When it comes to mediation, a number of unfair stereotypes come to mind about this procedure. For example, many believe that mediation is only suitable for disputes over family law, or it is something like therapy, when the parties must have a heart-to-heart talk, leaving out the issues on the merits of the dispute. Mediation has been even viewed as an ineffective method of resolving commercial disputes.
It should be said right away that all these statements are far from being true, and mediation is being increasingly used as an alternative method of financial disputes resolution without resorting to arbitration or court. Typically, business disputes that are successfully resolved are very complex and require large sums of money to be claimed.
Therefore, the indicators of successful mediation can potentially be unexpected, but in real conditions, the correct use of the possibilities of the mediation procedure gives an effective result.
Mediation is an alternative method to resolve commercial disputes. In fact, it is a facilitated form of negotiations conducted by an uninterested person - a mediator. He does not draw any conclusions, never expresses his opinion about the proposals made by one of the parties, otherwise, it would be a violation of obligations. Also, the mediator does not assess the merits and risks of certain decisions, does not impose decisions on any of the parties, and does not advise on appropriate actions.
Mediation is not arbitration or litigation, nor is it a “scaled-down” version of these procedures. In many cases, mediation takes place at a time when the parties do not have any evidence, which suggests that the procedure requires little preparation, and the parties are not required to provide any evidence that they could use against the opponent. Moreover, such an approach would rather be fundamentally destructive for resolving collisions through a mediator.
Idea and benefits of mediation
It consists in the fact that the parties, with the help of the mediator, show mutual understanding and establish an interest in the interests of the other party instead of the position that they occupy at the time of the beginning of the settlement of the dispute. As a result, the whole process takes place largely in an informal setting, in which both parties feel more comfortable and, therefore, are ready to discuss the issue more frankly.
Mediation is also a completely confidential procedure and cannot be detrimental to personal interests. In simple words, no information that is discussed during mediation can be disclosed or used against the other party in the future. This approach gives even more opportunities for free expression, without fear of saying something superfluous. This is valuable for correcting the damage in a relationship, be it personal or business.
As a result, a mediated dispute resolution often produces results that are positively different from what the parties might initially expect. In addition, the decision to which the parties to the dispute come independently is often better perceived in a psychological sense than the decision that would be made by a judge or arbitrator and is more likely to be optimal for both parties. Thus, the successful resolution of an international financial dispute or family dispute preserves the relationship between the parties, which, given the adversarial nature of arbitration and litigation, is one of the main advantages of mediation.
Saving time and money
Speaking about arbitrations and litigation in courts, one cannot fail to mention the significant costs, the magnitude of which can be critical even for large companies. Here mediation also appears in a favorable light, since the costs associated with mediation are minimal. The parties can submit any documents that can help the mediation process flow, but this is not obligatory.
Resolving disputes through mediation is also a much more time-efficient method. After deciding on the mediation procedure, the process itself can take place within a few days or weeks. This may seem important when you consider that litigation can last for months or even years.
Parties seeking to resolve a dispute must always take into account a number of circumstances, including the actual relationship between them, the nature of the case, and any early unsuccessful attempts to resolve the dispute. In any case, the conduct of the mediation procedure is a decision that should be made first of all during the resolution of disagreements of any nature.
IQ Decision UK experts consult on mediation issues and are ready to assist in resolving financial disputes and resolving international financial conflicts, as well as provide mediation services in the UK and other countries. For up-to-date reference information, please contact us through the form below.