Prior to delving into a discussion on the above, I should like to mention that the purpose of this article is not to provide the reader with an exhaustive and prolonged account of the above two processes.
As there is a substantive amount of literature on the matter, this article will only serve as an outline and a somewhat general reminder of the benefits of mediation and perils of litigation.
To begin with, litigation must always be viewed as a last resort in a dispute between two parties.
Nevertheless, a certain animosity in us often urges us to make a, what we consider in a state of blind rage, pre- emptive strike against our ‘nemesis’.
Before doing anything irrational, however, such as issuing court proceedings, in today’s business world, you need to equip yourself with a fair dose of common sense and business acumen.
The first step to making the transition from litigation to mediation is realising that the person on the other side of the table is not your ‘nemesis’ but an individual, a friend if you will, with whom you have successfully worked until very recently.
It will, thus, make sense for you to mend that relationship and not destroy it by taking the person to court. Litigation is often seen by individuals and businesses alike as an aggressive step and an assumption that any future dealings between the parties are to cease with immediate effect.
Consequently, both parties will need to look for other businesses to fill in the gap and build a new relationship in the hope that it will be as strong as the one they had between them.
This transition will normally result in an insurmountable degree of unnecessary stress which most likely affect both the company’s productivity and employees’ satisfaction.
A further effect of premature litigation, especially commercial, is that it is normally incredibly strenuous on a business’s finances. Funding litigation is a continuous process and not a one- off event; thus, it is more than likely that, especially for small and medium companies, it might have a direct effect on cash flow and it can easily result in various defaults with creditors, employees, etc.
Moreover, litigation is not very popular with the general public and being involved in litigation may well damage a company’s reputation. Also, when a corporation ends up suing a smaller company, it is most often viewed as bullying and not justice.
With mediation, on the other hand, publicity is not an issue as it is conducted in a confidential manner and the only participants are the parties, their solicitors and the mediator.
Also, a crucially beneficial trait of mediation is that both parties are working together, trying to find a solution, rather than blaming each other and trying to establish, as the case is with litigation. That will, ultimately, mean that the parties might still have a very good chance in maintaining their relationship and future dealings.
Another substantial advantage of mediation over litigation is that a date for a ‘mediation hearing’ will most often be available in two to three weeks from the initiation of the process; with litigation, on the other hand, a trial date is usually set between six and nine months from the day on which proceedings are issued.
Last but not least, even though litigation is generally a lot more expensive than mediation, some mediators charge each party between £ 500 and £ 750 per day. This, then, is another incentive for the parties to resolve the matter as quickly and amicably as possible which often tends to work out in the end.
To conclude, before jumping head- on into litigation, you must really think about your own and your company’s well- being. Nowadays, it is of utmost importance for business ventures to maintain and bolster their relationships so that they can withstand the unforgiving blizzards formed by today’s economic climate.
Be sensible-
Don’t litigate, mediate.
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