Why should you consider business dispute mediation instead of litigation? May 18, 2021

Business dispute mediation can deliver quick and effective results for a fraction of the cost of litigation

The COVID-19 global pandemic has caused immense disruption as individuals and businesses alike have had to adapt to what has become Covid normal. Businesses, in particular, have had to be agile, operating in new and different ways just to survive. One good example is business dispute mediation as an alternative to litigation.

What is mediation?

Mediation is a form of alternative dispute resolution which aims to resolve a dispute.  A qualified impartial person called the mediator is appointed. Their role is to facilitate discussion between the parties. The mediator does not make decisions or advise the parties, but rather explores possible resolutions with each party.

Mediation can be conducted without the parties prejudicing their legal rights if they do not settle at mediation.

What are the benefits of mediation?

Mediation can be more cost-effective in resolving a dispute than formal litigation. This is particularly true when you consider the costs of a legal action are almost always never fully recovered.

Whilst mediation does involve expense, such as the cost of hiring a mediator and legal costs to a solicitor, these costs are mitigated by the productive use of time management and certainty of outcome that mediation allows. Parties can express their positions clearly and negotiate productively.

It is often as a result of poor communication that matters can escalate into costly and time-consuming litigation.  In some rare cases, depending on the complexity of the issues in dispute, it may take more than one business dispute mediation to achieve a sensible commercial resolution between the parties.

Additionally, mediation is far more flexible than litigation. Parties are able to work together to reach a resolution that the court may not have the power to make.  At its core, whilst a resolution is not always found as part of the mediation process, it allows parties to act without being restricted by the formal legal process.

Mediation can also be conducted on a completely confidential and without prejudice basis if all parties agree.

Is mediation enforceable?

Usually, a successful mediation will result in a settlement agreement, which will be binding upon the parties. It is therefore important that a settlement agreement is prepared by an experienced solicitor familiar with the matter to ensure that your interests are best protected.

A settlement agreement is governed by the principal of contract law. Any serious breach may result in the termination of the agreement on the grounds that the other party repudiated the agreement. The injured party can sue for damages, or alternatively, they may seek specific performance of the agreement (and possibly also damages).

In some cases, where a party fails to pay the settlement sum, the other party may apply to the courts for a judgment in relation to the unpaid settlement sum.

How we can help

We can guide you through the entire mediation process. Our litigation lawyers have significant experience in commercial litigation and they understand the realities that businesses face in this new Covid normal world.

Contact us to learn more about business dispute mediation.

This article was written by Special Counsel, Alex Di Blasi and Law Graduate, Zoe Pinch.

DISCLAIMER: We accept no responsibility for any action taken after reading this article. It is intended as a guide only and is not a substitute for the expert legal advice you can receive from marshalls+dent+wilmoth and other relevant experts.