A beginner’s guide to mediation – is it right for you?

30 Jun 2017

By its very nature, dispute resolution can uncover a few hidden surprises along the way, particularly when it comes to cost. But with careful planning, mediation can be a very cost effective way of resolving issues, whether they have been a long time in the making, or have suddenly occurred.

When disputes arise in business it can be time consuming, costly and quite often have a devastating effect on the performance and profitability of the business, so it is important to resolve them as quickly as possible. Mediation is one of the ways that a resolution can be achieved and the psychological impact is very positive. A successful mediation will allow the business owner to focus on the business rather than become embroiled in a lengthy litigation battle which can result in its demise.

What is mediation?

A mediator is an independent person who is appointed to help resolve issues between two or more parties, with the purpose of reaching a settlement agreement outside of court. They will ask questions to help uncover any underlying issues, clarify those issues, challenge strengths and weaknesses and make clear the options of resolution, but will not pass judgment or comment on the merits of the case. The process is carried out in a strictly confidential environment.

The process is made easier if the parties involved want to reach an amicable conclusion and find the best way forward, so is especially useful if the parties are looking to continue to work together in the future.

While in a court case a judge can simply make an award of, say, £50,000, in mediation, for example, parties can be more creative and structure settlement terms on a much wider basis that may help maintain the relationship between the parties. For example, rather than a lump sum payment of £50,000, settlement terms could be agreed that one party must give the other a minimum number of orders per month, on which the purchaser will pay 10% above market rates, until the sum of £50,000 is paid in full.

What can be expected from the process?

A typical mediation will generally follow a fairly standard procedure, but can be as fluid and tailored as the parties and mediator desire. The parties generally start in their own rooms, before coming together with the mediator for an “opening session”. After that, the parties will retire to their own rooms whilst the mediator shuttles between them trying to broker a deal. At various stages the mediator may decide to get the parties, without lawyers, or just the lawyers together to discuss certain issues to help encourage settlement.

A mediator cannot influence, but always works towards one goal – a positive outcome. They must remain a neutral third party and the solution must come from the parties involved rather than be forced upon either of them. Nothing will be settled unless all parties are in agreement, which is then recorded in a formal settlement agreement.

Not only does this reduce tension, but mediation is often preferred as it can lead to more suitable outcomes. Even if no agreement is reached, parties will often settle shortly after a mediation, but if not they are still free to instigate or continue any legal proceedings if they wish. Mediation can also be recognised as a “speedier” alternative, as some issues can be resolved in a matter of hours.

Is it right for you?

The earlier on in the dispute process that you decide to pursue mediation, the more effective it can be. A successful mediation can also save you time and money.

Mediation is a process we often recommend at DMH Stallard, for large and small businesses, as part of our dispute resolution services. If you would like to know more, contact us today for more information.

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