Even as we’re starting to see the early stages of an economic recovery, businesses and individuals continue to trudge through the ugly legal fallout of deals-gone-bad.   Countless lawsuits have resulted from soured joint ventures, alleged breaches of contract, and plain old disputes over who owed what to whom.   These lawsuits can be costly, time-consuming, and counterproductive.   Worst of all, they can distract you from what’s truly important: tending to your business’s current needs and helping it survive-and thrive-for the future.

As reported in the New York Times on December 28, 2009, recession-related lawsuits, even apart from home foreclosures, are on the rise.   New York State courts seem to have been turned “into theaters of the economic crisis.” Yet after spending lots of time and money on a lawsuit, most parties (even the winners) end up wishing the whole thing could have been avoided.   Such expensive litigation often results from the parties’ inability to find a workable solution to their problem on their own.   When parties to a dispute can’t communicate openly and effectively, they can’t work out their differences.   A cooperative and efficient method of dispute resolution is then quickly superseded by the more adversarial, complex, and “zero-sum” means of traditional litigation.

Some business contracts require that the parties submit any potential disputes to arbitration, a legally binding process by which the issues can be resolved.   But even absent such a requirement, parties can submit their matter to arbitration, which is relatively formal, or mediation, which is less formal and more flexible.   In mediation, a third-party neutral mediator will help the parties communicate with each other and work toward resolution of the issues at hand.   A capable mediator can help the parties see their conflict clearly and fairly, without allowing distractions such as damaged egos and deep-seated grudges to poison the resolution process.

Unfortunately, disputes are bound to happen in business.   Difficult times turn up the pressure on everyone, making such situations seem utterly intractable.   But properly mediated, business disputes need not become an undue burden on either party’s wallet, schedule, or energy.

About The Guest Author: Andrew R. Levinson, is the Managing Director of Riverside Strategic Advisors LLC, a business consulting and commercial mediation firm located in New York.