Mediation or court? Comparison of costs and time
Most boardroom disputes end up in court only because partners haven't calculated the opportunity costs. Arka Przymierza analyzes hard data: commercial trials in Warsaw currently last an average of 480 days, while we usually sign a settlement in 34 days. We talk specifically about numbers, because every month of conflict is a real loss in your company's financial liquidity.
Direct entry costs and court fees
In a traditional court process in Poland, the proportional fee is usually 5% of the value of the subject of the dispute. In a conflict over 450,000 PLN, which is standard in medium-sized transport or construction companies, the starting fee alone is 22,500 PLN. To this are added advances for court experts, which in 2024 rarely close in an amount lower than 3,400 PLN for one opinion. Arka Przymierza uses a different financial model, where costs are predictable from the first meeting and do not depend on the whims of the court calendar.
Analyzing 47 cases that we conducted in the last half year, the average cost of mediation was 14% of the expenses that the parties would have to bear in a district court. We close disputes, we open businesses, instead of freezing capital in stamp duties. It often happens that one of the partners blocks a dividend payment of 120,000 PLN due to a personal grudge. In court, this amount would lie in a deposit account for 3 years, losing value due to inflation. We solve such situations in 3 working meetings.
A court fee is only the tip of the iceberg; the real cost is management time wasted on preparing testimony.
Procedure duration and decision-making paralysis
The average waiting time for the first hearing in a commercial division in a large city is 7 months. During this time, the company is often in suspension, unable to invest or take out loans because banks see the ongoing dispute in the registers. In March 2024, we saved a transaction on the edge where a lack of agreement between two shareholders blocked the purchase of a new production line worth 1.2 million PLN. Thanks to mediation, which we completed in 18 days, the company managed to take advantage of a grant that expired at the end of the quarter.
At Arka Przymierza, we set the schedule based on the business calendar, not official dates. We usually organize the first meeting within 4-7 days of notification. Statistics from our internal reports for 2023 show that 83% of disputes concerning holdings were successfully completed in less than 6 weeks. This allows regaining control over the operational part of the business in a time when a court would not even have set a date for the first hearing.
Discretion is our standard, not a promise
Court proceedings are mostly public, which means that the competition, employees, or contractors can find out about internal boardroom problems. Information leakage about a dispute over company shares can lower its valuation by 22-26% in just one quarter. Mediation at Arka Przymierza is completely confidential. The final protocol contains only necessary technical arrangements, and all conversations about strategy and the company's weak points stay behind the closed doors of the office at 44 Jerozolimskie Ave.
In 2023, we conducted mediation for an IT company from Warsaw where three founders argued over the direction of expansion. If the case had gone to court, key programmers probably would have left for the competition, seeing top-level instability. Thanks to a discreet approach, no one outside the board knew about the friction. We save transactions on the edge, ensuring the company's external image remains intact. Discretion also allows the parties to withdraw from unrealistic demands without losing face before the team.
A public trial is a gift to your competition, which is just waiting for a signal of a split in the management board.
Hidden costs and opportunity losses
Few people count the hours a president or CFO spends with lawyers on preparing a litigation strategy. Our communication risk audits show that in a complex dispute, a board loses about 14 hours a week on purely conflict-related matters. At a high-level manager's hourly rate, the annual cost of lost time in one of the companies we studied was 87,600 PLN. This is money that did not generate any profit during this time.
At Arka Przymierza, we focus on quickly cutting the knot. We close disputes, we open businesses, which allows redirecting energy back to sales and development. An example is a case from May 2024, where after 4 meetings the parties agreed on the exit terms of one of the partners. The cost of mediation was 34,000 PLN lower than the sum of the fees of two law firms that for half a year exchanged procedural letters without any effect for the business.
