Common Mistakes in Mediation and How to Avoid Them

In recent years, mediation has established itself as a good alternative to litigation, a fast and cost-effective means of resolving commercial disputes. However, knowledge about mediation is still surrounded by various kinds of speculation and misinterpretations. There are still a lot of people who consider mediation only as a preparatory part before the court. This is the main problem that hinders the successful settlement of a business dispute.

Mistake 1. Mediation to showcase your strengths

Sometimes the parties approach the mediation process with the same belligerent and adversarial attitude as they approach the litigation. This approach rarely leads to a positive outcome for both parties. For this reason, mediation should be more constructive and conciliatory.

Mediation is by its very nature a confidential and non-binding process (even if it concerns the signing of a legally binding settlement agreement at the end of it, if an agreement is reached between the parties), which allows the parties to show initiative and goodwill without prejudice to their legal position.

So, it rarely happens that the opponent in the process recognizes his arguments as weak, and the arguments of the other side - reasonable and strong, or that it would be better for everyone to strive to come to a mutually beneficial settlement. There is nothing critical about saying out loud what all the participants already know.

Solution:

If you intend to successfully resolve a commercial dispute, then for a positive and mutually beneficial result, it is necessary to move as far as possible from legal arguments in the case, focus on commercial aspects and general grounds for resolving a business dispute between the parties, as well as on what risks you may face, if the case ultimately goes to court after mediation.

Mistake 2. The mediator needs to be pulled over to your side

Within the framework of judicial stereotypes, the parties often make the mistake of referring to the mediator as to the judge, spending a considerable amount of time and energy in convincing the mediator of the position. This is ultimately ineffective, since the mediator is neutral and his role is only to facilitate discussion and negotiation between the parties.

Most commercial disputes involve money issues, and when the parties mediate on their own, it is an excellent opportunity to speak directly with each other. However, it is very rare for lawyers from one side to approach the other side directly in open sessions. The reason is that there are usually one or two people on either side of the table who have the power to propose / agree to a settlement - and they are not lawyers or mediators.

Solution:

For a successful mediation process, it is necessary to prepare and present all your arguments, as well as present them directly to the key person of the opposite party, and not to the mediator. So, one of the responsible persons should write a check, and the responsible person of the other party should be ready to accept it. These are the only persons who are significant for the purposes of mediation.

Mistake 4. Poor preparation for the process

Another common mistake that leads to an unsuccessful outcome in the amicable settlement of commercial disputes is the failure of the parties to properly prepare for mediation. All the preparatory work, since it is quite troublesome, is thoughtlessly transferred to the discretion of legal advisers.

Despite the fact that the lawyers representing the interests of the parties prepare documents to a greater extent, their clients must also have an idea of ​​their position and evaluate the commercial aspects of the case.

If the client is a legal entity, it must be ensured that the person involved in the amicable resolution of the business dispute has the authority to represent that legal entity in the process. If there are restrictions on the authority of a person with respect to the amount that he can offer or accept, it is necessary to notify the other party.

Solution:

The best solution for both parties is to properly and thoroughly prepare for the commercial dispute resolution process. Try to anticipate the opposing side’s capabilities and behavior in advance so that you’re ready to deal with them.

Final word

Of course, mediation, as a peaceful method of resolving a business dispute, requires a specific skill set that is different from what is required for litigation. For this reason, it will be advisable to seek advice from a specialized mediation lawyer in order to maximize your chances of success in resolving a commercial dispute.