Mediation: Resolving Disputes—With Benefits
Resolving commercial disputes by mediation is gaining increased traction among entrepreneurs, as litigation is proving too costly and time consuming to warrant its use, in all but the most contentious of cases.
Mediation is an extremely versatile form of alternative dispute resolution (ADR) that offers substantial benefits, including time and cost-savings, as well as maintaining successful working relationships. In addition to the resolution of the dispute, mediation offers the parties the chance to salvage their relationships, repair reputations and gain insight into the underlying causes of the dispute.
Many transactional and employment-related disputes are well suited to being resolved by mediation, such as disputes between principals, disputes between businesses and personnel disputes. Mediation is an informal and voluntary process that entails the negotiation of a dispute by a neutral party. The mediator, or neutral, begins by making opening remarks, detailing what will occur during the mediation and establishing the guidelines for the conduct of the parties. The parties each have a chance to speak and state their concerns, so that the issues can be defined. The mediator may privately caucus with each party, if this has been agreed to at the outset, otherwise, the mediation will remain a joint session throughout its entirety. While the mediator may ask clarifying questions, he or she does not proffer solutions to the dispute; the parties are instead guided toward creating their own solution, one that will be voluntary and mutually beneficial. Once a resolution has been reached, the agreement is codified into a written agreement, which is considered binding, and confidentiality agreements are signed.
Most mediated disputes can be resolved in several sessions, if not in a single session; the parties have direct control over the chronology, which is established at the outset of the mediation. By opting to mediate, the parties avoid excessive legal fees, delays due to the backlog of court cases and appeals, as well as receiving a judgment that may no longer be relevant or enforceable when it is rendered.
While time and cost-savings are more easily quantifiable, perhaps the benefit that yields the biggest impact is that of maintaining harmonious working relationships. For individuals who have expanded or established their businesses in new or foreign environments, this takes on additional importance. Succeeding in business requires close attention to relationships. Entrepreneurs must take into account personal differences, the reliance on networking and introductions to gain access to a targeted sector, the size of a particular market or consumer base, and the number of small and medium sized enterprises (SME’s) that are family-run—and hence have their own unique dynamics. Mediation provides the parties with the opportunity to better understand each other and to stem the acerbity that often results from litigation.
In addition to being an effective dispute resolution mechanism, mediation cultivates a mindset of conflict avoidance, affording the parties with a more nuanced understanding of the environment in which they are operating. The use of mediation will continue to be a growing trend in Greece—and a boon to those wishing to avoid the legal system—expanding under the EU Mediation Directive 2008/52/EC that was recently signed into law, which covers both domestic and cross-border disputes.