Mediation – A cost effective means of resolving commercial disputes
Disputes arise between people and organisations as an inevitable consequence of business life. Traditionally, such disputes, if not resolved directly between the parties involved, have ended up in the Courts. Litigation, however, can be a very expensive method of resolving disputes as well as a serious drain on management time and resources. Control of the dispute and how to resolve it is handed over to a third party, the judge hearing the case. In response to these challenges, alternative methods of resolving disputes have developed. One such method is mediation.
Mediation is a process in which an independent third party facilitates communications and negotiations by the parties to the dispute to assist them in reaching a mutually acceptable solution to the dispute. Unlike arbitration or litigation the parties retain control of the process and any ultimate resolution arrived at. The decision of the mediator is not binding on the parties involved in the same way as if handed down by a Judge or Arbitrator.
One of the most appealing benefits of mediation is its cost effectiveness. Mediation is generally up to 70% cheaper than litigation. It is also a far speedier way to resolve disputes than litigation or arbitration. Typically, mediation disputes are resolved within three to six weeks. However with arbitration and litigation, it can take a number of years to resolve a dispute. Mediation then potentially saves on financial resources and management time and enables management to remain focused on the constructive aspects of business, rather than being distracted by an on-going dispute.
Other benefits of mediation include confidentiality, privacy and the preservation of business relationships. Given that the parties do not become entrenched in protracted litigation but come to a mutually acceptable agreement, it is often the case that they can work amicably together in business after a resolution has been agreed between them to suit their own needs.
At a recent seminar held by the Irish Commercial Mediation Association, which was aptly named “Mediation saves time, money and business relationships”, the results of a survey carried out among Managing partners of more than 3,500 law, accountancy and other professional firms revealed that mediation is the most preferred method of dispute resolution. Three quarters of those surveyed ranked mediation as their first preference for dispute resolution, followed by conciliation, arbitration and litigation.
In this challenging economic climate, mediation represents a cost effective solution to commercial disputes, while minimising business disruption and enabling best use of management resources.
For further information please contact Breda O’Malley, Partner BOMalley@hayes-solicitors.ie or Laura Fannin, Solicitor LFannin@hayes-solicitors.ie