ALAN’S TOP 10 REASONS TO USE MEDIATION IN COMMERCIAL
DISPUTES
Mediation, as opposed to litigation, promotes an early,
confidential, cost-effective resolution of commercial disputes. The use of
mediation to resolve commercial disputes is expanding and the Fortune 500
Companies have recognized this by “signing on” to use the process to settle
disputes.
The chance to mediate at an early stage, without creating a
perception of weakness or vulnerability demonstrates that it makes sound
business sense to make the effort to resolve the matter as early as possible,
before people are dug in to positions, rather than spend thousands of dollars in
legal expenses only to settle “at the doors of the court”.
Litigation
·
can take up to 3 years or longer to get to trial;
·
pre-trial legal costs can range between $25,000 -- $40,000,
depending on the nature of the dispute;
·
there is no
confidentiality; the decision is left to a third party – the judge or jury;
and
·
there are huge transaction costs in terms of time, money and
diversion of focus.
Mediation
·
promotes an early resolution;
·
extremely cost-effective in terms of time, money, resources and
energy – average cost per party is approx. $750.00 per day and complex matters
can settle in a day or less;
·
the process is completely confidential and voluntary;
·
settlements are made by the parties themselves with the help of a
neutral mediator through structured negotiation;
·
often the parties’ relationship is restored or enhanced; and
·
research shows that over 85% of disputes submitted to mediation
have settled.
Here are my top 10 reasons why mediation is fast becoming the preferred form
of resolving commercial disputes:
1.
The focus shifts from the positional and
adversarial to finding creative, mutually acceptable solutions.
2.
It allows the parties, rather than the
lawyers, to control the proceedings.
3.
Mediation focuses the parties’
attention and energy on coming to grips with the problems and negotiating
solutions.
4.
Litigation expense and business
disruption is considerably reduced.
5.
Early mediation enhances communication
and de-escalates confrontation and conflict.
6.
Disruption within a business is reduced.
7.
Confidentiality is preserved.
8.
Disgruntled parties can release personal
animosities or hostilities in a way that leads to resolution, rather than
escalation, of the conflict.
9.
The strengths, weaknesses and risks of
each side can be assessed and evaluated.
10.
Valuable business and personal
relationships can be preserved or enhanced by skilful mediators.