Mediation, a Better Route than Litigation?
Mediation, a Better Route than Litigation?
If your company has become embroiled in a commercial dispute where the parties’ positions have become entrenched and the matter is heading towards litigation in Court then Mediation could be a way forward.This is the moment to step back and consider whether litigation is the best course of action or whether mediation could be a much better solution.
The evidence in favour of this is clear since over the last 30 years, mediation in the UK has grown to a £9billion sector and this trend looks set to continue. In March 2015 the UK Government increased civil court fees dramatically, so that claims worth over £200,000 are now subject to fees of up to £10,000 – a dramatic increase on the previous figure of £1,515. So the cost factor alone is likely to drive businesses, especially SMEs and start-ups to seek mediation as a first port of call.
The Benefits of Mediation
- Commercial mediation is a flexible and cost effective way of solving almost any form of commercial dispute and can deliver results more attractive to the parties than going to Court.
- It is fast; a typical commercial mediation lasts only a day, sometimes half a day is enough.
- Mediation will usually require the parties to treat all discussions as confidential. This is on the basis that nothing discussed can be used in any subsequent court proceedings.
- Compared to litigation it could be less expensive.
Why does Mediation Work?
Mediation is an amicable, informal way of meeting and deciding your options because;
- The parties control the outcome.
- They choose to be there.
- They have a chance to explain their points of view.
- It is their choice, not the Court’s, whether they settle and if so on what terms.
- It works – the vast majority of commercial mediations settle successfully on the day.
- Settlements reached by the parties in mediation are on terms that the parties have chosen to agree.
- It can deliver solutions that are not always available from a Court and which respect the parties’ commercial interests, not just their legal rights.
How does Mediation Work?
- A Mediators’ role is to facilitate negotiations between the parties.
- They are strictly impartial.
- They do not tell the parties what to do.
On a practical level
- It gets all the relevant people in the same place at the same time enabling them to focus on delivering a solution that works.
- Parties know that they can talk in confidence to the mediator about what they hope to achieve and how a dispute can be resolved knowing that the mediator will not pass that information to the other side unless specifically authorised to do so.
- The mediator can help generate new potential solutions that deal with the concerns of both parties in a way that might not be otherwise considered at all.
- It facilitates the exchange of information and gives the parties a chance to ‘have their say’ in a way not often available to them at court.
- It gives the parties a chance to get matters “off their chest” in a confidential environment.
What will actually happen in the mediation?
Mediation can take place in a variety of ways depending on the wishes of the parties involved:
- No direct contact between parties who are in separate rooms with the mediator shuttling between them, a face to face negotiation or a mixture of the two.
- The norm is to start with the parties separated as this enables options to be discussed in confidence and gives the time needed to build the level of trust necessary to deliver a mutually satisfactory solution.
- After a successful session a summary of the agreement will be drawn up and signed by the parties and steps taken to terminate any litigation.
Do You Need Legal Representation?
- Mediators are not allowed to give you legal advice and if the dispute has already reached the stage where litigation is in train then solicitors will probably be involved in the mediation.
- It is sensible to get legal advice to give you an idea up front of the outcomes that litigation could deliver and during the process so you can make informed decisions.
- In any event your agreement will need to be checked and converted into a binding agreement.
Should I Act Now?
As with any problem in your business doing nothing and hoping it will just go away is the wrong course of action. The sooner the issue is addressed the better the likely outcome. If you would like an initial chat then contact me.
DISCLAIMER This blog / article is for information and interest only. It is not a substitute for full professional advice, which will take account of the specific and individual circumstances surrounding your matter. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.
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