When it comes to business disputes, it is small businesses who are particularly vulnerable. Larger companies may well be able to absorb the time, expense and employee stress that comes with a dispute, but for small businesses, this is not so easy, and reputations and profits may be affected for years to come.

dispute
Image by David Castillo Dominici

Disputes can have a very damaging effect on business. They can cause a reduction in productivity, lead to increased stress and absence from work, damage working relationships, and do not make for a very comfortable working environment for you or your employees. They can also prove expensive. If productivity is affected, you could lose out on profits, and that’s not to mention the costs of getting the dispute resolved.

Mediation could provide the answer. It is a form of alternative dispute resolution (ADR), and involves encouraging the two parties concerned to identify, talk through and resolve their issues, without resorting to court proceedings.

Mediation can help resolve disputes between companies, or within the same company. ACAS, the UK’s main employment relations advisory service, encourages its use, as it is widely considered to help promote understanding and build relationships. And because a mutual agreement is reached, both parties are more likely to keep to it. Even if an agreement is not reached, mediation may still improve working relationships within your business by encouraging the parties concerned to consider a different point of view.

But mediation is not widely used yet. It is still finding its feet as a means of ADR. In January, a Government funded scheme was launched to help promote awareness of mediation among small businesses and their employees. However, a 2011 ACAS study revealed that employers were already aware of it, and although they had not really used it, 74% of businesses agreed that it could be a good tool for resolving disputes.

However, you should be aware that not every issue is suitable for mediation, so review the situation carefully first. Issues with relationships are more likely to benefit from mediation than those which are based on facts. You also need to ensure that both parties are willing to consider mediation as a way of resolving the dispute, otherwise you are unlikely to reach a solution. Lastly, it is best to start the process as early as possible, once you have established that mediation could provide a solution, and that both parties are open to it.

For small businesses, therefore, mediation can be an excellent solution to tricky problems. Allowing people to talk through their differences and work together towards a common solution can only be beneficial in the long run, and avoiding the hassle of taking the dispute to court can save small businesses vital time and money that can be put towards better things.

About the Author: Altmore Business Law are a commercial law firm based in the East Midlands, providing company law solicitors in Nottingham, Grantham, Leicester and throughout the region. They provide comprehensive business and commercial legal advice to both small businesses and large corporations.