What Is Economic or Business Mediation?
Sometimes it is extremely difficult to settle conflicts and cases prior to trial. This is due to the fact that parties in dispute are no longer able to find a way out in any way because both positions are solidified.
But often parties want an ongoing business relationship or need each other in market.
Economic or Business Mediation is a great way to save the parties’ a tremendous amount of money in legal fees as commercial conflicts, civil law litigation and divorce trials are extremely expensive.
Advantage of business mediation: Please consider that a conflict should be solved regularly within 10 hours, sometimes it takes some days - the mediator charges on a hourly rate - for court proceedings you have to invest 2,500 EUR in minimum in Germany (claim more than 10,000 EUR) and you have the risk to bear the Lawyer Fees of your opponent in addition.
Mediation is a speedy, cost-effective and private form of dispute resolution that is reliant upon the parties reaching a consensus. A mediator does not reach a decision at all, still less one that binds the parties.
The mediator uses joint and private sessions to assist the parties to reach consensus. In private sessions he will challenge and question the thinking and personal interests behind the position adopted and explore alternative approaches by methods developed in communication science.
Mediation allows parties who are in all kind of conflicts, thinking about litigation or arbitration, to put disputes behind them and avoid the personal and commercial effects of being engaged in costly and lengthy disputes before courts. Parties also find mediation attractive because of its high success rate and because it allows parties to ‘think outside the box’. A settlement can be structured to include arrangements which could not be obtained from a Judge or Arbitrator: they cannot restructure a trading or business relationship. If therefore the parties want an ongoing relationship, the ability to craft a remedy in mediation is often preferable to the blunt instrument of litigation or arbitration.
There is no judge or third party arbitrator to pass judgment on the matter and make one party the winner and the other the loser.
Courts and mediation
In accordance with the EU Guideline on Mediation the mediation bill is enacted in Germany. Despite the fact that the new German law does not make mediation mandatory in German court proceedings all courts are obliged to ask the parties if they agree in a court mediation.
Business Mediation is no longer simply an option. Increasingly, courts in the Germany, UK and in other jurisdictions around the world expect parties to take the opportunity to mediate. More and more, parties are turning as a matter of course to mediation as the first resort, before litigation or arbitration. Even when disputes are close to trial, experience in the courts shows that Judges are increasingly willing to allow time for mediation when costs appear out of proportion, and to demand an explanation where the parties resist.
In Germany, business mediation is a voluntary proceeding defined in 5 clearly defined steps by which the parties involved in a legal dispute can enter into a direct dialogue to resolve their economic issues by themselves devising creative solutions which then flow into an agreement on how they want to work together in future.
A further key element of mediation is that proceedings are confidential. The matters discussed cannot be disclosed, whether by the parties themselves or by their mediator even if the parties decide to break off mediation.
Mediation has the advantage that the parties to a dispute are able to resolve it by acting together - no winner and no loser.
Interplay with Litigation or Arbitration
Mediation and litigation on the other, are not mutually exclusive paths. Parties often mediate during litigation or arbitration due to the perception that it can be better done after the issues are defined by the litigation process and sufficient steps have been taken to enable the parties to properly assess the merits of their respective positions to enable realistic settlement discussions within mediation.
Mediation at every stage of dispute
Mediation can, however, take place at any time: before the commencement of any formal process, during a formal process and indeed after a judgment or award whilst an appeal is pending.
Furthermore, we as certified and approved Mediators are skilled at the “art of negotiation” especially in the highly emotional realm of commercial and divorce law. Also in high-conflict cases, an experienced mediator will know that it will be much more productive to find effective solutions that reflect the business needs of the parties.
Business Mediation allows the parties to designate a mediator (agreed upon between the parties voluntarily) who shall try to find a mutual settlement of a dispute. The area of mediation is not restricted because the methods are universal.
Both parties must pay the mediator their hourly rate.
Feel free to contact us every time!
Contact Mr. Michael Feinen, Weißenburgstr. 74 , 50670 Köln
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