Companies can save a lot of money, time, and resources by not engaging with the legal system. Instead of litigation, they opt for mediation as a way to dispute resolution. These companies have resolved the issues much earlier than it takes when the matter reaches the court.
In other words, companies are resolving employee-employer issues with mediation rather than through a lawsuit. Half of the cases taken up in court can be solved sooner, cheaper, and more efficiently. So how much money can companies save by choosing mediation and why are they opting for litigation? Find out.
Companies Have Control
The judge tends to offer a limited solution to the disputing parties when it comes to litigation. Thus only one party wins, and the other loses. In the majority of cases, the judgment is completely unpredictable. No one can guess which side it will favor. On the other hand, mediation emphasizes constructive dialogue. Both the parties involved in a dispute are guided on how to arrive at an amicable solution.
They are encouraged to agree on a decision through which both of them find a middle ground. The parties can determine an outcome, sans the adjudication of the mediator. The lesser the conflicts, the lesser is the length of the mediation, and the lesser is the money spent. In other words, the disputing parties can arrive at a compromise, if not a win-win situation, instead of a win-lose situation.
Companies Save Money
Coming to the actual amount that companies can save through mediation, a six to seven-hour mediation might cost the companies not more than $7000. However, if the issue goes to court, the expenses can escalate to around$10,000 and $100,00. This is because they have to incur a cost that is 5% of the total value of the claim.
This is a huge difference for the companies since the claims they issue are normally worth on the higher side. Besides that, the company also has to pay the solicitor’s hourly rate, which does not fall under the total cost. So, that’s another big advantage too.
Court judgments are publicly available, which a company involved in a dispute wouldn’t want. Aside from having its reputation at stake, companies also fear that their grade secrets might get exposed in the bargain. That would give their competitors the platform to harm the company’s prospects, thereby setting them back financially. Mediation is known to be a confidential procedure.
Whatever decision a mediator takes remains confined to the parties involved in a dispute. Not only is the information kept confidential, the media too isn’t allowed to get access. This makes sure that the sensitive information of the companies is kept safe from outside access.
Maintains Good Relations
The main purpose of mediation is to keep everyone happy and satisfied. As an employer, you might not want to improve the relationship with an estranged employee. You also wouldn’t want a disgruntled employee to put your organization in a bad light after leaving their job. That can certainly harm the organization’s reputation in the long run. Aside from that, you may wish to maintain good relations with the other party.
Mediation has an important role in ensuring that relations between two disputing parties stay healthy later on. During court proceedings, one cannot expect goodwill and trust if the parties play a role or have a say. Mediation helps to build trust and strengthen communication during the entire length of the procedure and make sure that relations stay healthy later on.
It Saves Time
One can save a lot of time with mediation compared to litigation, which benefits both parties. Certain cases can be long-standing owing to their complications. While it is impossible to solve them in a day, it could take fewer days than it would at a court. Besides that, it also depends on the willingness of the parties to find a resolution and reach a middle ground.
Mediation can prove to be a better option than litigation for companies when it comes to dispute resolution. Aside from maintaining the confidentiality and saving time, mediation is lighter in the pockets. Companies happen to save thousands of dollars through mediation. If you want to save a few thousand dollars for your organization, you may contact a professional mediator.