What Happens If a Party Refuses Mediation in a Business Dispute?

If you’re in the midst of a business dispute, mediation can be a great way to resolve issues with as little financial loss and time waste as possible. But if one party refuses mediation, things can become quite difficult. No matter what the situation, working with a dispute lawyer in Las Vegas, NV is always the best way to move forward as quickly and smoothly as possible.

The first consequence is always dependent on whether there’s a clause in your contract requiring mediation. If there is, and if one party refuses to honor that clause and enter mediation in a dispute, then the contract will often specify particular penalties they have to pay. A common penalty is for the refusing party to pay all the legal costs of the other party, regardless of who ultimately wins the dispute.

If there is no contract clause requiring mediation, then it’s not a requirement unless the court requires it, and the court may do so and will usually sanction a party that refuses to enter mediation in violation. Courts do not like to have their orders ignored, and you can expect a very hefty fine.

Mediation is nearly always preferable to a lawsuit. It costs less money for both parties and often enables you to reach a resolution in a much shorter time. But if the court does not require mediation, and if there’s no clause requiring it, then the ultimate result is that the dispute is likely to go to court.

Is Mediation Always the Best Move?

No matter how rancorous the dispute, mediation can do a lot, but much depends on the skill of your mediator and the help of your lawyer in preparing for mediation. In most cases, you’ll save money and time through mediation. That said, there are a few situations where mediation might not be appropriate:

When There’s No Good Faith

When one party simply refuses to negotiate in good faith or has an established history of bad faith and dishonesty, then it might not be useful to enter into mediation with them. If a court is requiring mediation and you believe the other party has proven in the past that negotiating with them is just a waste of time, talk with your lawyer about how to present the problem to the court.

When You Want to Set a Precedent

In some cases, the failure of one side may be so egregious, and your case so strong, that negotiations and mediation send the wrong message. It communicates that there is room for compromise when in reality the fault lies 100% on the other party, and it’s important to set a precedent in court.

Talk to a Las Vegas, NV Dispute Lawyer 

If you are in a business dispute, whether you’re facing mediation or not, having a lawyer on your side is the best way to protect your rights. Contact the Hutchings Law Group in Las Vegas, NV today at 702-660-7700 to protect your business.

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