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Home » Running a Business » Legal advice » Exploring the role of mediation in a small business

Exploring the role of mediation in a small business

David Cliffby David Cliff21 January 2014

David Cliff discusses why it may be easier for a business to settle disputes via mediation before looking at more severe approaches.

Among my hopes for the future is that the UK will start to catch on to the benefits of mediation as a serious dispute resolution tool.

In a country where we have adversarial systems of both government and justice, it is no surprise that mediation hasn’t taken off as well as one would have hoped. There is a strong cultural view of accountability, rather than of finding a solution.

Where we do see mediation in action, it is often a ‘tick box’ or ‘last ditch’ step on the way to an escalated set of actions in the workplace, courts or at tribunal. The mediation is there to show it has been tried, before resorting to action which apportions a definite blame and punishment, rather than finding a real resolution.

Related: How small businesses should approach mediation

So often, I have found myself called in to be a part of a mediation process where this has been the case, only to help find a resolution which has not involved a costly and lengthy court or tribunal process.

These instances have demonstrated the potential savings benefits of mediation. It is often not until the final bill has been picked up from the courts that those involved appreciate the cost of not mediating. Some disputes involve ongoing relationships which will have to continue long after the formalities and have many implications for effective working/productivity, etc. Good mediation looks to that reality and factors this into the process.

Some companies have gone down the route of internal mediators which, whilst saving money, risks the fatal flaw of a perception of bias. Confidence in the system is critical to successful mediation, so this can be a ultimately more costly approach.

Additionally, there are commonly held misconceptions of what mediation involves. Some see it as something which happens between families, overseen by a counsellor. Others perceive it as being led by a lawyer.

There are now a large number of good mediators who are not legally trained and, as a result, are much more focussed on crafting a solution which respects the honour and viewpoints of all parties, rather than laying down a judgment of right and wrong.

A more mediated solution, which takes into account the key concepts of people’s individual values and individual dignity, is an attractive alternative for companies and public bodies, and is far preferable to something which results in simple apologies, or direct action, such as dismissal. People also make mistakes and mediation reflects that, without focussing on blame and seeking a form of punishment to show justice has been done.

A good mediation is also an opportunity to identify the reasons behind a problem and other needs within an organisation and to make it stronger through the responses to those needs. For example, when discussing the issues which have resulted in the mediation, it may become apparent that management coaching or team building is required and that putting such processes in place can result in a stronger organisation.

By denying themselves the opportunity to explore such issues, owners, managers, and indeed, human resources heads miss out on discovering ways of potentially improving their businesses, and the people within them, which may never otherwise come to light.

More worryingly, they risk throwing the baby out with the bathwater and everyone, including the organisation losing out on a learning opportunity which is rooted in something deeper than their own actions.

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Tagged: Small Business Legal Issues
David Cliff

David Cliff

David Cliff is managing director of Gedanken and chairman of the Institute of Directors’ Northern Sector Group. More by David Cliff

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