Caldwell & Kearns, P.C.
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Protecting clients in the most complex legal disputes

Using alternative dispute resolution to resolve commercial disputes, P.1

Commercial transactions, to be successful, must be properly coordinated with a clear understanding between parties of their mutual obligations and rights. When the other party’s duties aren’t fulfilled, quickly addressing the matter is important in order to avoid the financial, reputational, and existential threats to the business that can result.

There are various ways commercial disputes can be resolved, whether through working the matter out privately early on, through litigation, or through alternative dispute resolution processes such as mediation or arbitration. Commercial mediation can be a particularly effective way to resolve commercial disputes. 

Commercial mediation, like any other form of mediation, can be and often is used by businesses as a first resort for resolving disputes, sometimes in conjunction with preparation for litigation. The benefits of mediation over litigation include: the fact that it is often less costly; it gives parties greater control over the resolution of their dispute; and it gives parties the ability to keep their settlement private.

Though mediation does offer certain benefits, it is not fool-proof. There is, first of all, the need to select the right mediator for the job. As we’ve previously written on this blog, this requires careful consideration of the mediator’s education and training, professional background, personality, values and style of mediation.

There is also the need to properly prepare for the mediation, which includes selecting representatives from the company to attend the mediation. The latter is an important issue since it can steer the course of the mediation, for better or worse. Preparation for mediation should include defining what it is the company hopes to achieve in the process and identifying areas of potential negotiation.

Business that turn to mediation to resolve commercial disputes can certainly work with their own attorneys in the process, and this can be particularly useful when the mediator utilizes an evaluative approach to the process. In our next post, we’ll look at the topic of using arbitration to resolve commercial disputes, and how this might compare to the use of mediation.

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