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Mediation – the ‘no-brainer’ for SME’s

26 March 2018

 Mediation – the ‘no-brainer’ for SME’s

Disputes in the commercial world are often unavoidable but how many SME’s will devote valuable resources - including people, time and money - to dealing with them by the traditional litigation method?

There are no clear statistics on this, but what we do know is that in 2016 a mediation audit undertaken by the Centre for Effective Dispute Resolution (CEDR) estimated that mediation would save businesses around £2.8 billion that year in management time, relationships, productivity and legal fees.

It’s not hard to see how these figures are calculated, since commercial cases can take years to reach court. It’s not just the time - as the CEDR audit highlighted, it’s the collateral damage that drains businesses at a time when resources are vital. Traditionally the winner in any litigation gets their costs paid, but even in this scenario it only means the legal costs - it does not reimburse the business for the hours of work spent by personnel preparing witness statements, bundles of documents, meetings with lawyers, copies of correspondence .....the list goes on.

The reality is, crucially for businesses, that mediation is significantly cheaper than traditional court action. A commercial case listed for two days in the High Court could easily be expected to cost £50,000- £100,000, whereas mediating the same case will cost in the region of £5,000.

In a recent commercial mediation, the parties estimated the total costs in running the case, including a ten day high court trial, to be around £2.5m whilst the maximum value of the claim was £1.5m. Unsurprisingly, a day’s mediation and several follow-up meetings resolved the case.

There’s more than just a financial advantage - in court, solutions tend to be binary whereas mediation provides a means of finding a broader solution more likely to preserve business relationships and come up with creative options that the courts cannot propose because of their limited remit.

It’s faster, cheaper and preserves business relationships – a ‘no brainer’.

Dorcas Crawford is a mediator and founder of the better way a Belfast based mediation service.

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