The process of commercial mediation is often overlooked in a potential or actual litigation situation. There seem to be several reasons for this, firstly that in a litigation situation, matters, even in a business context, can become very personal very quickly, and positions become entrenched. Secondly, there appears to be a lack of understanding of commercial mediation and it’s benefits.
How mediation works
The starting point is that there is no requirement or absolute set procedure for mediation, so it is inherently flexible, and simply requires parties to a dispute to agree to the mediation, to contribute to the mediator’s fees and to have an open mind. Most mediations last 1 day or 2 at most, and will normally take place at an independent venue with the parties, and potentially their advisors in attendance.
Formal or informal mediation
This short guide focuses on a more formal type of mediation. However, there is always the possibility of an informal mediation where lawyers haven’t been involved. If there is willingness between parties to a dispute to involve an experienced, independent mediator, this can be done right at the outset. I am always happy to try and help in the most sensible, cost effective way.
The mediator will seek to resolve the dispute with the parties by a degree of shuttle diplomacy, seeking to find common ground and to “separate the people from the problem”. Crucially, the mediator is completely independent, trained in how to try and bridge differences. With a legally qualified commercial mediator, such as David Swede, he or she will have a grasp of the issues whilst not approaching the matter like a Judge, and with no fixation on the law. One of the key skills of a good commercial mediator is to be a good listener and to ask questions of the parties.
Mediation is non-binding and confidential
Also crucial is to understand that any mediation is entirely confidential, is non-binding unless and until the parties agree a legally binding “memorandum of Agreement” and the fact a mediation has taken place or discussions and disclosures in the mediation cannot be disclosed to a court if the mediation fails. They are accordingly “without prejudice”.
Mediation is advisable at an early stage of a dispute, but can take place at any time up to a court trial outcome, so should be borne in mind as a possibility at all stages.
Benefits of commercial mediation
- These are generally considered to be:
Once the parties have agreed to mediation, statistically around 85% of cases settle via mediation
- Cheaper and faster than formally litigating through the courts
- Seeks to find a mutually acceptable outcome rather than an outright winner or loser
- Mediation is “without prejudice” and not binding unless formal agreement reached
- Even if it fails the each party has a better understanding of the other party’s position
- Convenience – the court process can be slow, frustrating and full of argument as to procedure, legal rules and point scoring, generally at the clients expense!
- Mediation is private and avoids publicity
- Particularly useful as an early stage way of resolving disputes between shareholders
- A sensible and commercial way of resolving disputes
As an accredited commercial mediator, I can be instructed either as a mediator or as legal representative for a party in a mediation, although not both at the same time! Please contact me either by email or by telephoning 0208 951 6666.
Haven't found what you need yet?
Why not search the whole site?