Commercial mediation: how does it work and what are its benefits?

Commercial dispute resolution has been for many years shaped by a culture of litigation – parties engaging in legal battles that are expensive, that can go on for many years and that often results in the conclusion of their relationship. While legal disputes are of course inevitable, litigation does not always need to be the first port of call. Commercial mediation is an effective and efficient form of dispute resolution. We believe in mediation at Gunston Strandvik.

commercial mediation

There is a growing trend among businesses throughout the world to make mediation their first choice for commercial dispute resolution. This is so in countries such as the USA, Canada and Australia, each of which are increasingly seeing commercial mediation success stories. Similarly, commercial mediation as a dispute resolution tool is a viable option for South African businesses who are seeking real solutions to commercial disputes.

How commercial mediation works and its benefits

When parties engage in commercial mediation, they will meet together to try and resolve their dispute with the help of a skilled mediator. Their decision to do so is made voluntarily, the process is confidential and without prejudice to any rights of the parties. The process is also relatively speedy and cost-effective.

The parties have a greater level of control over the outcome of the proceedings. Because of the voluntary nature of the proceedings, they are non-binding unless a joint settlement agreement is reached between the parties. If a resolution is reached, it is one that works for both parties. But if mediation does not work, the normal remedies are still available to the parties.

As the mediator literally “mediates” between the parties, the dispute resolution process also allows for the possibility of the parties saving their business relationship. There is potential for the parties to continue working together in the future. This is often not possible once formal legal or arbitration proceedings have been instituted.

Compare the above to litigation and arbitration. Litigation is becoming increasingly expensive and time consuming. Arbitration results often end up back in court for review, so you end up in court anyway. Commercial mediation as a form of alternative dispute resolution clearly comes out on top.

Because commercial mediation is an effective and efficient form of dispute resolution, it is consistent with and actually promotes the principles of good corporate governance. Mediation is also a form of dispute resolution encouraged by the new Companies Act.

It is certainly well worth considering choosing mediation as your first port of call when it comes to your legal disputes. We are passionate about mediation at Gunston Strandvik. If you require any further information regarding mediation or assistance regarding a dispute where you need mediation, please do not hesitate to contact us at [email protected].

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