Mediation is a common form of alternative dispute resolution in commercial disputes. The parties, usually accompanied by their legal advisers, meet with a mediator to attempt to reach a settlement. The mediator is an independent third party whose role is to facilitate negotiations and settlement between the parties. He or she is not a decision maker or judge.

The process can be used at any stage in the proceedings and in company and commercial matter.  It is a voluntary process where the Mediator helps the parties to a dispute to find a solution to the issue that they can both live with; a win-win scenario.

The mediator remains entirely neutral throughout the process and will not tell the parties what to do but instead shuttles back and forth between the parties helping each work towards a resolution. It is of course a form of negotiation and allows for a resolution based on common sense.   

Mediation is a proactive way to settle a commercial dispute. With the support of a trained Mediator, the process encourages parties to work together to find a solution.

In Rolf v De Guerin [2011] EWCA Civ 78, the Court of Appeal endorsed the use of mediation. In that case, the defendant refused several opportunities to mediate until the eve of trial. Rix LJ described the action as ‘a sad case about lost opportunities for mediation’, adding that the conduct showed how litigation can be ‘wasteful and destructive’.

Even where mediation concludes without a settlement being reached, it is rare for it to have been a waste of time or money. It is not uncommon for a settlement to be reached in teh days and weeks following a mediation.

During the mediation process the parties will have gained some sense of perspective and an understanding of the other party’s position, together with the underlying rationale. A high percentage of disputes which do not settle at mediation, do so shortly afterwards.

If you are locked in a commercial dispute, irrespective of whether or not court proceedings have commenced, consider mediation as a realistic alternative to litigation. If you are in any doubt take legal advice.

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