• Negotiation
  • August 25, 2021

Why Mediation Is A Great Way For SMEs To Resolve Disputes

Flexible, inexpensive, and confidential -  Mediation offers an ideal solution to SMEs needing to resolve a dispute. 

Mediators who responded to the Ninth Mediation Audit carried out by the Centre for Effective Dispute Resolution (CEDR) published in May 2021, reported that 72% of their cases settled on the day, with another 21% settling shortly thereafter. 

What is Mediation?

Before explaining the definition of Mediation, it's essential to know what is meant by Alternative Dispute Resolution (ADR).

ADR is a way of sorting out your disputes without going to court. It is usually cheaper, quicker and less formal. There are two main types of ADR: Arbitration and Mediation.

Mediation is not legally binding and is voluntary. It is a private dispute resolution process where an independent Mediator works with the parties, helping them resolve the dispute and reach an agreement.  

Regarding costs, in most cases, the parties will agree to share the Mediator’s fees and other costs associated with the process (venue hire, refreshments, etc). Each party will also usually pay their own individual legal costs.

Arbitration is legally binding and involves appointing a trained and neutral third party ('the Arbitrator') to decide the dispute for the parties.

The Arbitrator is chosen by the parties and is an expert in their business sector. The Arbitrator is appointed on a fixed-price basis (though either or both sides may incur other legal costs if they use lawyers to represent them in the Arbitration).

Arbitration does not take place through the Courts and so it is less formal. This can sometimes make Arbitration a bit quicker and cheaper than going to Court.

Is Mediation enforceable?

Any agreement reached in Mediation is technically non-binding. However, as most parties enter into the process in good faith, once a solution has been found, their Solicitors will draw up a contract to reflect what has been agreed.

How is a Mediator selected?

Another great advantage of Mediation is that you and the other party to the dispute are free to select a Mediator. This will allow you to choose someone who has experience and knowledge of your industry.  

What if Mediation does not resolve the dispute?

Even if you and the other party do not reach an agreement through Mediation, the process is still highly valuable because:

  • The Mediator will help you both narrow down the issues to be resolved, increasing the chances of an out-of-court settlement being reached. In practice, most disputes not settled during mediation are resolved shortly afterwards.
  • Mediation can strengthen the communication between you and the other party. The process will allow everyone involved to understand each other’s position and perspectives.
  • The UK judiciary values and respects Mediation.. You can always return to the process after you both have time to evaluate what you learned during the first round of Mediation.  

Final words

For SMEs conscious of their commercial reputation and cash flow, Mediation is one of the most effective ways to resolve disputes. LawBite Solicitors are highly experienced in Mediation and will advise and represent you from the beginning to the conclusion of the process.

You can get legal assistance from LawBite

Our lawyers and solicitors are experts in Mediation. They can:

  • Draft Mediation contract clauses
  • Help persuade the other party to accept Mediation
  • Help you source an accredited third party Mediator
  • Help you prepare for the Mediation
  • Attend on the day and help resolve the dispute through the Mediator
  • Provide a neutral LawBriefs Mediator to handle the Mediation (as an alternative to acting for you)

LawBite online lawyers and online solicitors provide expert legal advice on the mediation process. Book a no-commit 15-minute call with our friendly lawyers today or learn more by joining LawBite for free.

Additional helpful information

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

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