Mediation is one of the main tools used to resolve commercial disputes as it allows parties to come to a timely resolution. With the assistance of an impartial third party who acts as an interface to promote compromise, resolution can be achieved more quickly and with less cost compared to traditional litigation.
In most jurisdictions, you are required to mediate either prior to commencing proceedings or as a mandatory step in the litigation process. Early mediation can assist in narrowing the parameters of the dispute and determine what the issue at hand really is. In some circumstances, a matter might require litigation but the nature of that litigation, the time required, and the costs of litigation can be greatly reduced.
10 reasons why you should consider mediating a commercial dispute at the first opportunity
1. Time
Mediation can be organised quickly and convened at a time that is suitable for all parties.
The advantage of mediation is that you do not have to wait for court processes to play out or for the matter to reach the mandatory mediation stage of the litigation process.
2. Cost
Mediation will cost a fraction of the price of traditional litigation. Generally, parties share the cost of the mediator and the venue. The cost savings can allow parties to spend more time preparing for mediation which is far better use of resources.
3. Control
Parties to the dispute have greater control over how it is resolved and on what terms.
In mediation, you can manage and shape how the resolution takes place, on what terms, and how it is documented. It allows parties to make decisions based on compromise rather than having the decision imposed upon you.
Commercially, imposed decisions might be difficult to implement in uncertain economic times.
4. Confidentiality
Mediation is confidential and covered by settlement negotiation or without prejudice privilege.
This means that you are free to make offers or proposals that you might not normally do in litigation.
All negotiations and offers are confidential and cannot be reported at a later time to a court or relied on as evidence.
5. Comfort
It makes it much easier to make decisions or accept compromises when you are in a good head space and have the ability to think without feeling pressured.
Parties can choose their mediator based on:
- whether they feel comfortable with that person’s expertise;
- their knowledge of complex commercial areas of law; and
- the decisions that need to be made.
Sometimes the venue can also make you feel comfortable as some people prefer to be on neutral ground rather than at the office of a particular law firm.
6. Low-pressure
Mediation does not mean that everyone has to be in the same room as everyone else.
It is common in commercial matters or where there has been significant conflict for parties in dispute to be in separate rooms or to only be in the same room for limited periods with their legal representatives or support persons.
Shuttle mediation is a popular format where a mediator travels between parties in separate rooms to discuss compromises or offers to settle that have been made.
7. Impartiality
Sometimes people can feel disempowered during dispute or as part of litigation.
Mediation is a fairer process as the mediator is not there to make a decision. The mediator’s role is to be an impartial facilitator to assist parties to reach a compromise that everyone can live with.
8. Less stress
Mediations are much less stressful than going to court.
Court is an adversarial process where, depending on the jurisdiction, if you are unsuccessful you might end up having to pay the other party’s legal costs as well as your own legal costs.
Mediations can occur during certain times and you are able to take breaks if you feel stress rising or pressure mounting.
9. Quicker outcomes
Mediating the dispute means that not only will you have better control of the outcome, but that the resolution can occur much faster than court processes where you may have to wait on a judge to make a decision. In some cases, due to judicial workloads, this could be many months or even years depending on the complexity of the dispute.
10. Enforceability
The advantage of a mediation is that if resolution is reached, it can be documented in a format that is easily enforceable and can bring about finality quicker than a court process.
This means that opportunities are not lost after a matter is resolved and you can get on with other things so that you do not lose competitive advantage or commercial prospects that could be neglected during a long, drawn out litigation process.
How a mediator can help you
Mediation is essentially inserting a human buffer between parties to a dispute to help resolve it where negotiation and communication has broken down.
Some people may feel that they cannot properly communicate with the other party or organisation they are in dispute with. There might be an issue of a power imbalance as a result of the size and nature of a commercial entity over owners of small to medium business enterprises.
A mediator is trained to:
- communicate with parties;
- identify issues;
- develop options; and
- support all parties to reach their own decision about how to resolve a dispute.
A mediator may assist you to resolve and rebuild commercial relationships, or to forge even better commercial relationships for the future.
If you need a mediator, contact Andrew McCormack on amccormack@thymac.com.au or call (07) 3231 8859.
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