3 examples of mediation in action helping small businesses

Disputes can take a toll on small businesses. Occasionally messy and drawn out, they can drain resources and require experience that the company does not have. Mediation is a solution for small businesses that can help achieve dispute resolutions with minimal disruption.

What is mediation?

Mediation is where the parties involved in a disagreement agree to meet, along with a neutral mediator, to try and work out a solution. It is a type of alternative dispute resolution to litigation. The proceedings tend to be more informal, and can take as little as a couple of hours to find an outcome that suits both parties.

Using mediation can allow small businesses to avoid the time and costs that are often involved in using the legal process.

Mediation can allow small businesses to avoid hefty legal fees.

Three examples of mediation helping small businesses

To highlight how mediation can benefit SMEs, listed below are three different examples where it has helped a small business reach an agreement in a business dispute. Previously, they'd not been able to resolve it on their own.

Payment dispute example

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) acted as an arbitrator for helping settle a payment dispute brought in by a small business owner. They'd spent the past six months trying to sort the situation out, but due to complications within the other business involved, was unable to resolve it.

However, with the Assistance Team at ASBFEO, a payment plan was agreed upon to clear the debt over four weeks, and the owner left immensely pleased with the solution.

Contract dispute example

In another situation, a small business owner came to ASBFEO for help with a contract dispute with a lead generation online business. She'd signed on to a 12 month contract with them at a set dollar amount per month. As time went on, she'd continually increased this monthly amount, unaware that each time did she was actually entering into a new 12 month long contract.

Coming up to when the first contract was going to expire she called in to cancel, and was told that in doing so she'd have to pay out almost $4,000. Arbitration allowed her to end the contract without the fee. 

Mediation can help find a solution to contract disputes.

Supply dispute example

The Victorian Small Business Commission (VSBC) was brought a dispute where a farmer had been supplied a faulty tractor. Despite the farmer trying to negotiate with the company he'd purchased it from, he'd been put off for months, and eventually they refused to discuss the matter with him further.

Using mediation was a success for the farmer, with the supplier taking the tractor back, and agreeing to provide a new one with warranties and assurances of services should they be necessary.

At Wilson Porter, we have a range of experts on our team to help small businesses out in a myriad of different ways. Reach out to us if you need support – we're here for you.