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• A party subject to a dispute should be encouraged to attend a mediation or undertake ADR. Irrespective of the time and cost savings a settlement could bring, the parties may benefit from an objective input/reality testing. A mediation may also facilitate negotiations that have reached a standstill.
• Ultimately, a mediation puts the power back into the parties hands to offer a pragmatic route to a resolution, without having to attend court. For a fast-growing business, this means being able to focus on running the business and reaching the next goals of the growth plan.

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For a growing business having to deal with a dispute, it can be significantly costly, both in terms of money and time, but also from an emotional and stressful perspective.

The most common method of dispute resolution that business owners may know is litigation: suing the other party(ies), or being sued, with a determination being made by a judge. Another more increasingly common method of dispute resolution is mediation.

What is mediation?

Mediation involves the parties working facilitatively with a neutral mediator. The primary aim of the mediation is to work towards a negotiated settlement.

It’s flexible, both in terms of the process and in respect of the outcome negotiated by the parties. It is held on a confidential and without prejudice basis, meaning the contents of what are discussed in the mediation are off-record and in the main cannot be referred to or relied on outside of the mediation or in court proceedings.

Mediations are held over a half or full day, most commonly the latter. They can take place either virtually or in person. The mediator will have confidential discussions with the parties to understand their concerns, what they are hoping to achieve from the process and then (hopefully) start helping them towards what a settlement may look like. The mediation is concluded either when the parties have signed binding terms or it is agreed the mediation should end.

It is significantly cheaper for the parties to have a mediation than to litigate their dispute. On average, contested claims take 1-2 years to reach trial whereas a mediation can be arranged in a matter of days/weeks with it hopefully having settled in the mediation. If it doesn’t conclude on the day, statistics show that a dispute usually resolves either in the following days/weeks or in further settlement discussions or another mediation; this is because the parties have started to focus their minds on settling their despite and what that settlement may look like.

Is mediation compulsory?

In the main, agreeing to a mediation is optional. The courts have always been encouraging of alternative dispute resolution (ADR) even going so far as to order parties who do not engage in ADR to pay costs.

However, the Civil Procedure Rules (CPR) (the rules that govern litigation) were amended on  October 1 2024 to allow the court to order compulsory ADR before a case can progress further.

Mediation can take place at any time during a dispute. For cost-saving reasons, and because it is encouraged in the spirit of the pre-action protocol (the protocol that governs the parties’ conduct before proceedings are issued), ADR and mediation are encouraged at an early stage in a dispute. With that said, mediating can still take place after proceedings have been issued.

The mediation process

The progress is entirely flexible but generally, it tends to involve the following structure:

The parties will send an agreed bundle of papers to the mediator, which may include case summaries (a document summarising where each of the parties stands and what they are hoping to achieve from the mediation). The mediator will have confidential discussions with each of the parties usually by telephone. A date and venue for the mediation will be agreed with the parties and the mediator. The parties will sign a mediation agreement which provides the legal basis of the mediation.

On the day of the mediation, the parties will be in their own rooms, and the mediator will have preliminary private meetings with each of the parties. By agreement, joint meetings may be held with the parties and the mediator.

The mediator will move on to have private confidential meetings with each of the parties. Information will be shared with the mediator in those meetings, and nothing will be shared with the other party by the mediator without authority.

The mediator will continue to have these private meetings. That may involve testing the strength of a case and/or asking how a proposal may be received by the other party. The mediator will encourage the parties to make offers and counter-offers although they will always remain neutral and impartial.

The final stage is to finalise settlement by the parties signing a binding settlement agreement.

Katarina Morgan is a Senior Associate Solicitor and Mediator at Taylor Walton Solicitors.

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