NFIB

Mediation for Small Business
02/ 10/ 2003

by Alvin M. Hattal

Want to resolve a business dispute without going to court? More and more small businesses are turning to mediation. It's cheaper and faster than litigation, and usually leads to a settlement all parties find reasonable. You can even settle some cases on the Internet, without having to meet with your adversary again.

Most mediated disputes are resolved by experts trained to negotiate every type of dispute, including many encountered by small businesses. Although some disagreements still wind up in arbitration, mediation is growing more popular among adversaries who prefer to reach their own solutions to their problems.

In one typical situation, Mary Kay Lefevour, a Takoma Park, Md., mediator, helped a travel agent come to terms with the agent she hired to try to sell her business. She had paid him half the promised $25,000 fee, but though their contract had no provision for not paying him the full amount of his fee, she balked at paying the remainder when he failed to find a buyer. Lefevour was able to quell the emotions on both sides and persuade each party to abandon their initial stonewalling and make an offer that was grudgingly accepted by both.

Some disagreements are settled online through a series of offers and counter-offers. If the case settles for less than $10,000, ClickNSettle.com bills each party $100; $200 if more than $10,000. "A typical case settled electronically is about $25,000, with a maximum window of time of 60 days," says ClickNSettle.com President Roy Israel. The company charges $15 to submit a case plus about $50 to negotiate it.

The traffic in electronic peacekeeping has grown so rapidly in recent months that both the Federal Trade Commission and Commerce Department have overseen the effort to create a blueprint for this approach to mediation.

Mediators agree that negotiations start with a clear understanding and agreement of terms and conditions by each party. Toward that end, the American Arbitration Association, which has a B2B dispute-resolution branch, has developed guidelines for all business. As the trend grows, small businesses can increasingly avoid the need for costly, time-consuming litigation and truly achieve more win-win results, with a blind-bid system than can take only minutes to resolve.

Internet Mediation

Settleonline.com, a division of Chicago-based Resolute Systems, handles personal-injury and employment disputes primarily, as well as commercial, construction, contract, and professional malpractice disputes. Filing a case is free. Total cost if the case settles is $75-$250.

Cybersettle.com, an arm of National Arbitration & Mediation, says it has developed software that provides access to what it claims is a secure online settlement tool that helps negotiate insurance claims.

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This article originally appeared in the February/March 2003 issue of MyBusiness magazine.

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