Main Elements of Commercial Mediation
Commercial mediation is intended to assist in the resolution of civil disputes. These can involve any element of commercial dispute about breaches of contract, damages for injury, neighbour disputes, defective goods. Contracts sometimes include an enforceable provision that any dispute must be mediated before going to court.
Commercial mediation usually ends up with one party agreeing to pay the other some form of compensation or damages. The main benefit is that the parties can quickly learn the other's position and decide whether it is worth bringing or defending a claim in the courts. It may also help to identify the main points of difference between the parties and the evidence.
In small disputes (below £10,000) it may not be necessary to take legal advice or have a lawyer present. Generally most commercial mediators are Advocates or lawyers qualified in other jurisdictions and they will be able to advise what the law is in a way which doesn't favour either party. However, in cases where there are potential damages at stake and possibly substantial claims, it is generally sensible to obtain advice. In circumstances where an insurer is involved they will use a lawyer to represent their position. You should not be overwhelmed by this, although it might seem intimidating the process is not fixed and you can get up and leave at any point if you wish to. Whilst the lawyer might be better trained and more eloquent, nothing speaks louder than good clear evidence.
Despite the costs of having a lawyer represent you, you are likely to still save on the time it takes to complete the process and the ultimate cost. Also, because the mediation is not a court process, you are not taking so much of a personal risk regarding the costs of the other side if you find you are unsuccessful.
Sometimes one party or both will agree to mediate only because they want to use the opportunity to gain tactical information and try to gain an upper hand in the dispute by appearing to be reasonable and drawing out the other side's arguments, whilst not telling the whole story about the strength or weakness of their case. Even though it is necessary for both sides to agree that they want to settle their dispute by mediation, nobody is under an obligation to cooperate or reach an agreement.
One of the main pitfalls of mediation can be that there are no rules of proof of evidence. This means that there is no way of testing how reliable a statement by an individual might be. It is also difficult to test the veracity of evidence because there is no formal procedure for disapplying different sorts of evidence. If one person says "we have proof that X happened" for example, there is no way of verifying it. The evidence may not be as strong as the other party cliams it is. In complex cases it might be necessary to agree to some form of exchange of information or witness statements or reports so that neither party is ambushed and can be properly prepared to make representations.
Commercial mediation may sometimes end in a deadlock where neither party will budge on an essential element of their dispute. However, it is very often the case that the process of mediation enables both sides to see the strength of the other side's argument and make an offer based on the realistic prospects of success in court. Allied to this will be other tactical factors, like how much of the costs might be recovered at a trial (even if you win). Some big cases proceed towards court after mediation but settle before the final trial.
In very large or serious cases only specific items of disagreement might be mediated.