What are the advantages of mediation?

Why business mediation?

Companies choose mediation to resolve business disputes because of the following advantages of mediation:

1. Confidentiality: Protecting sensitive business information, such as trade secrets and intellectual property, and protecting reputation.
2. Speed: Mediation is usually much faster than court proceedings and even faster than arbitration. This is a significant advantage, especially when time-sensitive business activities are at stake.
3. Control over the outcome: In mediation, the parties retain control over the outcome of the proceedings. This is different from court proceedings or arbitration, where a third party decides on a claim.
4. Preservation of relationships: If it is vital to maintain a good business relationship with the other party, for example, because there are few other parties with the expertise or because it concerns a long-term contract, mediation is the preferred dispute resolution method. Court proceedings or arbitration are generally not conducive to the relationship.
5. Lower costs: Business mediation is generally very cost-effective due to the shorter duration of the proceedings and limited exchange of written documents.
6. Customisation and creativity. Customisation is desirable in complex business disputes. In addition, mediation offers the opportunity to propose creative, “out-of-the-box” solutions.

Would you like to know more about how legal counsel and attorneys in the Netherlands view business mediation? Read the 2024 research report by Platform Business Mediation here (in Dutch). Some noteworthy and hopeful findings from the report:

• Legal counsel and attorneys have a clear need for a mediator who plays a proactive role in mediation.
• Mediation is an effective tool for resolving disputes with an average success rate of over 80%.
• Users of business mediation are predominantly satisfied and give the process and the mediator an average rating of 7.8.

Draft a mediation model clause

When is business mediation less suitable?

In some cases, there are indications that business mediation is not or less suitable for resolving the dispute:

• In some cases, mediation is not or less suitable.
• The parties want a public ruling from a judge or arbitrator on a specific issue.
• It is likely that one of the parties is using mediation to delay matters.
• The persons involved are unable to engage in reasonable discussion.
• The dispute has escalated to such an extent that reasonable discussion is no longer possible.