Mediation Confidentiality: Why It Matters for Your Business Dispute

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  2. Mediation Confidentiality: Why It Matters for Your Business Dispute
Mediation Confidentiality: Why It Matters for Your Business Dispute

If you are distracted by a business dispute and want to resolve it, you should learn more about mediation confidentiality. Business owners may face disputes that threaten to affect their day-to-day operations. A dispute may even generate negative publicity that hurts your bottom line. You should be worried about litigation, including a lawsuit that would become part of the public record or a newsworthy court verdict. Fortunately, alternative dispute methods such as mediation can provide an added level of confidentiality regarding your business conflict.

Mediation Basics

When you are on the verge of litigation for a business dispute, speak to a lawyer about your options. One popular option today that many business owners choose is mediation. Mediation is an alternative dispute resolution technique. It can take place once a conflict arises but before a lawsuit, or it can take place after a lawsuit has been filed (either voluntarily or by court order).

In a mediation, you and the other party or parties to the dispute agree to employ a neutral, third-party mediator. Mediators typically are experienced lawyers or retired judges. They have the legal knowledge and distance from your conflict necessary to offer a fresh perspective. For the mediation, you, the other party, your lawyers, and the mediator will meet in a neutral location. Often this is a conference center or office suite.

During the mediation, the mediator will help you and the other party exchange information about your dispute. He or she may ask questions, prompt you to discuss the facts or applicable law, and talk about the strengths and weaknesses of your case. The mediator’s job is to “encourage and assist” you in reaching a settlement of the dispute.

Mediations and Confidentiality

Yes, mediations are confidential. Texas law explicitly provides that the mediator may not disclose information learned during a mediation:

Unless expressly authorized by the disclosing party, the impartial third party may not disclose to either party information given in confidence by the other and shall at all times maintain confidentiality with respect to communications relating to the subject matter of the dispute.

Any communications made to the mediator by a party to the mediation are confidential, unless the party authorizes the mediator to disclose them. In addition, the mediator cannot share these communications with anyone else.

In addition, Texas law also provides that the parties to the mediation are bound by confidentiality:

Unless the parties agree otherwise, all matters, including the conduct and demeanor of the parties and their counsel during the settlement process, are confidential and may never be disclosed to anyone, including the appointing court.

What is the effect of this law? Parties to a mediation can engage in settlement discussions without fear that the court, a jury, or the public will learn what they talked about. Once you leave the mediation, the mediator and the other party cannot share information you shared with them (that wasn’t already disclosed in litigation or publicly known).

Why Consider Mediation

If you fear that your conflict will harm your business’s reputation or generate negative publicity, mediation could be a great choice. Instead of publicly litigating a contentious dispute, you may be able to settle it behind the shield of mediation confidentiality. Business owners engaged in private company disputes or business divorces may welcome the chance to settle their dispute by working toward a solution, rather than going to court. In addition, mediation may take less time and may cost less than a prolonged litigation battle.

Business owners interested in learning more about mediation for a dispute should contact a local business lawyer. At Henke, Williams & Boll, we handle business mediations for our clients, including those dealing with business divorces or other types of disputes. We can review your case and determine whether mediation or another alternative dispute resolution method is right for you. Contact us to learn more about the mediation process and how it could benefit your business.

Let Us Help with Your Business Dispute

As experienced Houston business lawyers, we help our clients find the best solutions possible to their conflicts. We understand that confidentiality and trust are critical to our clients. With knowledge of alternative dispute resolution techniques, as well as business litigation, our lawyers can tailor a plan of action to your unique situation. Call (713) 936-5521 or use our convenient Contact Form to set up a consultation with Henke, Williams & Boll.

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