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Arbitration clauses became a tool of corporations for a variety of reasons. One, an arbitration is a forum where the claims are not publicly filed or readily accessible to anyone trying to find problems where none exist. Two, arbitration generally carries a far lesser cost than a state or federal court case. And three, parties maintain much more control over the process in an arbitration than they do in courts. To require arbitration of disputes, companies inserted contractual clauses requiring “any and all disputes to be arbitrated” before a specific arbitration forum.

New Jersey courts have recently set upon a course of conduct to nullify such arbitration provisions, setting aside arbitration clauses and forcing parties to spend exponentially more money on a case. This often results in disputes with employees or third parties in the public view.

There is a tactical and practical solution that far too many company’s fail to utilize before getting to this point: a mediation pre-requisite into your contracts. What does this do? Most importantly, before any claim is filed, you now have the opportunity to have the claim presented; to or from you. This gives you the chance to assess the risk of moving forward from a legal and business prospective.

Even where the dispute is one you know from the outset will not settle, mediation as a condition precedent should be utilized. With a pre-filing mediation you have the opportunity to sit in a much friendlier setting across from the person who will become your adversary. Unlike in a litigation or arbitration cross-examination, in mediations you can ask any question and assess how the person across the mediation table will appear as a witness. Early answers to the following questions can be critical in determining how you proceed: Can the person be shaken easily? Will the person garner sympathy as a witness? Is the person prone to hyperbole? Where and what are the holes in the story?

Parties, particularly when they are individuals, want to be heard. And my advice: let them talk … as much as possible. Let them have their moment before you as well as with an independent mediator who will then provide you with an assessment of the case.

Similarly, you learn about counsel for the adverse party. In addition to learning your potential adversary’s litigation skills, you will have the opportunity to have face-to-face time, building a relationship that may be necessary down the road should the matter devolve into an arbitration or litigation.

There is no such thing as a failed mediation. One way or the other, with a pre-filing mediation requirement, you are going to leave the day with substantially more control, whether resolution or preparation for things to come, then you would have had if the case is filed by or against you from the outset.