What Makes a Commercial Mediation Successful? 3 Things That Matter

A successful mediation does not begin when everyone enters the room.

It starts with preparation and whether the parties are genuinely prepared to explore whether the dispute can be resolved.

You can have experienced lawyers, detailed position papers and a skilled mediator. But if one party arrives determined not to listen, negotiate or genuinely consider alternatives, the mediation risks becoming an expensive box-ticking exercise.

Success at mediation does not mean settling at any cost.

It means using the process meaningfully to determine whether a commercial resolution can be reached that is preferable to the cost, risk and disruption of continuing the dispute.

In our experience, three things give mediation the best chance of success.

1. Approaching mediation in good faith

Simply attending is not enough.

Approaching mediation in good faith means genuinely engaging with the process, listening to the other party and exploring whether the dispute can be resolved.

That does not mean a party must settle, make a particular concession or abandon a position it genuinely holds.

It means approaching the process with an open mind, testing your position and properly considering the available options for resolving the dispute.

Mediation is not simply an opportunity to repeat the arguments already raised in correspondence.

It is an opportunity to listen to the other party and identify misunderstandings, areas of common ground or practical solutions that may not have been apparent from the written positions alone.

You do not have to agree with the other party to understand its position.

2. A realistic understanding of the legal and commercial position

Parties should understand the strengths and weaknesses of their position, the evidence available to support it and the risks of continuing the dispute.

An unrealistic assessment of the case can make meaningful negotiation almost impossible.

The legal issues are also not always the only issues.

The commercial realities may include:
• Further legal costs
• Months or years of litigation
• Significant management time
• Cash flow and reputational impacts
• Damage to an ongoing commercial relationship
• The uncertainty of having someone else decide the outcome

Mediation rarely ends with either party receiving everything it wanted.

The better question is often not whether a proposed outcome is perfect. It is whether that outcome is preferable to the realistic alternatives.

Compromise is not necessarily a sign of weakness. In the right circumstances, it is a commercial decision to manage risk and bring the dispute to an end.

3. Preparation and the ability to make decisions

Mediation requires more than knowing the legal arguments.

Before the mediation, each party should understand:
• What it needs from any settlement
• Which outcomes are commercially important
• Where it may be prepared to compromise
• What information is needed to assess a proposal
• Who must approve any agreement

The people attending should have the information and authority needed to properly assess settlement proposals and make decisions.

Momentum can quickly be lost if every possible resolution needs to be referred to someone who is not in the room.

Coming prepared does not mean deciding the outcome in advance.

It means being ready to respond to the discussion as it develops and make informed decisions if an acceptable resolution becomes available.

Final thoughts

Mediation does not guarantee that a dispute will resolve.

However, genuine participation, a realistic assessment of the dispute and proper preparation give the process its best chance of success.

Even where an agreement is not reached on the day, mediation can narrow the issues, improve the parties’ understanding of the dispute and create a pathway for further negotiations.

At Bird Law, we approach mediation by looking beyond the legal position. We work with our clients to understand the commercial drivers, assess the realistic alternatives and identify what a workable resolution may look like.

Turning up is only the first step.

The value comes from being prepared to participate meaningfully and work towards a commercial resolution.

Authored by Nadine Uysal, Lawyer at Bird Law