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When you fall into a commercial dispute, you must find a way to overcome it so your business can progress smoothly. However, choosing to litigate immediately can be very costly. As a result, it is helpful for you to consider an alternative dispute resolution (ADR) method such as commercial mediation. In order to have a successful mediation and reach a settlement agreement, you should be as aware of its common challenges as its process. This article will explain three key tips for overcoming common commercial dispute mediation challenges.
What is the Commercial Mediation Process?
Commercial mediation is a popular, flexible and informal method of trying to resolve your commercial dispute. It is a form of alternative dispute resolution (ADR) used globally as an alternative to court proceedings and is confidential. Parties to a commercial dispute will appoint an independent mediator to facilitate their discussion. It is crucial to note that the mediator will not make a decision on the dispute on your behalf. Thus, it is up to you and the other commercial party to do this, and the mediator will simply guide you in doing so.
As the commercial mediation process is flexible, there are no rigid procedures. However, often, it will begin with an initial meeting between you, the other commercial party and the mediator. Here, the mediator will explain the process, and you and the other party present your opening statements. The process then moves onto private meetings between you and the mediator to discuss your agreement. The other party will also have a chance to meet privately with the mediator. Following these meetings, you will both suggest offers to each other through the mediator. Mediation should, if successful, end in a settlement agreement.
This guide outlines how to resolve commercial disputes.
What Are Some Common Commercial Dispute Mediation Challenges and How Do I Overcome Them?
As noted above, the ultimate goal of mediation is to reach a settlement agreement with the other party. In other words, you are seeking a mutually satisfactory result. Therefore, it is essential you overcome possible challenges to this reciprocal process. We explain three potential obstacles below and how you can overcome them.
1. Failure to Meet Initially
The initial meeting between you and the other party is extremely important. It gives you a chance to present your opening statement and helps you better understand the other party’s position. However, a common issue in commercial mediation is that parties fail to meet initially. This can occur if the other party refuses to meet you at the first stages of the mediation.
A way to overcome this issue is to have your legal representative meet with the other party’s legal representative and the mediator. This means that the mediator does not have to pass each argument second-hand. A mediator may continue to try to persuade you and the other party to meet, even if this only occurs at a settlement agreement.
2. A Party With Ulterior Motives
Sometimes, during mediation, a problem can occur where the other party has an ulterior motive. This is because the mediation process compels you to give the other party information about your argument, which may help them understand your views. However, this can mean that the other party agrees to the mediation purely to use this information for unethical reasons. For instance, they may be using mediation to find out about your assets with the intention of taking you to court and receiving a binding judgment later.
If you do face this problem, then you should act very carefully. Your lawyer will advise you, and the mediator should talk it over with you. A good mediator will also ask the other party why they are asking specific questions or presenting their arguments in a certain way. You will then know whether it is a good idea to proceed with giving the information or not.
3. Refusing to Budge on an Offer
A common problem that can occur in meditation is when you and the other party have made an offer towards settlement, but neither of you refuses to compromise. This causes a deadlock in the mediation process. If you face this problem in mediation, you may try to overcome it by:
- reconsidering your position with your mediator using your BATNA (Best Alternative to a Negotiated Settlement);
- considering splitting the difference;
- asking the mediator to consider non-monetary solutions;
- requesting a break to gather your thoughts; or
- having the mediator suggest the meeting be adjourned for another day.
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Key Takeaways
The mediation process for commercial disputes is a form of alternative dispute resolution (ADR) procedure. It is a flexible and confidential process and consists of an independent mediator. Their role is to facilitate both parties in finding a decision. The process usually begins with an initial meeting and, if successful, ends with a settlement agreement. To ensure the latter, you must understand tips for overcoming any mediation challenges. Some common problems you may face are:
- a failure to meet initially, in which case you should organise for the legal representatives to meet instead;
- the other party having ulterior motives, such that you should be careful; and
- a refusal to compromise, where you should consider how you can renegotiate your interests.
If you need help with overcoming a challenge in your UK commercial dispute mediation, LegalVision’s 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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