Guide to Business and Commercial Mediation

Similar to mediation used in divorce cases and other civil disputes, commercial mediation is typically voluntary and simply refers to the use of a mediator to help settle a disagreement between two or more parties.

A type of Alternative Dispute Resolution (ADR) method, impartial mediators instigate a discussion process that’s designed to help the parties reach an agreeable settlement.

Business mediation therefore refers to the use of an impartial mediator to help settle a commercial dispute and allow both parties to move forward.

Points of conflict might include distribution and franchise disagreements as well as issues associated with business partners or suppliers breaching their contract.

Compared to going to court, there are many benefits to commercial mediation. Not only is it a more flexible arrangement, but it’s also cheaper and quicker.

This is because you can clarify potential misunderstandings, discuss specific issues in detail, and enter the meeting with a view to settling the dispute amicably. In a court setting, the decision is determined on your behalf by a judge, making it a less flexible option with a narrower range of possible outcomes.

Not to mention, taking court action also involves a longer, more expensive (between court, counsel, and expert fees) process that businesses are typically eager to avoid. Commercial mediation can also help to maintain productivity.

As a result, if you’re looking to save time, money, and stress, while also protecting the reputation of your company, business mediation is often your best bet.

Not to mention, if this initial attempt to resolve the dispute amicably doesn’t work, you can always seek court action later.

Weighing up mediation versus negotiation? While negotiation is flexible, it is controlled by the parties with the dispute.

Mediation, on the other hand, involves the presence of a third-party impartial mediator who can help to keep discussion on track and maintain a civil conversation – especially during heated or personal situations.

Commercial mediation is often not a long process – especially when you compare the typical duration of business mediation to court proceedings.

Depending on the complexity of the dispute and the willingness of the parties to come to an agreement, this type of mediation can last anywhere between half a day to two days.

The exact cost of the commercial mediation will naturally vary according to the dispute and the company you choose to mediate. Some mediation services charge an hourly fee, while others will opt for a fixed fee according to the type of business mediation issue.

For a more reliable and accurate commercial mediation cost, it’s always best to contact a solicitor that specialises in business mediation.

At Wilson Browne Solicitors, the first call is always free, so don’t hesitate to contact our experienced team if you’d like to learn more about the cost of our commercial mediation services.

In the majority of commercial mediation cases, both parties will each pay 50 per cent of the overall mediation costs. Payment by both sides acts as confirmation they are committed to finding a resolution, as they’ll effectively be wasting their own money if they’re unwilling to come to an agreement.

Due to the nature of this mediation, you should also bear in mind that VAT is typically added on top of this figure. However, you will be able to claim this money back if your company is also VAT registered.

Put simply, yes, a solicitor can come to the mediation discussions.

In contrast to seeking court action and a judge to resolve your dispute, a qualified and independent third-party mediator is all you need to start the mediation process.

This mediator can be from a specialist ADR service provider or any solicitors that offers conflict resolution.

You can either choose to have a solicitor act as a mediator or ask your solicitor to provide you with legal guidance at different stages of the process.

While it’s true that mediators will have a basic understanding of the law and how the UK legal system operates, they are unlikely to be as well-prepared and knowledgeable about specific areas of commercial law as a dedicated business solicitor.

Not to mention, they cannot provide you with all-important legal advice because they are impartial. Regardless of which mediator you choose to oversee discussions, they must be impartial to ensure a fair discussion takes place and neither party feels outnumbered during these open discussions.

Here at Wilson Browne Solicitors, we’ve helped countless clients reach an amicable commercial agreement by offering expert legal guidance.

Instead of creating an agreement for you, we ask the right questions and provide the best advice to allow you to resolve business disputes in a way that works for both parties.

According to a 2018 study known as ‘The Eighth Mediation Audit’ carried out by the Centre for Effective Dispute Resolution (CEDR), the overall success rate of commercial mediation is very high.

It found that an impressive 86 per cent of all commercial dispute cases were settled using the mediation method, with an aggregate settlement rate of 89 per cent. Plus, it added that an incredible 74 per cent of the cases that achieved a settlement managed to reach this agreement on the day of mediation.

Plus, if you don’t manage to settle on the day of mediation, all is not lost. An additional 15 per cent of commercial dispute cases manage to settle not long after mediation. With the many benefits of business mediation, it’s easy to see why mediation is often preferred to alternative methods.

For many, the most difficult part of commercial mediation is simply starting the process.

If the dispute is of a particularly personal nature, money is no object, or one party feels particularly confident that they would receive a more favorable outcome by taking court action, mediation can be hard to accept.

However, once it is accepted, the significant success rate of commercial mediation highlights just how quick and effective this method can be.

If you’re struggling to accept the move towards business mediation, please feel free to get in touch with our helpful team to learn more about the many benefits of taking this approach.

Despite commercial mediation often being successful, there are still some business disputes that cannot be settled in this manner. However, there are some ways that you can increase your chances of reaching a successful agreement, either during or quickly after mediation.

We explore the common mistakes made in mediation below, so you know exactly what to avoid when you come to settle your professional dispute.

As the old saying goes, if you fail to prepare, prepare to fail. While mediation is an amicable discussion held between two parties made in an attempt to reach a settlement, you’ll still need to spend time preparing for this meeting.

You should evaluate everything from the potential arguments the other party is likely to make to your opponent’s chances of succeeding at court. Not only will this preparation save time during the discussions, but it’ll also demonstrate a respect for the other party’s time, supporting an amicable discussion.

While it’s important not to completely succumb to the wishes of the other party, your opening offer must still be thoughtful and reasonable.

If your initial offer is too low or high, the other party may feel insulted, especially if you’re unwilling to make a significant move from this first offer to meet them in the middle.

The wrong offer can come across as unrealistic or downright offensive, threatening the success of the session.

An experienced solicitor is used to being on both sides of the mediation bench, so it’s crucial that you discuss any offers with your solicitor before putting your cards on the table.

As well as avoiding unreasonable offers, you should put extra thought into your best and final offer.

If you continue to change the goal posts on your final offer, you’ll lose credibility and indicate that they can continue to push their agenda.

This is especially true if you make an ultimatum during the mediation. If something is a dealbreaker, you need to make this clear from the offset to avoid wasting time.

If you choose to use a third-party mediator without the support of a solicitor, you may miss out on crucial legal advice.

A mediator cannot offer the same legal guidance because they are impartial, and therefore it’s recommended that you contact a solicitor to help you prepare for the mediation meeting.

Once you’ve supplied your solicitor with all the information surrounding the case, they should be able to advise the best way forward by helping you to consider the cost, time, and stress that would be involved in going to court to settle the specific dispute.

Once you’re aware of all the risks of not coming to an agreement, you can then make the best decision during mediation.

Enlisting the help of a professional solicitor is essential, so it’s just as crucial that you opt for a solicitor with significant experience in mediation. This is because mediation is a world apart from negotiation. Instead of being combative and argumentative, a good mediation solicitor should be understanding and empathetic.

Get in touch today to schedule your free consultation.