Resolving Commercial Disputes at Mediation: 5 Steps to Prepare
Businesses who find themselves embroiled in a commercial dispute have the opportunity to resolve it through mediation. Unfortunately, mediation can often fail to produce a settlement not because of a lack of will, but because of a lack of planning and understanding of the process. The goal of mediation should be to settle on agreed terms. It should not be used as an opportunity to size up the other side case ahead of a trial. If you are heading into mediation there are a several important things to keep in mind before the day of the mediation:
- Choose your mediator carefully. Mediators come in all shapes and sizes and can take very different approaches to their role. For example, do you want someone who will provide their opinion or someone who will facilitate the process and let you reach a deal? Some mediators have experience in specific business sectors and types of disputes. Be proactive and select your mediator with the opposing side before one is appointed for you.
- Be sure to meet with your lawyers ahead of the mediation. This will help ensure you are on the same page in terms of approach, the value of the matter and know what each of you is going to say.
- Do not develop a bottom line before the mediation. Parties intent on using the mediation process to resolve the dispute must be open to receiving new information and remain flexible based on the discussion that takes place during the session. Once you hear the other side’s view of the dispute your perceptions of them and the case can alter.
- Evaluate what alternatives are available (eg. arbitration or trial), including how long it will take, the cost, possible outcomes and the risk. This can be used to compare to the proposal on the table at mediation. Businesses should also consider the cost to their business caused by the distraction of the on-going dispute.
- Be sure you, or your representative at the mediation, have the authority to agree a settlement. And make sure the opposing side is also sending a representative with the same authority. It is significantly easier for someone to say ‘no’ over the phone when they haven’t been part of the discussions, heard the other side and sat face-to-face with them. If both parties truly want to use the mediation process to resolve the dispute, both need to send someone with the authority to agree a settlement.
In the coming weeks we’ll be writing about the actions you can and should be taking once the mediation has commenced.