Business Mediation: What Is It Exactly and How Can It Help Businesses?
Running a business includes potential exposure to a constant influx of conflicts. For instance, perhaps that contract issue, that employee conflict, or that strained relationship between you and your long-term supplier/partner. Regardless of the conflict’s characteristics, it is most certainly crucial to settle the conflict and prevent further dent on the business to better manage it or prevent other conflicts.
But what can you do to achieve that? When court proceedings are less than ideal with their time-consuming and costly nature, is there a way for you to settle a dispute in a more affordable and faster way? The answer is, yes. Of course, there is, and its benefits are certainly far from just more affordable and faster.
Business Mediation: The ultimate Alternative Dispute Resolution for businesses
What is Business Mediation?
Mediation is an alternative dispute resolution method suitable for settling disputes confidentially, avoiding court litigation. The term Business Mediation is used to describe a particular type of mediation concerning business matters. Mediation is also used for settling other types of disputes between family, or insurance matters. In business mediation, the parties involved could be two companies, a company and a private party, a company and a public entity (a government agency).
How does Business Mediation work?
Business mediation respects the same standards and follows the same procedure of mediation. It is a voluntary method to settle disputes, parties decide on an agreement to solve their dispute through mediation.
Parties are also free to agree on a suitable mediator that possesses knowledge, experience and expertise in the matter of the dispute. The mediator facilitates the parties in finding an agreement to settle the dispute. Mediation takes place in confidential hearings. Usually, these hearings last between four and six hours or longer depending on the complexity of the issues. According to statistics, one hearing is enough to reach an agreement. However, if necessary, more hearings can be scheduled. The outcome of the proceeding is a settlement agreement signed by all parties.
How to find a suitable Mediator?
Business disputes often concern complex and technical issues. Therefore, it is highly recommended to be assisted by a skilled and experienced mediator during the proceeding. Parties can easily select a mediator suitable for their needs from the list of accredited mediators provided by well-recognized Dispute Resolution Centers, such as the Thailand Arbitration Center (THAC).
Business Mediation v. Arbitration: what are the differences?
Business Mediation and Arbitration belong to the category of Alternative Dispute Resolution (ADR) methods and both involve the participation of a third neutral party.
In arbitration, this third party is called “arbitrator” who has the power to issue a decision (award) that is binding for the parties. In Business Mediation, the third party is the mediator and can only facilitate parties in reaching an agreement but cannot make any decision or provide suggestions. It is common for parties to attempt mediation before starting an arbitration proceeding.
Business Mediation v. Litigation: why mediation is a better choice
There are different reasons to which business mediation represents a better method to resolve disputes compared to litigation. Business mediation is a cheaper and more time-saving procedure. It is a simplified procedure and does not require the assistance of lawyers, this contributes to lower costs. Moreover, parties are free to find the most suitable solution to preserve their business and their relationships. Additionally, the mediator can be chosen by parties while in court litigation the competent judge is already chosen by the law. In choosing the mediator, parties can agree on skills or characteristics that the mediator shall possess. On the contrary, court litigation does not always happen that the judge is an expert in the matter of the dispute. Lastly, in mediation, the number of meetings can be decided by parties while in litigation, the judge is in charge of this decision.