The push and pull of business mediation

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Business owners come to terms without going to court

In the case of small business vs. disgruntled customer, the courts cannot rule on hurt feelings.

There is no law that says a business owner owes a customer an apology for not returning phone calls. A judge won’t rule on a claim that a customer’s tantrum chased away other clients and damaged the business’ reputation.

“The law can’t deal with that,” said Dan Winograd, Colorado Springs Small Claims Court magistrate. “Either money is owed or it isn’t.”

But mediation often can get to the bottom of the conflict between a small business and a customer to resolve hurt feelings before things escalate right into Winograd’s courtroom, where filing and court fees can run about $100.

“I tell people if I hear a case in trial, one or both of you will be unhappy with the result,” Winograd said.

An estimated 1,500 claims are filed in El Paso County’s Small Claims Court ever year, Winograd said. Most common conflicts revolve around auto repair, home improvement, and roofing and landscaping services. The money in question can range from $100 to thousands of dollars.

For years the Better Business Bureau of Southern Colorado has offered free mediation to its members. The program helps relieve the burden on the courts; saves time and money; and gives folks a forum to vent, said Carol Odell, BBB executive director and CEO.

And what is said in the BBB’s mediation room stays in that room, Odell said.

“There are no tapes, no records — it’s all confidential,” she said.

The idea is to get business owner and customer to sit down and talk about the problem, she said. Mediators don’t give legal advice and they don’t render judgment. Instead, they facilitate a long-overdue conversation, Odell said.

“They explore options on ways to settle the conflict,” she said. “They both get a voice and they have the opportunity to get a solution that they are both comfortable with — and hopefully, the business has retained a customer.”

In April, BBB volunteer mediators heard 19 cases. About half were resolved; the rest went to court.

A typical scenario plays out when an unhappy customer — whose expectations of services have not been fulfilled — withholds payment as leverage, said Christiana Bauch, a professional mediator who volunteers with the BBB’s mediation program.

But a judge won’t have time to wade through the whole story, she said. It will come down to a financial decision.

“People have this misguided notion that they will have their day in court,” Bauch said. “The reality is the courts are so backed up and the judge does not have time to read the case in advance. He hears just a couple of minutes, and that is not usually a good representation of the exhaustive situation.”

In one recent case, the business owner just wanted an apology for the scene the customer caused, Bauch said. Once the customer agreed she had behaved badly, the business owner provided the services in question.

“You will never get that through litigation,” Bauch said.

Scott McIntyre, owner of Total Roofing, was the subcontractor on a roofing job and was owed $15,000. The customer had a beef with the main contractor and was withholding the payment.

“I contacted the BBB so I could get paid,” McIntyre said, “so I wouldn’t have to take him to Small Claims Court.”

The customer was cordial, McIntyre said. It was a far cry from his experience in Small Claims Court, where he had taken another non-paying customer.

“This was better,” he said. “You get to talk.”

Once the customer realized McIntyre as subcontractor was not responsible for the complaint of service, he paid the money.

“We rewrote the contract so it was between us,” McIntyre said. “He got a better price on the roof, and I got paid.”

Mediation doesn’t always work out, said Annie Robbins-Cohen, a professional mediator and volunteer in the BBB and Small Claims Court mediation program. But it’s an opportunity for the business to keep a client, she said.

The most common theme is frustration over a breakdown in communication between the business and the customer. Usually, they just need to see the issue from the other’s perspective, she said.

“At Small Claims Court, the parties end up in a trial and there is no customer satisfaction at all,” Robbins-Cohen said.

In mediation, customers and businesses can come up with a creative solution, including a payment plan, which can be an incentive to go through mediation instead of waiting for the judge’s ruling.

“I’m a firm believer that if you get people to talk to each other, they can solve their own problem,” Winograd said. “I try to get people to separate out the issues the law can’t deal with — the hurt feelings, the personal and emotional responses.”

About half of the Small Claims Court cases are resolved in mediation, Winograd said. He hears from customers and business owners that they are satisfied with the results and often shake hands to end the ordeal.

“When you are dealing with disputes between two people about who owes what money, well, court is better than shooting each other,” Winograd said. “The objective that I set out is that I want you folks to solve the problem — if you solve it yourself, that is a better solution than I can give you.”

BBB Dispute Solutions

The BBB offers its members free mediation services. The service is available for non-members for a $150 fee, divided between the parties. Mediation is confidential. For details call Ryan Luecke at 636-5076 ext. 128.