Commercial mediation allows parties to retain control over the outcome of their dispute. Instead of leaving the decision to a court or arbitral tribunal, they can develop solutions that reflect not only their legal positions, but also their commercial interests.
This opportunity does not, however, guarantee a good result.
A mediator manages the process, facilitates communication and helps the parties explore possible solutions. A mediator does not represent either party or advise whether a proposal should be accepted or rejected. These decisions remain with the parties. Mediation advocacy provides the legal, commercial and strategic support required to make these decisions on an informed basis.
We recently concluded two successful mediations, which were strikingly different in nature. One process unfolded over several months before reaching a resolution. The other was completed in just over two weeks. Yet both shared a common thread: While our role as counsel and the respective mediation styles differed, the same disciplined approach to preparation and case management proved decisive in achieving the best possible outcome for our clients.
Mediation advocacy describes our role in preparing a client for commercial mediation, guiding the negotiations and turning any agreement reached into clear legal terms. It differs both from the role of the mediator and from conventional advocacy before a court or arbitral tribunal.
In litigation and arbitration, the lawyer’s principal task is to persuade a decision-maker of the client’s legal position. In mediation, there is no decision-maker to be persuaded. We instead help the client understand its position, evaluate settlement and non-settlement scenarios, define objectives and limits, develop possible solutions, negotiate effectively and translate any agreement into clear legal terms.
This requires a combination of legal analysis, commercial understanding, strategic judgment, negotiation experience and restraint.
Before entering into negotiations, the client needs a clear framework for evaluating possible outcomes. This includes identifying the desired result, the interests that must be protected, acceptable areas of compromise and any non-negotiable limits.
An important part of this exercise is assessing the client’s best and worst realistic alternatives to a negotiated agreement, commonly referred to as BATNA and WATNA. Relevant considerations include the prospects of success and evidential risks, the likely costs and duration of proceedings, enforcement or insolvency risks, the impact on management and internal resources, commercial and reputational consequences, and the future of the parties’ business relationship.
This analysis provides a benchmark against which proposals can be measured. It helps prevent the client from accepting terms that are worse than its realistic alternatives or rejecting terms that would leave it in a better overall position.
BATNA and WATNA do not produce a mechanical settlement figure. Legal and institutional constraints, such as mandatory law, directors’ duties, compliance requirements, equal-treatment considerations or the precedent created by a settlement, may exclude options that otherwise appear commercially attractive. Our task as counsel is to make the true decision space visible:
Which alternatives are realistically available? Which settlement options improve on them? Which limits must be respected?
Commercial disputes are usually expressed through opposing positions.
One party demands payment. The other denies liability.
One party insists on performance. The other seeks to terminate the contract.
A position describes a particular result. An interest explains why that result matters.
A demand for immediate payment may reflect a need for liquidity, security or planning certainty. A refusal to pay may be driven less by the amount than by concerns about precedent, reputation or similar claims from other parties.
Once the underlying interests are understood, additional solutions may become possible. Depending on the circumstances, these might include structured payments, security, adjustments to future business, revised performance obligations or a package combining financial and operational terms.
Focusing on interests does not mean abandoning legal rights. It allows the parties to identify solutions that may be more practical, valuable or predictable than the outcome of litigation. A mediation counsel helps identify the interests on both sides and translating them into workable settlement options.
Mediation requires structured preparation. For corporate clients, this begins with the internal decision-making process. We would identify who needs to participate, who has authority to settle, who must be consulted and whether approval from management bodies, shareholders, insurers, lenders or other stakeholders may be required. The criteria for evaluating any settlement should be clarified in advance, not for the first time when an offer is already on the table.
Preparation also includes shaping the process. We as counsel may assist in selecting a mediator with suitable legal, commercial or sector experience and determining which participants can provide relevant information, assess the commercial consequences of the dispute or support the relationship between the parties.
The presentation of the case also requires consideration. Where appropriate, a mediation statement can help the mediator understand the dispute and its central legal, technical and commercial issues. We would consider whether an opening statement would assist the process and how our client’s position can be presented persuasively without unnecessarily entrenching positions.
A clear information and confidentiality strategy is equally important. The parties should understand the applicable confidentiality framework, including what may be disclosed in joint or private sessions and how information exchanged during the mediation may subsequently be used. Together with the client we would determine what should be shared, when it should be disclosed and what should remain confidential.
Preparation does not eliminate flexibility. It provides a framework within which the client can respond to new information and unexpected developments without making consequential decisions primarily under pressure or fatigue.
Effective representation during the mediation requires assertiveness, judgment and restraint. A mediation is not an oral hearing. Repeating every legal argument may entrench positions without improving the client’s negotiating position. At the same time, remaining silent when the client is acting on a serious misunderstanding or moving beyond an agreed limit would not constitute effective representation.
We would explain the significance of new information (if required), test the assumptions underlying an offer, compare a proposal with the client’s alternatives, request time for private advice, structure concessions carefully, develop packages combining financial and non-financial terms, or protect the client against undue pressure.
Parties may also use ambitious opening positions, deadlines, assertions of limited authority or threats to leave. Such techniques are not necessarily improper, but they must be recognised and assessed. We as counsel may test whether an asserted constraint is genuine, resist pressure for an immediate response, make concessions conditional or reciprocal and return the discussion to objective criteria.
There will also be moments when the client is the most effective person to speak, particularly when explaining the commercial impact of the dispute or addressing a damaged business relationship. The relevant question is whether a particular intervention by us as counsel or the client advances informed decision-making and supports the negotiation.
Even where the parties’ interests are understood, agreement is not automatic. Distrust, perceived unfairness, internal expectations or differing assessments of litigation risk may prevent progress.
Depending on the circumstances, progress may require clarifying disputed assumptions, separating individual issues, introducing objective criteria, developing conditional or package proposals or obtaining further information or internal approvals. A temporary adjournment may allow the parties to reconsider their assessments or continue negotiations once a particular uncertainty has been resolved.
A complete settlement is not the only useful outcome. Mediation may also result in agreement on individual issues, clarification of disputed facts, an exchange of information, a reduction in the matters requiring adjudication or an agreed process for continuing negotiations.
Effective advocacy is, therefore, not measured solely by whether a settlement is reached. If the available terms do not improve on the client’s realistic alternatives or fail to protect essential legal and commercial interests, declining them may be the right result. We would help our client to distinguish between an impasse that may still be overcome and a proposed agreement that should not be accepted.
Agreement on headline terms is not the end of the process. Legal precision is essential to ensure that the settlement resolves the dispute instead of creating new uncertainty.
We as counsel would then consider whether the agreement is intended to be immediately binding, whether approvals or other conditions remain outstanding, which claims, contracts and related matters are covered, how and when each obligation must be performed, whether security or enforcement mechanisms are required, what happens in the event of delay or non-performance, how pending litigation or arbitration will be dealt with, how costs, confidentiality and external communications will be handled, and how disputes concerning implementation will be resolved.
Good mediation advocacy turns the negotiated solution into an agreement that is legally effective, practically workable and, where appropriate, enforceable.
Effective mediation advocacy helps clients make informed decisions, negotiate with clarity and convert any agreement reached into a workable legal solution. It does not guarantee settlement, but it ensures that each possible outcome is assessed and pursued on a sound legal, commercial and strategic basis.
