Share this:
When a contractual disagreement arises resolution through adjudication, arbitration or litigation can sometimes feel inevitable. However, mediation is one of the most effective tools available for resolving contractual disputes, and it's often underused. It's confidential, flexible, and far quicker and cheaper than other forms of dispute resolution and certainly litigation. A key benefit of mediation is that it allows the parties to stay in control of the outcome instead of handing that decision to a judge or tribunal – at the end of the day if you don’t like the deal that’s being offered at the mediation you don’t have to take it.
A skilled mediator can unlock deadlocked negotiations, bring commercial interests to the surface that formal pleadings tend to obscure, and help the parties reach creative solutions that a court couldn't order. Just as important, mediation can preserve business relationships that adversarial proceedings might damage for good. Success isn't automatic, however. The parties and advisers who get the most out of mediation are the ones who prepare well, engage strategically, and come in with the right mindset. Whether you're new to the process or a seasoned practitioner looking to sharpen your approach, the ten tips below offer practical guidance to help you make the most of your next mediation.
Before anything else, go back to the agreement itself. See if there’s a dispute resolution clause that requires mediation, sets a timetable, or names a provider or set of rules. Failing to follow a contractual escalation procedure can derail later proceedings or expose you to costs arguments. The contract will also frame the core issues: the obligations in dispute, any limitation or exclusion clauses, liquidated damages provisions, and notice requirements. Knowing these terms will give you a firm footing for the discussion that follows.
Mediation may be less formal than a hearing, but it rewards the same level of preparation. Know the key documents, the chronology, and the strengths and weaknesses of both sides' positions. Carry out a candid risk analysis covering the likely outcome at trial, the time to judgment, irrecoverable costs, and enforcement risk. A realistic view of the best and worst alternatives to a negotiated agreement is the benchmark against which every offer on the day should be measured. We have invariably found that the preparation stage assists our clients in understanding and accepting the strengths and weaknesses of their case in a more measured and realistic way. This also enables clarity on “red lines” and getting under the skin of what a “good” outcome looks like.
The mediator's style, experience, and credibility can shape the whole process. In a technical construction, IT, or supply chain dispute, sector knowledge may help the mediator grasp the issues quickly and test the parties' positions with authority. Consider whether you need a facilitative mediator who helps the parties find their own solution or a more evaluative one willing to offer views on the merits. Ask colleagues for recommendations and speak to candidates before appointing one.
A settlement can only be reached if someone in the room has the authority to agree to it. Make sure that each side sends a decision maker with genuine settlement authority, not a representative who must defer final decisions for formal internal approval or subsequent governance process. Where full authority is impossible, as with some public bodies or insured parties, flag this early and agree how approvals will be obtained on the day. The presence of senior people also tends to shift the conversation from legal argument to viable outcomes.
A well-crafted position paper educates both the other side and the mediator on your view of things. Keep it focused and persuasive rather than exhaustive, and avoid inflammatory language that hardens positions. Remember that your real audience may be the opposing decision maker, who may not have heard your case presented clearly before. Agree a core bundle of key documents rather than burying the mediator in paper.
The joint opening session is often the only time you and others in your party speak directly to the other side's decision maker. Use it to set a constructive tone: acknowledge the commercial relationship, show that you understand the other party's concerns, and explain your position calmly and confidently. Make it clear that you’re there to make a deal. An aggressive opening may play well with your side but can entrench the other side. In some disputes, it may be better to dispense with a joint session altogether if it would just be used to air grievances; discuss this with the mediator in advance.
Much of the real work of mediation happens in private sessions with the mediator. Try to utilise the mediator’s skills by testing your own case as well as the other side's. Be clear about what information is confidential and what the mediator may pass on. Use these sessions to explore underlying interests, such as cash flow, reputation, or future business, that may open the door to settlement terms a court could never award.
Commercial disputes rarely have to end with a single payment. Consider creative options such as revised pricing, extended contract terms, credit against future orders, staged payments, revised service levels, or a fresh supply agreement. These solutions can bridge a valuation gap and preserve a relationship that both parties have reasons to keep. Come prepared with a range of acceptable outcomes rather than a single bottom line. However, in preparation for the session the attendant considerations regarding procurement viability/risk and governance will need to have been worked through in respect of the creative outcomes.
Clients often arrive at mediation expecting vindication. Part of your role is to prepare them for a process built on compromise, where a good settlement is one that both sides can live with, not one that delivers everything. Discuss in advance how negotiations typically unfold, including the likelihood of slow early movement and late-night progress. Keeping your client calm and realistic as the day goes on is as important as any legal argument.
Momentum is fragile. If agreement is reached, record the key terms in a signed settlement agreement before anyone leaves. Bring a draft template with you and think in advance about payment terms, confidentiality, releases, the treatment of costs, and how any existing proceedings will be resolved. If the matter does not settle, keep lines of communication open: many disputes settle in the days or weeks after mediation, often with the mediator's continued help.
Mediation is not a sign of weakness or a mere procedural box to tick. For contractual disputes in particular, it offers a chance to resolve matters quickly, privately, and on terms the parties design for themselves. Success in mediation comes from preparation, judgment, and the right approach on the day. By following these ten tips, parties can approach their next mediation with confidence and give their clients the best possible chance of a lasting, commercially sensible resolution. Indeed, overlook mediation at your peril, following Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 and the subsequent Civil Procedure Rules changes effective from 1 October 2024, the Courts can order parties to engage in alternative dispute resolution processes such as mediation. An unjustified refusal therefore needs to be considered not merely tactically, but in the context of potential costs consequences.
Share this:
Podcast
VLOG
Latest News
