COMMERCIAL MEDIATION is a process where an skilled, commercially-minded mediator helps two or more businesses or organisations resolve a dispute.
We list some examples of typical commercial disputes that are suitable for mediation below, but almost any dispute can be resolved with a mediator that understands commercial issues and open-minded participants.
The mediator will always seek a mutually acceptable settlement. This ensures the parties remain in control of the outcome and can protect their interests at all times, something we have found to be critical for businesses.
This differs from court, where the outcome is decided by a judge based on arguments and evidence typically presented by the parties' lawyers.
The UK courts are heavily promoting mediation to resolve disputes without court action, describing litigation as a "last resort". This is because mediation offer many advantages, some of which are noted here.
We have provided an outline of how a typical mediation might work here.
Why should you mediate?
Mediate settlements to commercial disputes quickly to avoid
dissatisfied customers, unhappy employees and a risk to your profitability
Protect your revenue and profitability
Disruptions to your supply chain, issues with buyers or disrupted distribution channels can all damage your profitability.
Unless you resolve such issues quickly and get your business back on track, this can soon threaten your ability to continue trading.
Don't give your competitors a chance to steal your market; resolve disputes and focus on running your business.
Maintain customer satisfaction
All businesses rely on the loyalty of satisfied customers. Your customers rely on you to deliver for them.
If your product or service is jeopardised by a commercial dispute, you need to resolve it quickly to keep the trust of your customers.
Ensure you remain focused on your customers' needs and protect the quality of your proposition from shocks in your business.
Keep your team productive and focused
Your people are critical to the running of your business. Disputes will disrupt their focus, reduce productivity and unsettle your team.
If your employees are prevented from doing a great job your business will suffer and you may struggle to hang on to them.
Give your people the protection they deserve and empower them to deliver by resolving causes of dissatisfaction.
Advantages of Mediation
There are many benefits of mediation versus court action
We have highlighted some of the most important below
Mediation is much cheaper than court action
The costs are known and fixed at the outset
Parties are free to determine the outcome of their dispute, giving flexibility and control
Neither party can have an outcome
imposed on them
Everything revealed during the mediation is protected by confidentiality clauses
This preserves privacy, commercially sensitive information and full legal rights
Mediation is usually resolved in one day
and can be scheduled quickly
Court action can take several months and is scheduled by the court
Commercial relationships can be critical to success, even during disputes
Mediation is collaborative, protecting relationships more than adversarial litigation
Mediation takes place at a time and place agreed by both parties
In this way mediation is much less disruptive to busy diaries that court action
Which disputes are suitable for mediation?
All commercial disputes should be settled quickly to protect the business.
Here are some examples where mediation has helped businesses get back on track.
Supplier dispute jeopardised reputation for quality
A dispute with a supplier over the quality of materials threatened a manufacturers' reputation for quality.
Mediation resolved the dispute, ensured future quality and strengthened the relationship.
Founders disagreement threatened partnership
Growing distrust between founders was disrupting sales and the partnership was at risk.
Mediation resolved the dispute, clarified roles, re-energised the partnership and strengthen the management team
Disruption in business-critical software hit revenue
Delays in the completion and disruption to provision of software services led to loss of contracts and revenue.
Mediation resolved the dispute, re-focused the project and shared the risks and rewards of completion.
Contract breach left employees at risk
A breach of contract left works incomplete, threatening the safety of employees and stopping work.
Mediation resolved the dispute, established SLAs and allowed work to resume quickly.
Supply-chain issues incurred delay penalties
Issues with contractors on a large project prevented work continuing downstream causing further delays.
Mediation resolved the dispute, work was resumed immediately and deadlines were achieved.
Professional negligence led to cashflow crisis
A small business was at risk of bankruptcy as professional negligence tied-up much-needed capital.
Mediation resolved the dispute, released funds and allowed the business to continue trading.