For the past couple of years, I’ve been expanding my approach to asset protection strategy in more of a preventative manner than in a defensive one. What I mean by this is that rather than strictly utilizing and relying on the use of legal entities for protection, I’ve expanded into increasing my knowledge and skill set to include strategies for successfully avoiding lawsuits from ever arising. This has primarily taken the form of learning more about a field known as “alternative dispute resolution.”
The use of the word “alternative” in the term is meant to imply that solutions are being sought other than those achieved through the traditional method of litigation. As some of you may know, and others can surely imagine, going through litigation can be a costly and time-consuming affair. Not only are there the monetary costs but the emotional toll that it can take on the participants can be extraordinary. To avoid this, it’s important to identify multiple options. Alternative dispute resolution is a field that has become increasingly popular for this.
If you’ve been reading Traces over the last few months, hopefully you’ve noticed that I’ve been writing a series of articles on the overall topic of asset protection. Through these articles, I’ve been taking a different approach from what is traditionally viewed as asset protection strategy. Rather than delving into all of the many areas that encompass the field,
I’ve focused these articles on how to protect assets by avoiding lawsuits. For marketers, many of the lawsuits that they face are the result of customers and/or clients who are dissatisfied with a product or service. More specifically, they are usually unhappy with how their complaints were handled (or not handled) by the company. To avoid these lawsuits, it’s absolutely essential that proper practices are put into place to try to resolve these disputes before things get ugly. To reiterate the areas of focus for how I’ve been approaching asset protection through these articles, they are:
This month’s focus is on the use of mediation as a means of protecting assets.
Mediation has become an increasingly popular method for dispute resolution. In fact, it has become a mandatory process in some court systems here in the United States as well as in many other countries. Part of the reason for that is that the court system is getting bogged down and backed up by a glut of lawsuits. As you may have read or heard me state, studies have shown that there is a new lawsuit filed in the United States every thirty seconds on average.
This is an incredible number of actions being filed and the courts simply cannot keep up with them. That’s part of the reason that the threat of litigation is so scary. Because of the lengthy process, even if you believe that the cause of action against you does not have any merit or that you’ll ultimately win, it takes a lot of time and a lot of money to get to that point. On top of that, there is a lot of worry that goes into the process due to a fear of the unknown.
So how does mediation fit into this scenario? Well, the best way to illustrate this is to take a look at exactly what it is, how it works, and what it is intended to accomplish. I’ve included a brief synopsis of the mediation process as described by the American Bar Association that I believe does a great job of ex- plaining this.
Mediation is a private process where a neutral third person called a mediator helps the parties discuss and try to resolve the dispute. The parties have the opportunity to describe the issues, discuss their interests, understandings, and feelings; provide each other with information and explore ideas for the resolution of the dispute. While courts can mandate that certain cases go to mediation, the process remains “voluntary” in that the parties are not required to come to agreement.
The mediator does not have the power to make a decision for the parties, but can help the parties find a resolution that is mutually accept- able. The only people who can resolve the dispute in mediation are the parties themselves. There are a number of different ways that a mediation can proceed. Most mediations start with the parties together in a joint session. The mediator will describe how the process works, will explain the mediator’s role and will help establish ground rules and an agenda for the session. Generally, parties then make opening statements. Some mediators conduct the entire process in a joint session. However, other mediators will move to separate sessions, shuttling back and forth between the parties. If the parties reach an agreement, the mediator may help reduce the agreement to a written contract, which may be enforceable in court.
Some of the key points that I would point out from the above-listed description are:
- There is a neutral third person who facilitates the process;
- The parties have an opportunity to explain their side of the story and take an active role in the process rather than being at the mercy of a judge and/or jury;
- The process is voluntary and non-binding (unless agreed upon otherwise); and
- The intent of the process is to try to work things out in a collaborative manner.
Now, I certainly understand that things can get heated to the point where attempting to work things out together with the other party in a collaborative manner to come up with a mutually acceptable resolution is simply impossible. That’s one of the great things about mediation. If you go through it and are still at odds, you can seek more traditional means of resolution at that point. The only real risk that you have in mediation is that you’ve spent some time and money on attempting to avoid litigation. Through that investment, however, it’s highly likely that you may have learned a few important things about the other party and their interests. This can be invaluable in ultimately coming to some sort of resolution. Remember, because the process is non-binding, you retain options if it doesn’t work.
I firmly believe that every online (or offline) marketer needs to have a clearly stated dispute resolution policy as part of their documentation. Whether or not that is a mediation clause is up to you. If nothing else, it’s something that should be considered. In next month’s article, we’ll be talking about a more formal approach: arbitration.
In my law practice and educational training programs, I provide assistance with strategies such as this. Rather than simply taking one’s chances with costly litigation, I always focus on mitigating the challenges through alternative dispute resolution strategies as well. Through the programs and services that my company and I provide, clients and students can learn and implement important strategies for covering their assets. To learn more, visit my website at www.jjchilders.com.