Commercial and business disputes always arise, and if you don’t fight for what is yours and what is right, no one else will. 

First, you try to talk it out with emails and phone calls back and forth that just aren’t getting the job done. When that doesn’t work, you should have your lawyer send a Demand Letter. A Demand Letter is the first step in any formal legal dispute. It is a straightforward and effective method to inform your counterparty (including executives who may not yet be aware) that there is a problem and set the groundwork for solving it. 

Whether you are an owner who hasn’t received royalty payments for the mineral interests you own, the victim of a contract breach by your counterparty, or you need to demand indemnity for a claim that shouldn’t attach to you, the Demand Letter needs to be crafted carefully and delivered timely to ensure that you are protecting all of your rights. A proper Demand Letter should be clear and specific about how your rights arise (contract, record title, etc.) and how the other party has violated them (or needs to act to avoid violating them). It is essential to make a formal Demand Letter firm while avoiding being unduly aggressive or confrontational. It makes dollars and sense to maintain as positive a relationship as possible with the counterparty. Professionalism, firmness, and persistence will often lead to a swift and inexpensive settlement or resolution to your dispute. But if this doesn’t resolve the issue, what is your next step?

Often, the next step is putting together a litigation team and filing suit (unless you are bound by an arbitration clause, in which case you are sending an Arbitration Notice), which means that your legal bills will almost immediately start heading toward the stratosphere. There is an often-overlooked alternative that can be fast, effective, and cost sensitive – Pre-Suit Mediation.

Litigation is expensive … even if you win. Other than trial lawyers, most attorneys will tell you that the only true winners in most litigated disputes are the lawyers on both sides. You would think it would be hard to get the other side to agree to mediate (unless it’s already in your contract), but you may be surprised. After all, the other side is also thinking about their legal costs. Despite how fearsome and definitive the Demand Letters and responses that have been lobbed back and forth may seem, the other guys likely have doubts about the merits of their case and would rather avoid a messy fight.

Mediation is a non-binding, structured negotiation refereed by an experienced attorney or former judge. Mediators often work on an affordable flat fee basis and are flexible about timing, venue, and the level of formality. Often, the most valuable aspect of a mediation is a mediator’s ability to hear everyone out and then poke holes in both sides’ positions. Playing devil’s advocate and weighing the strengths and weaknesses of all the arguments, a mediator can often bring heated and hyperbole-ridden disputes back to reality and back into focus on the dollars and cents. With this focus restored many disputes can be resolved without going to court, saving both time and money.

Even if the mediation doesn’t resolve your dispute, it can still add value. It can temper the expectations of both parties, forcing them to hear and consider the other side’s position in a calm setting. Conversely, it can also pressure test your arguments and evidence, helping you hone in on the winning aspects of your claim or defense.

RR&A can help with all aspects of pre-litigation dispute resolution. From drafting and sending Demand Letters and the responses thereto to pitching and setting up a mediation, selecting a mediator, preparing for the mediation, and advocating for your company at the mediation. Sending well-drafted Demand Letters and participating in Pre-Suit Mediation are not foolproof ways to resolve every conflict. However, they can be powerful and cost effective tools to work out disputes without breaking the bank.