Benjamin Franklin said there are two certainties in life; death and taxes. Well, I would like to add a third one to the list, disputes. There have always been disagreements and there always will be. However, how we deal with disputes and their escalation and subsequent resolution is changing.
Alternative dispute resolution, led by mediation, is emerging as the preferred alternative to litigation. The growth of mediation is largely because it provides for a cheaper, faster, lower stress opportunity to resolve disputes. Protagonists remain in control of the outcome throughout a process that addresses the complexities of disputes, encourages collaboration and helps to preserve business relationships. Mediation is designed to produce better outcomes. A win win.
Understanding the growth in Commercial Mediation
Statistics Shedding Light:
Growth Trajectory: The Civil Mediation Council (CMC) reports a remarkable surge in the use of mediation to resolve commercial disputes across the UK. Over the past decade, there has been a consistent increase in the number of businesses opting for mediation, with a notable uptick of 20% in 2020 alone.
Financial Implications: According to research conducted by the Centre for Effective Dispute Resolution (CEDR), businesses in the UK collectively spent an estimated £11.5 billion on resolving disputes through litigation in 2019. In contrast, mediation offers a more cost-effective avenue for dispute resolution, often resulting in substantial savings for businesses and individuals.
Resolution Rates: CEDR's data also highlights the impressive efficacy of commercial mediation, with settlement rates in excess of 80% demonstrating the ability of mediation to encourage swift and amicable resolutions that minimise disruptions to business operations and stress levels.
Key Drivers of Commercial Mediation's Adoption
Several factors contribute to the growing embrace of mediation as a preferred approach for resolving commercial disputes:
Cost-Efficiency: Litigation can be very expensive. Legal fees, court costs, and prolonged proceedings tend to place a significant financial strain on businesses and individuals. In many cases they prevent access to the civil justice system. They can be ruinous. Mediation offers a cost-effective alternative. A mediation day will be cheaper than an army of lawyers and the parties remain in control of the outcome . Cheaper, with less judicial jeopardy, the benefits of mediation v's litigation are obvious.
Time-Sensitivity: Time can be of the essence when resolving disputes. Protracted legal battles are destructive and and can significantly erode business profitability. Commercial mediation encourages swift resolutions. Disputes resolved, businesses can refocus on the real business; doing business.
Preservation of Business Relationships: Great relationships with clients, suppliers, and stakeholders are vital for buisness. Mediation prioritises collaboration and positive dialogue. Protagonists can resolve disputes amicably, maintaining strong relationships fore the future. A better outcome for both sides.
Customised Solutions: Unlike litigation, which ultimately ends with a judge or jury verdict and outcome, mediation ensures parties remain in control of the outcome. Crafting tailored solutions ensures their respective needs and interests are addressed, enables both parties to walk away satisfied with the outcome.
Judicial Policy: Increasingly the UK civil courts are mandating mediation as part of their process. They can't keep up with the volume of disputes and are likely to make harsher cost awards against parties that don't engage with mediation. Successful mediation removes the burden on their time, shortens dispute lengths and reduces outcome and cost risks. Mediation makes sense for all.
Embracing Mediation: A Path Forward for Businesses
As businesses navigate an increasingly complex and competitive landscape, the benefits of commercial mediation are evident. Streamlining dispute resolution results in cost-efficiencies, the preservation of often critical business relationship and offers an obvious pathway towards better outcomes for all parties.
Businesses that embrace mediation as a strategic tool will mitigate risk and reduce the time and monetary cost of litigation. The result? They will safeguard their bottom line and supply chains.
Mediation is growing and is here to stay. It will play an indispensable role in shaping the future of commercial dispute resolution.
To find out how we can help resolve your dispute, email nigel@wilsonmediation.co.uk or call on 0774 006 7306.
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