Commercial disputes: why mediate?

In my previous legal update we discussed what is mediation? Now we turn to the equally important question of: why mediate?

A key thing to note is that Mediation can be undertaken at any point in a commercial dispute, from the very beginning until you are almost on the courtroom steps going into trial. It is a step which can be taken before lawyers become involved, or before a dispute enters formal litigation.

Courts are putting more emphasis on parties engaging in Alternative Dispute Resolution (ADR), which is largely read to mean mediation, rather than focusing on moving directly towards a trial. Courts do also have the power to order parties to actively participate in ADR/mediation at any time during litigation, all the way up to trial. Of course, not all cases are suitable for mediation, although as noted by “Experience shows that mediation is capable of cracking even the hardest nuts” (see DKH Retail Ltd and ors v City Football Group Ltd [2024]).

This shift in focus of bringing ADR and mediation into the mainstream process of litigation can also be seen from the requirement for parties to seriously consider ADR prior to issuing proceedings. There is also movement to rename Alternative Dispute Resolution to ‘Negotiated Dispute Resolution’. Sir Geoffrey Vos, Master of the Rolls, and a great proponent of this approach, has noted that options such as mediation are not alternative to litigation but an integral part of the process.

Irrespective of the Courts’ position on mediation: why should you mediate?

What will mediation do for your business and your dispute that makes it worthwhile? Mediation is a useful and proven tool for resolving disputes, and there are many advantages to mediation over litigation and a trial.

Remedies

• A mediation can achieve any resolution the parties wish, whereas a Court is constrained to certain remedies – in most cases this is monetary – which cannot take into account wider commercial considerations.
• Particularly useful where you wish to maintain a working relationship with the other party or where money will not ‘fix’ the problem.

Certainty

• There is certainty and control in the outcome at mediation – nothing is decided at mediation unless all parties agree to it, unlike a judgment which is handed down whether the parties like it or not.
• A level of certainty and control allows parties to work together to achieve a better solution which everyone is accepting of, rather than risk finding yourself on the losing side of a Court judgment.

Choice

• There is choice – choice of mediator, of venue, of date and time of the mediation.
• With a trial, the judge is assigned to your matter and you are given a trial date; and if that date is inconvenient, for example because your barrister cannot attend on that day or it’s your ultra busy period, well that’s tough and you have to make do.
• In mediation you can select a mediator with background or experience in your industry, so you know that they will be best placed to understand intricacies of your dispute. Rather than a trial judge who rules on a wide range of matters but may not have industry specific knowledge.
• Mediation allows the parties to make arrangements that suit all of the parties. This reduces wasted time and costs, and can allow the parties to work around their own business needs.

Privacy

• Mediations are private and confidential.
• Trials are open to the public, which means all of the details in dispute are too – this can be everything each witness has said, your companies’ business practices etc
• Keeping all of the details of a dispute confidential can be vital in keeping your business functioning and prosperous.

Finite

• There is no right of appeal – once a Settlement Agreement is struck that is the end of the matter. There is no waiting to see if the other side wishes to appeal, no further trials, no overruling of the first decision etc.
• A successful mediation can therefore mark the true end date of a dispute, rather than potentially just another hurdle.

Speed

• Mediations are faster than going all the way to trial – taking a matter to trial can take upwards of 18 months from issuing the claim.
• Mediations take far less time to plan, and with the widespread choice of mediators, you do not have to wait months for a slot to mediate as is the case with trials.

Costs

• Hand in hand with speed is cost – mediations are far cheaper than trials. Trial is the most expensive part of the litigation process, so a successful mediation at almost any point before trial will save the parties money.

Mediation is an excellent method of bringing parties to the settlement table in a way that allows settlement to be reached without loss of face and a costly, protracted trial. A mediator takes the drama out of settlement and allows commercial solutions to prevail. It saves parties time, cost and gives a level of flexibility and control over the outcome which is impossible to achieve via trial, and which can be instrumental to the continuing success of your business – there are no losers in mediation, just commercial solutions for everyone.

If you have a dispute that you think may benefit from mediation, please contact a member of our highly experienced Dispute Resolution Team.