Resolving commercial disputes
25th May 2017
Fast-growing companies can get seriously slowed down if they face a commercial dispute so what is the best way to resolve one?
Mediation may be the answer.
Mediation allows the two sides in a dispute to explore ways to reach a negotiated settlement through the use of an independent third party.
It may take place at any time but depending on the case, the best time may be just before legal proceedings are issued, after statements of case, or expert evidence is exchanged where the parties have a clear idea of each other’s positions.
Those taking part have a free choice over who will be the mediator and where the mediation will take place. What is discussed during the mediation and the terms of any settlement are kept confidential.
This could prevent potentially sensitive commercial information or outcomes being made public and will prevent any reputational issues from being aired during any public trial.
Parties in mediation can negotiate flexible outcomes, for example obtaining credit notes, performing works for no extra charge, and exploring new business opportunities to allow parties to preserve business relationships – something which is crucial in the current market.
When it comes to international trade, multi-jurisdictional disputes may be resolved more simply during mediation because preliminary issues about jurisdiction may be avoided.
In addition, the mediation process allows culture and language obstacles to be overcome as bilingual mediators may be selected and parties can address one another in a collaborative environment rather than in a confrontational situation at court.
The focus is on resolving the issues between the parties and decision makers take an active role in negotiations to find a solution. A forward thinking approach may free up any stumbling blocks to settlement.
Ultimately, the disputing parties are in control of the decision to settle and the terms of resolution but mediation may encourage openness about each party’s strengths and weaknesses of their case, manage expectations, encourage parties to have empathy for each other’s positions and to work together to come to an amicable and commercial resolution.
Although mediation does not always result in a resolution on the day, quite often the effect of having the parties focused their minds on the issue means that a resolution is reached soon after.
With courts now imposing costs sanctions if a request to mediate is refused unreasonably, the problem-solving approach of mediation together with confidentiality in the discussions makes it an attractive and commercial method for resolving business disputes and getting the focus back on growing the company.
* This article first appeared in the Ward Hadaway Greater Manchester Fastest 50 Awards Supplement 2017.
For more information on the issues raised, please contact Elaine Chan.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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