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If your business has a commercial disagreement with another party, this can result in a commercial dispute. It is often crucial to resolve the business dispute as early as possible to avoid commercial litigation. One way to do this is through an alternative dispute resolution (ADR) method, such as commercial mediation. However, like any dispute resolution process, meditation can have challenges. This article will explain three typical challenges you can aim to avoid in the commercial dispute mediation process.
What is Commercial Dispute Mediation?
Commercial meditation is an ADR method of potentially resolving disputes. It involves the use of a mediator, who is an independent third party chosen by you and the other party. They will encourage you and the other party to discuss ways to settle the disagreement. The mediator does not suggest or credit a resolution for the dispute. Instead, it is up to the parties in the dispute to do so.
This more informal process has multiple benefits, including being:
- impartial;
- independent;
- confidential; and
- flexible in terms of the mediation process.
This guide outlines how to resolve commercial disputes.
What Are Typical Challenges in Commercial Dispute Mediation?
Mediation does not always result in a settlement agreement for the commercial dispute. Sometimes, parties may still resort to litigation if mediation is not successful. To avoid this stage, you should understand the three potential challenges to mediation we discuss below.
1. Difficult Opposing Party
A typical challenge in commercial mediation is that it becomes difficult for you to move smoothly through the mediation process with the other party. This could also occur with their legal representatives, known in mediation as ‘opposing counsel’. Parties to the mediation may, for example, experience a problematic party who:
- acts unreasonably;
- refuses to meet face to face, making the critical initial meeting difficult; or
- is unwilling to reach an agreement.
Naturally, for the mediation process to work successfully, both parties must be able to discuss their problems and suggest resolutions. If this is hindered through poor relations where the other party is challenging, you will be less likely to reach a settlement agreement. You should also note that any issues with your relationship with the other party may not be able to be addressed by the mediator. A mediator must remain impartial at all times. Therefore, they can do little to assist with the difficulty and are unlikely to be able to resolve their behaviour.
2. Lack of Progress
The commercial mediation process usually consists of four stages. These are the:
- initial meeting between all parties and the mediator;
- private meetings between each party and the mediator;
- negotiations between both parties; and
- settlement.
Once your commercial mediation reaches the settlement stage, it is possible that you can find yourself caught in a situation and unable to move forward. This can be a challenge to the mediation procedure. For example, you may not want to make the first suggestion on resolving the dispute. Alternatively, the other party may be unwilling to compromise. A further challenge can be when both parties make an offer, but neither is willing to negotiate. Your commercial mediator will naturally try to resolve this, but their role is limited in how actively they can participate. A mediator may suggest parties to the mediation take a break at this stage or help them consider other ways to resolve the dispute other than through monetary means.
3. Power Imbalance
A typical challenge in commercial dispute mediation is where one party feels less powerful than the other. Where this occurs, it may make you uncomfortable and lack hope in resolving the dispute. To avoid this, you should enlist the assistance of a commercial disputes lawyer. They are able to represent you in mediation, which can give you assurance that you can effectively communicate your views without feeling pressured by a potential power imbalance.
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Key Takeaways
Commercial mediation is one way to resolve a business disagreement. It is neutral, flexible and independent, involving a mediator facilitating discussions and dispute settlement. Mediation, however, does not always result in a settlement agreement for your commercial dispute. Instead, challenges can arise in commercial mediation. These challenges include:
- difficult conduct from the other party;
- a lack of progress within the mediation process; and
- a potential power imbalance between parties.
If you need help understanding typical challenges in commercial dispute mediation. In the UK, LegalVision’s experienced disputes lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. So call us today on 0808 196 8584 or visit our membership page.
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