If your business is involved in a dispute, you may think court is the inevitable and only effective solution.
But, in fact, you have other options. Options that, you’ll be pleased to hear, are typically cheaper and less time-consuming.
These options come under the term ‘Alternative Dispute Resolution’ (ADR).
Simply put, these are methods used to resolve disputes that don’t involve going to court.
And, having put out a Call for Evidence, it seems the Government is looking to encourage these methods into the mainstream, no longer to be regarded as “alternative”.
So, if ADR is to become the more common route to resolve disputes, we thought we’d run through one of the most popular forms, which is mediation. Plus, show you why it’s a smart move for your business.
What is mediation?
Mediation is a way of resolving a dispute with the help of an impartial third party, known as the mediator.
It’s voluntary and confidential. You are in complete control of the decision to settle and the terms of the resolution.
Mediation is not about deciding who is right and who is wrong, but reaching an outcome that everyone accepts.
Plus, the flexibility of mediation means that it can be done before or even during court proceedings. It’s not an either/or situation, if mediation fails, parties can proceed or continue to court.
Which business disputes can mediation resolve?
When it comes to your business, disputes usually fall into one of two areas: commercial or workplace mediation. Commercial and workplace disputes can come in many forms, but here are the most common resolved through mediation:
Commercial:
- Breach of contract
- Franchising agreements
- Professional negligence
- Partnership disputes
- Fraud
Workplace:
- Breakdown of relationship
- Bullying and harassment
- Pay or contractual disputes
- Clashes of personality
- Communication issues
When is mediation best used by businesses?
If you’re trying to decide what the best method is to resolve your business dispute, we’d say mediation is most effective when:
- You’re in need of a more formal and structured negotiation, since trying to settle the dispute amongst yourselves hasn’t worked.
- You need to maintain a professional and amicable relationship.
- You’ve got a limited time frame for a solution to be reached.
Why is choosing mediation a smart move for your business?
Choosing mediation to resolve a business dispute has various advantages, the most prominent being:
Big cost savings
In comparison to going to court, mediation is significantly more affordable. The cost is usually split between parties and there are typically fewer billable hours involved, which leads us to our next point…
Quicker resolution
With the closing of hundreds of courts and funding cuts, there’s a long waiting list for cases to appear in court. A wait that has only increased as a result of Covid. Mediation can take just days. It can be arranged at short notice and the session itself usually only lasts for 1 day.
You’re in control
Court typically results in a one-sided success. Mediation, on the other hand, can deliver a win-win. Rather than having a decision imposed, you have to approve the decision, and get to design the terms of the agreement to ensure it works for you.
Maintain relationships
Throughout the process and once a resolution has been reached, you may need to maintain, or at least know you can rebuild, the working relationship. Since mediation is about cooperation and reaching an agreement that’s mutually beneficial, there can be less friction that risks ruining a relationship.
Confidential
Whereas court cases are publically available in the UK and often reported upon in the media, mediation is entirely confidential from start to finish.
High success rate
Mediation has very high levels of success, with a settlement rate of 93%.
What happens in mediation?
The process of mediation usually looks like the following:
Select a mediator
Both parties are to agree on a choice of mediator. Although mediators don’t have to be lawyers, solicitors with specialist training are typically the most popular choice, since they’ve got the experience and expertise required to best support proceedings.
Arrange a date and location
An Agreement to Mediate is created which sets out the rights and responsibilities of the mediator and confirms both parties have the authority to settle. A date and location for an in-person or online mediation is then arranged.
The mediation session
Opening statement:
Opening statements outlining each side’s position are usually given at the start of mediation.
Discussion:
Both joint and individual discussions with the mediator then take place to explore possible solutions and attempt to resolve the conflict.
Settlement
When you reach an agreement, the mediator will provide a written document detailing the settlement terms for you to formalise into a legally binding agreement.
If at the end of the day an agreement has not been reached, discussions may continue in the coming weeks. You also have the option of returning to court, safe in the knowledge that any admissions or offers made during the mediation will not be disclosable in court.
To sum up
Unfortunately, disputes can be part and parcel of running a business, and conflicts are bad enough without having to go through a costly, heated and drawn-out process.
Which is why meditation is increasingly becoming a more common route.
Here at Regan Peggs, we have accredited mediators ready to provide you with a confidential, supportive environment to find a resolution. So, if you’re considering mediation or just have a question you’d like answered, give us a call today on 0121 201 3765.
Regan is an accredited mediator and arbitrator. He is a member of the Chartered Institute of Arbitrators and a panel mediator for ADR ODR International. Regan has experience in mediating commercial, family and local political disputes, and representing his clients in those sessions.
Regan is a former Chair of the Board of Directors at the Birmingham Law Society and a former chair of its Criminal Law Committee. He has been a lecturer for law students at the Open University. He is the only defence solicitor in the UK to be regularly invited to address international military students at the Royal College of Defence Studies.
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