Resolving Business Disputes With Mediation: Is It the Best Way?

Are there any unresolved disagreements and tension in your company? Every entrepreneur will run into a conflict when running a business. Whether with your business partner, supplier, contractor, or purchaser, you won’t always see eye-to-eye on everything. 

Discord in the business isn’t entirely bad. It can be a great way to create better business outcomes when managed well. But, sometimes, the parties involved become emotional and lose sight of the bigger picture. This is particularly true when money is on the line. 

When you can’t reach an agreement, such misunderstandings can turn into overwhelming and financially draining lawsuits. Although court litigation is the most familiar type to resolve disagreements, other alternative dispute resolution processes are available. 

One of them is mediation, which can save you time and money. But is it the best way to resolve your business disputes? Find out by reading below. 

How Does the Mediation Process Work?

Mediation is one approach for alternative dispute resolution (ADR) where an unbiased mediator meets with the parties having conflict and guides them to reach an agreement. This can be done through an informal gathering or a scheduled settlement conference. Unlike a judge or arbitrator, mediators don’t have the authority to decide or impose a settlement on the parties. 

Instead, they are there to facilitate the discussion, understand each other’s position and help the parties find common ground and move toward resolution. They can speak privately with each party or have both parties participate in a discussion. 

If the mediation process is successful, meaning both parties reach an agreement, what you and the other party have agreed to will be recorded in a binding contract. You have the option to make the contract legally enforceable in court or not. This can be beneficial if the other party doesn’t fulfill the agreement in the future. 

Meanwhile, you can opt to take legal action and resolve the dispute in court if mediation fails and doesn’t result in a settlement. 

What Are the Benefits of Using Mediation?

Coping with a relatively minor dispute through legal means can be frustrating, especially when your business doesn’t have sufficient time and resources. Because mediation is a short-term process, it’s often an appealing choice for many enterprises. 

Using mediation to resolve business disputes may come with several benefits, such as: 


Resolving disputes can be prolonged, and the longer it lasts, the higher the cost will be. The good news is that mediation costs are considerably less inexpensive than going into a litigation court process. As a business owner who wants to keep costs down, this is most likely an essential factor.

Depending on the mediator’s experience, their fees per hour can range from $150 to $750. And typically, these costs are split by both parties. Meanwhile, a lawsuit can cost higher than $10,000–$25,000, based on the surveys of Canadian lawyers. 

Time Resolution

Taking a dispute to court is time-consuming. Trial delays can happen, causing a case to take two to five years. Instead of focusing your attention on growing your business, you will spend a lot of your time going to court. 

Mediation, on the other hand, is much quicker and more flexible. The amount of time to resolve a dispute with mediation depends on the case’s complexity. But, with fewer procedures and red tape, it can help settle a serious disagreement in a more reasonable time frame.


Unlike litigation occurring in a public courthouse, mediation happens in a private setting. It’s a confidential process, and the mediators won’t disclose any information you shared during the process. They won’t also record or transcribe your sessions. They will destroy any notes they took during the session once the whole mediation process concludes. 

When Is Mediation Most Appropriate?

Mediation is a voluntary process. But there are instances where court orders require participation in mediation. Generally, resolving a dispute with a mediator may be most appropriate when both parties want to or will have to keep working together and preserve the working relationship. 

It’s also a great solution if you both want to retain control of the outcome and are willing to come to a compromise. Remember that open and honest communication is critical to an effective mediation process. Reaching out to a legal professional would also help you determine whether mediation is the most appropriate method to resolve your business dispute. 

The Bottom Line

Disagreements in business are inevitable. While achieving a conflict-free organization is impossible, you can do something to handle the situation better. And getting a mediator can help resolve the issues without causing further damage to the business relationship. But feel free to explore alternative processes and choose what you think will work best for you and your business.