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Mediation: Safeguard Your Business Against Loss

Got a spare $100K?  That’s the average cost to defend against a lawsuit today.  It’s a staggering sum, and one that could literally bankrupt a company.  What can you do to protect your business?

Use Mediation to safeguard yourself from difficult clients and sticky issues.

How to Avoid Litigation

You know the old joke where the patient says, “Doc, it hurts when I do this” and the doctor replies “so, don’t do that”.  Well, the best way to eliminate litigation expenses is to avoid litigation.  Take proactive steps to solve issues before clients feel compelled to call a lawyer.

Taking Proactive Steps

This is America and everyone has the right to sue, but there are ways to avoid or reduce your litigation exposure.  Below are three strategies to resolve issues before getting to the courthouse steps.

1. Educate your clients

Educate your clients on your value to them and how to best do business with you. Instruct them verbally and in writing about how to express disappointment. 
Doing so, gives everyone involve a clear protocol to follow and thereby lessens misunderstandings. .  It also demonstrates that you and your business have integrity and are willing to work together with clients to meet everyone’s needs and interests. 

2. Include Mediation Clauses

A mediation clause is the part of a contract that invites all parties to use mediation as the principal means for resolving conflict.  Clients may wrongly assume that litigation is the first step to getting satisfaction without some education and a mediation clause.

Mediation clauses are similar to the arbitration clauses you find in many commercial contracts today like credit card agreements. Unlike arbitration, mediation is more informal and affordable.

3.  Try Mediation

Mediation is a forward looking process that brings the parties in dispute together.  Disputants talk, question and create their own solutions helped by the facilitation of a mediator, the neutral third party. A mediator can be very useful in cases when conversations turn sour and parties feel ‘stuck’.

Mediation is particularly beneficial for small businesses because the fees are significantly less than litigation and arbitration. Most mediators charge between $150-400 per hour and most mediations conclude within 10 hours or less ( Compare that to lawyer fees.)

Mediation also helps preserve your relationship with your client.  You learn more about them, their values and needs, and they learn about you. I’ve mediated business disputes where the parties actually increased the business dealings because the process was so successful.

If you’re interested in learning more about mediation or how to resolve client disputes, visit,

This Management article was written by Dina Beach Lynch on 5/11/2005

Dina Beach Lynch is a Workplace Mediator and Ombuds. For more tips, Subcribe to her monthly ezine, Peace at Work.