What is Commercial Mediation?

Carol Francois

Commercial mediation is a processed used to resolve disagreements that occur in commercial relationships. This can include disagreements over land, materials, rights, opportunities and contracts. There normally are six stages in a commercial mediation process. Both parties must agree to use the services of a professional mediator to resolve the dispute and to be bound by the agreement that is reached.

Commercial mediators should have extensive legal knowledge.
Commercial mediators should have extensive legal knowledge.

A professional mediator often is a lawyer who has completed an additional training program in commercial mediation. He or she has a combination of legal knowledge and expertise, as well as the skills necessary to reach a resolution that is agreeable to both parties. The use of commercial mediation to resolve business disputes is steadily increasing because it is an excellent way to resolve a dispute through a formal process, at a much lower cost than civil litigation. It is important for both sides in the dispute to agree to the mediation process and to the appointment of the particular mediator.

Good business conflict resolution can dramatically improve communication, solve important problems, or even help avoid a lawsuit.
Good business conflict resolution can dramatically improve communication, solve important problems, or even help avoid a lawsuit.

There are six typical stages involved in a commercial mediation process, and although the details may vary, most mediation follows this outline. Both sides are expected to arrive at the mediation session prepared to review the details of the dispute and with the authorization to reach an agreement. The amount of preparation required depends on the length of the dispute, but most companies take at least two to three days to organize the supporting materials into a binder and prepare opening statements and a summary of the main issues. A list of possible resolution options and negotiable items can be very helpful during the actual process.

At the beginning of the commercial mediation session, the mediator makes sure that introductions are done and explains the goals, rules and etiquette of mediation. It is very common for the mediator to provide a list of expected protocols to everyone at the table. Simple rules such as no foul language, no threatening behavior and allowing the other person to speak without interruption are often listed.

The next step in the process is the opening statements of the participants. Each side is invited to explain in their own words what the cause and the impact of the dispute are and to provide at least one suggestion to resolve it. Interruption or correction by the other side is not allowed. The mediator often calls a short recess at this stage, allowing time to compare the resolution suggestions and create a list of agreed upon facts.

Both sides are brought back together to review the points raised in the opening statements and propose a compromise or series of options for resolution. Each side has an opportunity to meet privately with the mediator to discuss the relative strengths and weaknesses of their position and discuss settlement options. After these meetings, the mediator brings the two sides back together to discuss the possible solutions and work on the details until an agreement can be reached. The mediator documents the main items in writing, and both sides sign a copy of the settlement to show that they accept it.

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