Lately, mediation has been gaining popularity as a helpful alternative to litigation. It is considered to be fast and cost-effective, too. Nevertheless, mediation still cannot completely get rid of many speculations and misconceptions that surround it. Many people continue to take mediation as a preparatory stage before entering the court phase. Such stereotypes can needlessly slow down the process of successfully settling a business dispute.
Mistake 1. Using mediation to showcases strengths
It often happens that the parties treat mediation the same way they approach litigation – with a confrontational and argumentative attitude. This tactic is often not promising for both parties. The more effective strategy for mediation would be using positive and peacemaking methods.
Despite the necessity to sign a legally binding settlement agreement if an agreement between the parties was reached, generally speaking, mediation is a confidential and non-binding process. The whole nature of this dispute-settling instrument is to allow the parties to show their goodwill and initiative while not judging the situation by the parties’ legal position.
It is very improbable that after one party presents its strong but belligerent arguments, the opponent would recognize their own arguments as weak or non-sufficient. Instead, it would be useful to focus on a mutually beneficial settlement.
As long as the aim of the process is to resolve a commercial dispute efficiently, the best approach would be moving far from the legal arguments and focusing on commercial aspects of the case as well as paying attention to the common interests of the case’s outcome. Moreover, it is crucial to remember the risks both parties would face if the case would be eventually passed to the court.
Mistake 2. Pulling the mediator to your side
Stereotypically, parties sometimes make the mistake of treating a mediator as a judge and, therefore, doing their best to convince the mediator about their rightness. The understanding of the mediator’s role is crucial for avoiding this mistake. The task of the mediator is to stay neutral and to facilitate the negotiation between the two parties.
Many commercial disputes are built around financial issues. The aim of negotiation between the parties is to provide a platform where the opponent can put forward their offerings directly. In mediations, lawyers that represent the parties rarely confront the opposite party directly. The reason for that is mediators or lawyers are not the ones who have the power of proposing or agreeing to the proposed settlement.
A successful outcome of a mediation process directly depends on the ability to prepare and present the arguments while addressing the opposite party and not the mediator. The representatives of the parties who have the power to decide about the outcome of the case are the crucial figures in the mediation process.
Mistake 3. Insufficient preparation
The failure of the parties to properly prepare for mediation is another popular mistake that can negatively influence the harmonious settlement of the dispute. The misstep happens when the preparatory work which is known for being effort-consuming is passed to the care of legal advisers.
Obviously, the lawyers need to prepare documents to be able to accurately represent the interests of the parties. Still, their clients should not underestimate the importance of being detailly informed about their position and being able to evaluate the commercial aspects of the dispute.
Another issue connected to the preparation aspect of mediation is the degree of authority given to a party representative. When it comes to legal entities, it is crucial to make sure that the person representing the party actually has the authority to do so. In case of any restrictions related to the amount that person is allowed to offer or accept, the opposite party needs to be informed about them.
Both parties should be fully prepared to resolve the dispute effectively. It could also be useful to anticipate the capabilities and probable offers coming from the opposite side to be ready to deal with the opponent’s behavior.
While being an alternative method of resolving commercial disputes, mediation demands different skills than litigation does. Therefore, it is useful to hire the services of specialized mediation lawyers. This would help avoid common mistakes mentioned earlier and other, not so obvious, missteps in order to resolve the dispute successfully.
Professionals at COREDO are at your service if you need advice on mediation processes. Just contact us to find out more about the assistance we offer.