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How to Mediate Your Commercial Disputes: Essential Tips and Points

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When you run a business, you are likely to face various challenges. One common issue is commercial disputes with other companies. Instead of going to court, an effective method for resolving disputes is through alternative dispute resolution (ADR), specifically mediation. This article will outline essential tips and points about how to mediate your commercial disputes to help you navigate conflicts effectively.

Understanding the Mediation Process

In mediation, you and the other party work together to resolve your differences. Businesses globally recognise this process as a voluntary alternative to court proceedings. Understanding the mediation process for commercial disputes is crucial, as is navigating it effectively for your business.

Here is how it works:

  1. Choosing a Mediator: both parties select a neutral third party to act as the mediator.
  2. Planning and Discussion: the mediator meets with both of you to plan the process and hear your perspectives on the dispute.
  3. Negotiation and Settlement: the mediator facilitates negotiation between you and the other party, aiming to settle. This settlement is documented as a settlement agreement. Remember, any agreement reached through mediation is non-binding.

Below, we will outline essential tips for your mediation process.

Essential Tips

  1. Initiate Early Mediation

Start mediation early to save time and money. Commence mediation when issues are apparent between you and the other party before resorting to court proceedings. Your commercial contract may also require early mediation.

  1. Craft Your Opening Statement

During the initial phase of mediation, take time to craft your opening statement carefully. This statement presents your perspective on the dispute and can significantly influence the outcome.

  1. Promptly Draft the Settlement Agreement

After reaching a resolution, promptly draft the settlement agreement while the details are fresh in your mind. This ensures that the agreement accurately reflects the agreed-upon terms and prevents misunderstandings later on.

Below, we will outline essential points of the mediation process.

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Essential Points

If you decide to use mediation to resolve your commercial dispute, understanding how it works can significantly benefit you. Below, we will outline three key points of mediation for your commercial disputes.

  1. Understand the Mediators’ Role

Understanding the mediator’s role plays a crucial part in mediating a commercial dispute. This understanding helps you manage your expectations, preventing you from expecting more than what the mediator can provide. The mediator, who remains impartial, does not make decisions regarding the dispute. Instead, they facilitate discussions between you and the other party, aiding both sides in reaching an agreement. The mediator ensures that the environment fosters active listening between both parties, treating you and the other party equally and fairly throughout the process.

However, some parties are starting to alter the role of the mediator in the mediation process. They request a more evaluative approach, where the mediators determine the strengths of each party regarding the commercial disputes.

  1. Consider Duration

The time it takes to mediate a commercial dispute varies based on the case’s complexity. You and your mediator will decide on the specific steps to take since mediation offers flexibility in resolving disputes. There is no fixed process you must adhere to; mediation typically provides a swift resolution for your commercial dispute. It can conclude within a day, depending on the dispute’s complexity. Also, arranging the mediation process itself might take between two weeks to a month.

  1. Know the Costs

Understanding how costs work for commercial mediation puts you in a better position to decide if mediation is the correct method to resolve your commercial dispute. Mediation is a cheaper alternative to commercial litigation and other dispute resolution methods. The costs involve:

  • mediator fees;
  • mediation-related expenses, such as venue costs; and
  • legal advice expenses for both parties.

Usually, both parties share the mediation costs. If mediation fails and the case proceeds to court, the court may award costs to the winning party. Additionally, sometimes, during mediation, the commercial party initiating the process may offer to cover all costs, which can encourage the other party to agree to the mediation for the dispute.

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Key Takeaways

If you find yourself in a commercial dispute with another business, mediation can be a valuable method to resolve the disagreement potentially. In mediation, an independent third-party mediator helps facilitate discussions between you and the other party to settle. There are several critical aspects of mediation you should understand, such as:

  • mediator’s roles;
  • the duration of the process, which includes a preparation period; and
  • noting the costs associated with mediation and how you and the other party may decide to cover them.

If you need help understanding the mediation process, our experienced disputes and litigation solicitors 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. Call us today on 0808 196 8584 or visit our membership page.

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Clare Farmer

Clare Farmer

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