• Avinder Laroya

In A Dispute? 5 Key Benefits of Commercial Mediation

Updated: Feb 8, 2021

Who should read this?

This article is useful for business owners, entrepreneurs and team managers who are seeking useful tips to resolve conflict with little disruption to daily operations. Disputes can severely impact upon operations, relationships and the business as a whole. This is why timely and effective dispute resolution is a vital resource of any commercial relationship.

Commercial mediation is a form of Alternative Dispute Resolution, designed to resolve disagreements and disputes in a wide range of business scenarios. An impartial mediator, whose purpose is to facilitate discussions between parties, is appointed. Unlike other forms of dispute resolution, such as court litigation, the final agreement on how to resolve the disagreement is down to the parties involved, with the mediator remaining neutral throughout.

This article will highlight 5 key benefits of the commercial mediation procedure and look at how disputes can be resolved without the need to enter court litigation. Mediation is an alternative dispute resolution procedure which can assist to reduce cost and time to resolve disputes which are useful to ensure business continuity, reputation and overall success can be maintained.

In this article we will explore the following:

1. The flexibility of the mediation procedure

2. The opportunity to preserve relationships through mediation

3. To partake in the settlement discussions

4. Confidentiality of the process

5. The opportunity to resolve matters quickly and reduce costs

1. The flexibility of the mediation procedure

When you consider all the variables involved in a commercial dispute, flexibility becomes vital. Less flexible resolution methods, such as court litigation for example, follow strict rules and a pre-determined structure with little room to consider the requirements of the parties outside of the legal structure. Mediation, by comparison is a flexible procedure which allows the parties to be involved in the decision making process, to allow for alternative solutions to be considered such as an apology or expressions of feelings that court litigation would not take into consideration as being an important driving factor in the case, mediation allows for “out of the box” thinking for resolution.

2. The opportunity to preserve relationships through mediation

One of the fundamental benefits of mediation is that parties have the opportunity to be a part of the decision-making process of the settlement through the mediator who is a facilitator of discussions. Often in mediations emotions are expressed and healed leading to an opportunity to salvage commercial relationships and find alternative ways of working together if the parties wish to do so.

Not all parties may want to continue a commercial relationship with the other party, however, unlike other dispute resolution procedures, mediation allows the parties involved to be in control of discussions and if desired by both sides a settled outcome, which can potentially encourage better working relationships going forward.

3. To partake in the settlement discussions

During the mediation, the mediator encourages contributions from both sides to partake in the discussions and if agreed to a settled agreement. Compared to both arbitration and court litigation, the decision is made by appointed arbitrators or the presiding Judge who will review the legal facts and the arguments presented before them and then make a legally binding decision which the parties have to accept.

Mediation, however, allows the parties to discuss their issues and what outcomes they would ideally like in the settlement. The mediator’s role as facilitator is to work with the parties to help them come to a settlement that they can both live with. The important factor to consider with mediation is that both parties have to be prepared to compromise and the mediation is a procedure that allows their issues and concerns to be heard to find common ground unlike court litigation where the parties have little or no direct involvement in the decision making process and therefore a risk that neither party will be comfortable with the binding judgement or award.

4. Confidentiality of the process

Confidentiality is particularly important in mediation to enable parties to participate fully in the process.

There are two levels of confidentiality, firstly in the discussions and information disclosed during the mediation and secondly, the private meetings between each party and the mediator.

The mediation procedure is confidential, discussions and information disclosed during the mediation cannot be used against the other party in a court litigation if the mediation proves to be unsuccessful.

Under English law the proceedings are confidential both between the parties and the mediator, therefore even if the parties agree for matters to be referred outside the mediation, the mediator can enforce the confidentiality provision. The English courts will generally uphold the confidentiality except where it is necessary in the interests of justice for evidence Savings Advice Ltd and Zinc Consumer Ltd v EDF Energy Customers PLC SCCO REF: PHW 1604049

5. The opportunity to resolve matters quickly and reduce costs

Mediation is a non-adversarial process and allows the parties to dictate the pace of the discussions and any settlement. By contrast, court litigation has to follow strict procedures and processes which are determined by procedural rules which can be timely.

Resolving commercial disputes has the potential to be extremely costly, particularly if court litigation proceedings take a considerable time to provide a decision. Mediation, on the other hand, is usually a much faster and cost effective method of resolving disputes.

How can Serenity Law Support Your Business Through Mediation?

At Serenity Law, we’re experts in mediation. In fact, co-founding partner, Avinder Laroya, is a CEDR Accredited Mediator and CMC member, with experience in multi-jurisdiction ADR and cross-border disputes. Whether your commercial dispute is between directors or shareholders, employees or suppliers, Ms. Laroya aims to facilitate supportive resolution and help parties find common ground.

Are you considering litigation to resolve a commercial dispute? Before you proceed with the costly and often lengthy process, book a free consultation with Ms. Laroya to discuss the benefits of bespoke commercial mediation in more detail.

Who are we?

Serenity Law is a digital law firm, offering commercial legal services to businesses ranging from entrepreneurs to large corporations. Our unique virtual model allows us to offer agile legal services to clients across the globe, by our team of experienced and knowledgeable solicitors.