Preserving commercial relationships – an advantage of mediation

Mediation can be a very effective way of resolving a dispute.

Although there is no requirement for a party in dispute to agree to it, the courts are very keen to promote both it and other forms of alternative dispute resolution. They require both sides at all times to try to reach a settlement, both before and after proceedings have commenced and up to any trial or final hearing. If a party offers mediation the court may penalise the other side if they do not consider it. 

The advantage of mediation in a commercial dispute, particularly before proceedings are issued, is that it gives both sides the opportunity to settle the disagreement between them, instead of taking the issue to court.

This distinction is in our view extremely important for two reasons:

• The terms agreed can address all of the issues and can therefore be much wider than any order imposed by the court. In contractual disputes the court will usually limit itself to an order for damages or injunctive relief.
• From a commercial point of view there is scope in the course of a negotiation to go into the issues which caused the dispute and for both parties to compromise, in order to reach a settlement. By doing so, they could preserve what may be an important commercial relationship which would almost inevitably break down should the dispute go to trial.

Mediation is a much quicker and less expensive process than court proceedings. If the matter reaches court, it may go on for years and is likely to be prohibitively expensive with an uncertain outcome. A successful mediation will result in a written agreement which will be legally binding on both parties and enforceable by the courts.

We understand the importance of preserving business relationships and have a team of experienced mediators who would be happy to talk you through the process.

Nick Southwell is an accredited civil and commercial mediator as well as an experienced litigator who handles a range of commercial disputes. These include contractual disputes, landlord and tenant matters, property disputes and professional negligence claims.