How to Solve a Contract Dispute Quickly and Cheaply

The American court system is open and available to everyone with a dispute, but suing someone in a contract dispute can be extremely expensive. For many, the costs of going all the way through a jury trial are prohibitively high, but there are different types of dispute resolutions.

“Almost every case in California settles, because with two reasonable, objective, smart attorneys on both sides, both can evaluate where the case should end up,” says mediator Bruce Isaacs. “The range may differ, but since most cases settle—even on the courthouse steps—why not get there before incurring $750,000 in attorney’s fees?”

There are many other options in the state of California to settle legal disputes. These alternative dispute resolution (ADR) structures are being utilized by savvy attorneys and litigants as a way to solve problems more effectively and efficiently. Mediation is a dispute resolution process in which both parties in a dispute agree to meet with a neutral mediator. It’s often a full day process, where everyone shows up in the morning and agrees to not leave until an agreement is reached.

There are many advantages to mediation—the biggest being a lower cost. “People tend to act more reasonably in a mediation,” Isaacs adds. “Usually as the day goes on, people become more reasonable. They may come into the day of mediation guns-a-blazing, but often with a mediator in the room, people get reasonable. Lawyers are better able to get cases settled when a mediator is guiding the process.”

Even if a lawsuit is filed, nearly every case in California is ordered to try mediation, Isaacs notes. “The courts are overloaded and overwhelmed, and when the litigants start into the process, with all of the e-discovery involved in cases, it’s so expensive to take a case to trial. Everything about the process is time consuming and frustrating. A mediation or arbitration just makes sense.”

Many contracts include mandatory mediation or arbitration clauses. This can limit some options for groups of people with specific issues, but the benefit of mediation or arbitration processes is that they are collaborative. This can be especially important in industries where the parties may cross paths again.

“When an entertainment case settles, it either has the parties going their separate ways or parties going back into business with a new contract,” Isaacs says.

The court system is adversarial—one party verses another, with one winner and one loser—but mediation takes a different approach. “We help people to end litigation and move on with their lives rather than continue with the pain,” Isaacs says.

Perhaps the next time you have a contract dispute, consider mediation as conflict resolution before heading into a prolonged and expensive litigation. To be the most successful, consider hiring an experienced and reputable attorney and mediator to offer legal advice on your dispute.

If you’d like more general information about this area of the law, see our contract law overview.