Businesses worldwide spend huge sums of money on legal fees and court costs to litigate disputes which could have settled for a fraction of the cost by using mediation. Professional mediators estimate settlement rates of up to 90%, with 70% of cases resolving on the day of the mediation (the other 20% of cases settle within a short period after the mediation meetings). With such clear advantages to commercial mediation it is crucial for any business to understand how this alternative dispute resolution approach can work for their case.

Understanding the Basics of Mediation for Commercial Litigation

Smiley Law regularly assists clients with commercial mediation, and experience has shown that a solid alternative dispute resolution strategy often leads to a successful negotiation. While court proceedings are sometimes inevitable, choosing to resolve your commercial dispute through mediation has many advantages:

  • Mediation is usually much cheaper than the costs of a formal litigation process, and usually produces settlements much quicker than litigation.
  • Because both parties can agree on whatever terms they decide, the mediation process is flexible, both in terms of timelines and manner of mediation.
  • Mediation is much more successful at maintaining a good business relationship.
  • A good mediator can suggest methods for resolving disputes that the parties may not have otherwise considered.
  • The fact that the parties have gone to the trouble of arranging the mediation, and that they have each played an active role in accepting and arranging the mediation, gives them a feeling of empowerment, increasing goodwill and motivation to reach a settlement.
  • Discussions with a mediator are private and confidential. If the dispute does end up going to court, any offers or concessions made in the mediation cannot be revealed by the other side in the court proceedings.

Mediation may not always be suitable for you. Mediation requires the participation of both parties, so if the other side doesn’t want to join you in negotiations, then you will most likely end up having to take the issue to court. Other factors, such as a court injunction, can also make mediation impossible.

Once you and the other party do agree to go into mediation, there are several basic steps.

  • Through the mediator, both parties determine the conduct of the mediation.
  • Both sides prepare statements explaining their case and their arguments, which they often present in front of the mediator at a joint session that opens the mediation.
  • The parties usually then retire to separate rooms where mediator meets each party separately. During this phase, the mediator often shuttles between the parties, examining each side’s position in confidential meetings with each party and giving advice/views on the strengths of the party’s case, while receiving information from each party that the party tells them they may or may not reveal to the other side. Most mediations are concluded within one day, but some may take longer.

If the two sides do not come to a settlement, they may agree to reconvene for further mediation at a later date, or to suspend mediation altogether and head to court.

Choosing a Qualified Mediator Can Make All the Difference

The mediation process can save your firm considerable time and resources, but in order to ensure a fair settlement you should consult with legal mediation professionals. Whatever dispute you face, contact Smiley Law to see if mediation is the right choice for you.

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Seth Smiley
Seth is an attorney licensed to practice in Louisiana and California. He is the owner and lead attorney at Smiley Law Firm. To speak with Seth fill out the form on this page.
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