The use of mediation to settle commercial disputes is increasing as its seen as a pragmatic and more cost effective solution to a dispute than full blown legal action that can be very time consuming as well as costly.
With the right mediator, settlement can also be reached sooner than using the clogged court system with its long delays between hearings etc.
No one can force the parties to mediation but the courts have the power to stay a case for mediation but cant order anyone, be it a company or an individual, to take part.
It is however an indication that the parties should consider mediation rather than involve themselves in a full blown legal action where the costs will quickly escalate and may not be able to be recovered and the final outcome may be uncertain.
Mediation is confidential and non binding and is conducted on a ‘without prejudice basis’, at least until a settlement is reached.
This allows the parties involved to speak freely, explore options to settle, and explain their concerns without fear of retribution or prejudicing their strict legal position.
A skilled mediator will receive the information and will identify the key points or barriers in reaching a settlement, and then help the parties explore a way to remove those barriers without forming a judgement, unless specifically requested, on the merits or otherwise of each sides case.
This helps concentrate the efforts on settling the dispute by concentrating one the key issue rather than the tiny elements of a legal action.
Parties who agree to settle in a mediation are also more likely to make payment, if that is required, than in a court action, as they will settle on terms that they can meet and not have an obligation imposed on them.