Mediation is an alternative dispute resolution process aimed at bringing together parties in dispute to enable settlement to be achieved and avoid costly legal fees.
The mediator facilitates communication and negotiation between those in dispute, allowing the parties to understand each other better and arrive at a mutually acceptable solution.
The mediator does not impose their view on the parties but remains impartial, which permits the parties to remain in control of the dispute and the outcome.
Key Benefits of Civil and Commercial Mediation from SKSi
Unlike court, mediation is a confidential process. This can be very important for businesses or individuals whose disputes involve sensitive information.
The act of bringing parties together gets them to communicate much more effectively. It is a co-operative process aimed specifically at achieving a settlement.
Misunderstandings can be addressed, which helps to avoid litigation being undertaken on the basis of false/misplaced beliefs.
Business relationships that would otherwise be jeopardised can often be preserved.
Submissions from all parties during the mediation process, both written and verbal, are on a 'without prejudice' basis and will have no bearing on any subsequent proceedings.
Finding an acceptable solution to a problem can prevent the loss of customers, suppliers or business partners.
It is a non-adversarial process. Normally parties in dispute negotiate from polar opposite positions arguing in terms of strength of case. Mediation seeks to reach a sustainable agreement which is supported by all parties.
If mediation fails, the court will recognise that the parties have taken steps to mitigate litigation.
The fact that mediation has taken place can often be an advantage in a subsequent litigation, as discussions have already taken place and each side will usually have a better idea of the other party’s issues.
The following case study is a good example of how mediation can prove to be a much better business choice than litigation.
Business Debt due from SME owner to High Street Bank
A Bank was in dispute with an individual who had used the Bank for a number of years for both personal and business banking.
The Bank’s position was that the customer, in his business capacity, had taken out a business loan underwritten by his property portfolio. The loan in question had been rolled over a number of times, including interest thereon, and become bigger. The Customer contended he had never been advised of the consequences. He stated that he had relied upon his relationship manager for advice and upon a change of personnel he had been treated unfairly.
The Bank was claiming substantial legal fees, in addition to interest.
Through the mediation process, both sides were able to agree despite the confusion due to blurring of lines in their communication leading up to the mediation. A debt was due and payable but if the Customer had been advised at the crucial point in time, the Customer could have discharged the indebtedness and saved both on legal costs, ‘principal’ and interest thereon.
An acceptable settlement was brokered which acknowledged the needs of both sides, whereby a reduced but affordable repayment was agreed between the parties, which was embodied in the Mediation Agreement.