Commercial Mediation, Negotiation, and ADR Solicitors

Mediation

Reasonable communication between opposing parties is among the first casualties in many commercial disputes.

If negotiating a mutually agreeable dispute settlement has proven impossible, mediation may be a viable option.

Commercial mediation is an ADR process in which a neutral third party attempts to facilitate a productive back-and-forth between businesses and people involved in a commercial dispute.

Mediation is voluntary and non-binding. 

The mediator will make no judgment in the dispute but simply try to facilitate an agreement between the relevant people involved.

Mediation aims to help businesses and individuals find a mutually agreeable settlement and end their dispute. 

However, mediation alone rarely leads to the most viable outcome. 

Substantive steps must be taken in advance to position you on the front foot. 

Instructing a solicitor ensures that the other side understands that — absent an agreement — the outcome will be much worse. 

Here are examples of steps Helix frequently takes to further the interests of our clients:

• Issuing court proceedings
• Preparation of evidence
• Issuing applications
• Attending hearings
• Drafting pre-action letters, documents, and information

At that point, mediation arrangements can be pinned down in further detail.

The mediation process itself is highly flexible but typically includes the following steps.

1. Appointing a Mediator: All parties to the dispute must agree on a neutral third party to act as a mediator on their behalf. Usually, one party (the Claimant) proposes three alternative mediators, and the Defendant selects one.

Solicitors and barristers often act as mediators, but legal qualifications are not required. A mediator is not a judge.

A thorough understanding of the law will help the mediator advise each party on the legal strength of their position.

Numerous professional and educational organisations, including CEDR and the ADR Group, accredit non-lawyer mediators in the UK.

Typically, the parties will share the mediation costs equally, and fees are paid in advance.

2. Discussion and Planning: Once appointed, the mediator will meet with each party — virtually, in person or over the phone — to understand their positions and the particulars of the dispute. 

3. Negotiation: After assessing the nature of the dispute, the mediator will attempt to negotiate a settlement between the parties.

Depending on each party’s position and how entrenched it has become, the mediator may or may not be able to find a solution that everyone agrees on.

Because mediation is voluntary, parties to the dispute may end the process at any time, with or without giving a reason.

In that event, alternative resolutions must be sought, including through litigation. 

4. Settlement Agreement: If the mediator can negotiate a solution, they will draft a settlement agreement. 

The settlement agreement is binding — meaning the parties cannot back out if they agree to the settlement terms during the mediation.

Arbitration

The arbitration process is legally binding, giving it more teeth than mediation or negotiation.

Often, an arbitration clause will exist in a preexisting contract between the parties where it’s specified as the ADR method to be used in case of a dispute.

Alternatively, all parties to a commercial dispute can voluntarily enter a free-standing arbitration agreement. 

Except under extraordinary circumstances, all parties to the dispute must abide by the arbitrator’s decision, and arbitral awards are enforceable in court.

An arbitrator can be an individual. 

Arbitration panels of several individuals with differing areas of expertise are frequently used in complex disputes.

Unless the means of selecting an arbitrator or arbitration is specified in an existing contract, all parties to the dispute must agree to the appointment for the process to proceed.

Arbitration proceedings can be institutional or ad-hoc.

Institutional arbitrations are held by a mutually agreed arbitral institution, such as:

• International Chamber of Commerce (ICC)
• London Court of International Arbitration (LCIA)
• Chartered Institute of Arbitrators (CIArb)

Ad-hoc arbitrations are more flexible and may be based on international standards, such as the United Nations Commission on International Trade Law (UNCITRAL) arbitration rules.

In all cases, arbitrators should be independent third parties — usually with extensive experience in the industry or expertise in specific aspects of the dispute. 

Arbitration hearings resemble court proceedings held in private, except that they can be conducted in person, by phone, or in writing.

The disputing parties will be called upon to provide numerous documents and may be required to testify before the arbitrator or arbitration panel.

Documents typically required by an arbitrator include:

• Witness statements
• Expert reports
• Other documents that support the parties’ position in the dispute   

Arbitration hearings are a more formal method of ADR than negotiation or mediation, and each party must hire a lawyer to represent their position in the dispute. 

Other Forms of ADR 

Negotiation, mediation, and arbitration are by far the most commonly used methods of ADR, but additional alternatives exist, including:

• Adjudication
• Expert determination
• Early neutral evaluation (ENE)
• Conciliation

Alternative Dispute Resolution Benefits 

ADR has multiple advantages over litigation in a wide variety of commercial disputes, including:

Faster Resolution

Depending on the parties’ locations and the type of dispute, it can take months or years for a dispute to proceed to a trial in court.

ADR is typically a much quicker way to resolve a commercial dispute.  

Lower Legal Costs

ADR can be cheaper than litigating the matter to a trial. 

However, it’s essential to consider that if a dispute does go to court, the successful litigant will typically be awarded payment for costs.

Costs are sometimes awarded in arbitration, but it depends on the particulars of the contract or freestanding arbitration agreement.

Less Uncertainty

No matter how strong you believe your position is in a commercial dispute, taking a case to court carries an element of risk and a lack of control. 

A single judge usually determines the outcome. 

Because arbitral awards are legally binding, uncertainty is also inherent in the arbitration process.

Reaching a settlement through negotiation or mediation guarantees that you will only agree to a solution that you find commercially acceptable.

If your position is exceptionally strong and costs are a concern, it might be worth exploring alternative funding options for litigation. 

Our litigation team frequently work on a no-win, no-fee basis in commercial, property or construction litigation disputes.

Privacy

For many businesses — particularly at the enterprise level — keeping the details of commercial disputes from the public is a significant concern.

Court proceedings are public, and the details of a dispute can easily become common knowledge — particularly in high-profile matters.

A business can suffer significant damage to its reputation, even if it wins in court.

ADR proceedings and outcomes are private and are not public documents.

The details of the dispute — and the eventual settlement — can and usually will remain confidential. 

Conflict Reduction

Suppose a mutually agreeable settlement is reached through negotiation or mediation. In that case, it’s far more likely that a commercial relationship can be maintained, and the dispute may not preclude working together in future.

What Happens if Alternative Dispute Resolution Doesn’t Work?

Litigation is often the only recourse if ADR fails and no agreement can be reached.

Opposing parties frequently become entrenched in their positions, or the gap is too far to bridge through negotiation or mediation.

Unless arbitration is contractually required, it’s unlikely that the party with the weaker position in a dispute will enter into an arbitration agreement unless confidential matters are involved.

This is particularly true if your opponent’s goal is to delay or withhold payment or other resolution of the dispute, hoping that you will write the matter off. 

Even in disputes that can be resolved through negotiation or mediation, the threat of litigation can lead to a more favourable commercial outcome.

If you’re involved in a commercial dispute and find yourself at an impasse, Helix Law’s expert litigation team can help. 

ADR is just one tool in our legal armoury. 

Knowing when, where and how to deploy ADR — and optimising your legal position — is fundamental to achieving a positive outcome. 

Contact Helix Law’s commercial litigation team today, and we will be happy to discuss your options, including ADR, to reach a successful outcome. 

We aim to respond to all queries within an hour.