must agree to submit their dispute to mediation, which takes place over one or more sessions until they reach a settlement or conclude they have reached an impasse in negotiations.
Oregon law protects the confidentiality of statements made by parties in mediation, as such statements occur in the context of settlement negotiations. Even when parties pursue litigation, Oregon courts may encourage or require parties to attend mediation in good faith before proceeding to trial.
Business disputes frequently go to mediation as many commercial contracts contain mandatory mediation clauses, under which parties agree at the outset of their relationship to submit any future disputes to mediation.
Business Litigation in Oregon
Business litigation occurs when a party files a lawsuit in court. The litigation process involves several stages, including initial pleadings and motions, discovery, pretrial motion practice, and trial. Court litigation occurs in a public forum, and the pleadings, motions, and rulings typically become part of the public record.
Factors to Consider When Choosing Between Mediation and Litigation
Parties should evaluate various factors when deciding to submit a business dispute to mediation or litigation:
- Cost: Mediation typically involves lower expenses for parties compared to court litigation.
- Speed: A mediation can settle in weeks or months, whereas business litigation often takes more than a year.
- Confidentiality: Mediation occurs in a private, confidential setting, whereas litigation typically occurs in open court and creates a public record.
- Control over outcome: Mediation lets parties control the outcome because they must agree to any settlement terms, whereas litigation means handing control of the result to a judge and jury.
- Enforceability: Parties must agree to submit a dispute to mediation or continue with mediation and may walk away from an ongoing mediation at any time. Conversely, litigation will eventually result in a binding court judgment.
Which Should You Choose?
Parties may go to mediation if their contract requires it, if they want to minimize legal expenses or reach a prompt resolution, or if they want to preserve their relationship by reaching a mutually agreeable settlement. However, litigation may become necessary in cases involving fraud, when a party refuses to negotiate in good faith, or when a party needs injunctive relief. Cases involving significant, novel legal issues may also require parties to pursue litigation to establish their respective rights and obligations.
Contact Our Business Litigation Firm Today to Help You Pursue a Tailored Strategy
Mediation or litigation provides ways for parties to end an impasse in their business relationship or seek relief for losses caused by misconduct. Contact Wayne A. Lamb Law today for an initial consultation with an experienced litigation attorney to understand the differences between mediation and litigation for business disputes and determine which path you should choose to resolve your dispute.