Overview
Mediation works through a neutral third party who helps parties reach a mutually acceptable solution, without the mediator imposing a binding decision as is the case in arbitration or litigation.
Mediation suits disputes where parties want to preserve an ongoing commercial relationship, since it tends toward less adversarial solutions than full litigation, which can complicate continuing to work together afterward.
Regulatory Basis
Mediation typically operates by voluntary party agreement, and the original contract may specify mediation as a first step before escalating to arbitration or litigation.
The settlement agreement resulting from mediation is drafted to be legally binding on the parties, carrying the same weight as any other contract they agree to.
How Mediation Proceeds
Mediation begins by selecting a neutral mediator both parties accept, then holding one or more sessions where each party presents their position to the mediator, who helps bring viewpoints closer together.
If the parties reach an agreement, a settlement agreement is drafted documenting the terms of the final solution, becoming binding on both parties once signed.
Who Needs This Service
Two parties to a commercial dispute who want to preserve their ongoing working relationship and prefer a negotiated solution over judicial escalation.
From our experience, mediation succeeds more often when both parties enter it with a genuine intention to preserve their future commercial relationship, not as a mere procedural step before direct escalation to litigation. Companies dealing repeatedly with the same supplier or customer benefit more from this path than a one-time dispute with a party they won't transact with again.
Additional Considerations
If mediation sessions don't reach a resolution, our arbitration service or litigation before the commercial court remains available without any negative impact on either party's regulatory rights.
The settlement agreement resulting from mediation deserves precise drafting under our contract drafting and review service to ensure it's fully binding on both parties.
Common Questions
Is the outcome of mediation legally binding?
It becomes binding once the resulting settlement agreement is signed, carrying the same legal weight as any other contract agreed between the parties.
What happens if mediation doesn't reach a solution?
Parties still retain the option to pursue arbitration or litigation as a next step, and you don't lose any regulatory right by trying mediation first.