Commercial Mediation Explained
Commercial and business success depends in large part on the quality of the relationships it has whether is between partners, employees, suppliers, customers, competitors or others. And as we know, all relationships involve some level of conflict. If this conflict is not well managed, it can result in disputes that can have serious financial and business consequences.
The effectiveness of mediation to address commercial disputes was recognised very early on in the Irish courts as the commercial court was one of the early advocates of using mediation as a means of addressing commercial disputes. This has now been underpinned by the introduction of the Mediation Act in 2018.
The benefits of using mediation in commercial disputes are numerous. Primary amongst them are it is faster than any ohter form of dispute resolution avoiding delays that cost money and productivity, it is less expensive due to its efficiency and shorter duration and protects reputations as disputants can resolve their issues privately protected by the confidentiality of mediation.
Commercial mediation makes commercial sense
The Irish Commercial Mediation Association (ICMA) estimates that businesses can save up to 70% by engaging in mediation to resolve their disputes compared to the cost of going to court. Mediation is recognised globally as a critical means of resolving commercial disputes with almost 80% of commercial disputes in the UK being settled using mediation.
A key significant advantage of commercial mediation is its ability to preserve relationships which are mutually beneficial. This is a critical feature of mediation. It’s distinguishing feature from other forms of dispute resolution is that it can address the repair of the relationship between the parties and not just the commercial consequences of a dispute. When this happens, it can even strengthen the relationships which can be particularly important to small and/or family businesses where the business is frequently built by and around the personalities involved.
Commercial mediation can address conflict arising from all forms of commercial disputes e.g.:
- Boardroom disputes
- Commercial Partnerships
- Commercial contracts
- Professional Negligence
- Property Disputes
- Personal Injury
- Planning
- Inheritance and probate disputes
How the Process Works:
The typical mediation process will involve several steps:
- Mediation is typically proposed by one of the parties to the dispute or by their legal/other advisors.
- The details of the mediator(s) are provided to the parties for their consideration.
- A mediator is then appointed by agreement between the parties.
- The mediation engages in pre-mediation meetings online or in person, telephone conversations and/or correspondence with each party (and their advisors where appropriate). This enables the mediator to obtain a history of the conflict to date and gain an understanding of the perspective of each party. The mediator will also explain the process and ascertain the willingness and preparedness of each party and the suitability of the dispute for mediation.
- A date and venue for mediation is agreed upon which is private and suitable for mediation.
- At the commencement of mediation the mediator will ask the parties to sign an Agreement to Mediate.
- Mediation can be scheduled as required, usually over a half day or full day. However more complex issues may require more than one mediation session.
- Where agreement is reached, a verbal or written mediated agreement can be entered into by the parties. A written agreement is drawn up by the mediators(or by the parties’ legal advisors if present) an signed by the parties.
- The mediation agreement may contain a clause to return to mediation to review the implantation of the agreement at a period to be determined by the parties.
The benefits of Mediation: A better business decision
- Mediation can take place very quickly and is not subject to lengthy delays as is the case in more formal processes. This means business issues can be addressed in a timely way.
- Mediation is shorter in duration than formal processes and therefore costs less.
- Mediation provides a confidential place to talk in which business reputations are preserved.
- Relationships which have been so mutually beneficial to date can be repaired/strengthened.
- The parties determine the solutions rather than them being imposed by others.
- Outcomes can be achieved that would not be possible through formal means which are more restricted to standard, rights-based options.
- It is not an evidence-based process requiring less preparation time and costs.
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