In the course of the life of a business, disputes are inevitable. No matter how hard you try to give good service at a reasonable price, clients will occasionally be dissatisfied. Just because a disagreement occurs, it doesn’t mean you have to lose the client forever. Court battles can be costly and acrimonious, so before going into an all-out battle, you may want to consider alternate means of dispute resolution, such as mediation.
Mediation in a Commercial Context
After you attempt unsuccessfully to settle the dispute with your client, mediation is a means of continuing negotiations by bringing in a neutral outsider to assist you. Contrary to arbitration, mediation is not a binding process, which means the mediator cannot impose a deal. However, the presence of a neutral third party who is there specifically to move discussions along can significantly change the dynamics of the negotiation and hopefully bring you and your client closer to an agreement while salvaging the relationship.
By definition, mediation is voluntary, noncoercive, informal, and confidential. The idea is to move away from determining who is to blame and what went wrong, and focus on what solutions would be acceptable to both parties. By focusing the discussions on solutions, the mediator can sometimes make a significant difference.
The mediator may meet with the parties together but also privately. Sometimes, if the parties are simply too upset to be in the same room, the mediator can go back and forth between the parties to try to bring them closer together. There is no single correct way of conducting a mediation. Essentially, the mediator adapts himself or herself to your particular situation and tries to act as a facilitator.
The Mediation Agreement
Mediation is initiated by the parties who need to agree upon and draft a mediation agreement that sets out how they will proceed. The mediation agreement must contain several different elements. It should cover the logistics of the mediation, the cost sharing of the mediation, the extent of the mandate of the mediator, and the mediator’s remuneration. It could also cover the use of subsequent processes if mediation is unsuccessful.
The Canadian Department of Justice offers a free online sample mediation agreement that you can use as a starting-off point, but depending on the complexity of your particular case, it may be worthwhile to consult a professional who will draft a customized agreement.
The choice of the mediator is also a key element in the eventual success of the process. Many attorneys have received special training and frequently act as mediators. Nonprofit organizations, such as the Canadian Commercial Arbitration Centre or the ADR Institute of Canada, also offer mediation services. Your ideal mediator is someone who has some knowledge of your particular industry and understands what the dispute is about.