The advantages of mediation to manage commercial conflicts

Andreu Calvet Cortés

Commercial conflicts are an inevitable reality in the business world. Conflicts arise from contract breaches or interpretation disputes, payment issues, quality problems with contracted products or services, deadline breaches, among many other examples. When these types of conflicts emerge, companies must seek quick, efficient, and if possible, discreet solutions to minimize negative impacts on their operations, finances, reputation, and relationship with the company they’re in conflict with. In this context, commercial mediation emerges as a particularly attractive option for managing conflicts or disagreements that may arise between companies.

While legal action may sometimes be the best option for resolving a particular conflict, this traditional path isn’t always the most appropriate. There are many other mechanisms available to companies for better resolving their conflicts, and this is where Alternative Dispute Resolution Mechanisms (ADR) come into play. For each type of conflict, one must analyze and determine the best available tool to manage it. This analysis takes into account multiple factors, such as: the reputational risk involved in the conflict, whether there’s a desire to continue the commercial relationship, the urgency needed for resolution, costs, among others.

There are many advantages that make mediation the best tool, in many cases, for managing commercial conflicts. Below are the advantages of this methodology compared to traditional legal proceedings:

1. Speed in Conflict Resolution

One of the main advantages of commercial mediation is its agility. The mediation process can be carried out in much less time than judicial proceedings, which can drag on for years. In mediation, the involved parties, with the help of a specialized mediator, can reach an agreement in a matter of days or weeks, depending on the case’s complexity. This allows companies to continue their operations without the interruption of a prolonged conflict.

In contrast, the judicial system tends to be slow and bureaucratic. Commercial cases can be transferred to higher courts, with a heavy workload that causes judicial proceedings to extend longer than necessary.

2. Specialization of the Mediator and Other Professionals Who May Intervene in the Process

In mediation, one of the key factors is the mediator’s specialization and the possibility of incorporating experts in specific areas into the negotiation. A mediator with experience in commercial and business matters brings deep knowledge of the sector, as well as a detailed understanding of business interests and dynamics. This enables proposals to be realistic, practical, and adapted to the specific needs of the parties involved.

Unlike this, in courts, judges may not have specific training in the business sectors involved in the conflict. This can hinder complete understanding of technical issues and the most suitable solutions for conflict resolution.

3. Procedural Flexibility

Mediation offers great flexibility in terms of procedure and solutions. The agreements reached by the parties can be adapted to their specific needs and the circumstances of the conflict. Mediators can customize the process to ensure all parties feel comfortable and heard. Everything that allows parties to feel fully comfortable with the negotiation process can be agreed upon, such as its duration, the professional who will conduct the mediation, the location of the mediation, etc. The judicial system is much more rigid in this regard and does not allow modification of the procedure established by law.

4. Confidentiality and Protection of Business Reputation

One of the main reasons many companies choose mediation over the judicial system is the protection of their reputation. Everything discussed in a mediation session is protected and completely confidential. This means that, even if an agreement isn’t reached, the discussions cannot be used as evidence in subsequent judicial proceedings. This is essential for companies wanting to prevent a conflict from reaching public opinion and damaging their image.

In contrast, judicial proceedings are public. Judgments and presented evidence are documented and can be accessible to anyone, including the media. This can have a negative impact on the company’s reputation, affecting its brand image and the trust of clients and business partners.

5. Maintenance of Commercial Relationships

Another important advantage of mediation is that, in many cases, it allows for maintaining commercial relationships between parties in the future. Since mediation focuses on finding solutions acceptable to all parties, it’s possible to reach agreements that allow commercial collaboration to continue. Parties are not forced to take a confrontational position and can find solutions that allow for a mutually beneficial agreement.

In contrast, judicial proceedings often leave a sense of winner and loser. This can deteriorate commercial relationships between the companies involved, making it difficult or impossible to collaborate in the future.

6. Creative Solutions and Flexible Agreements

Mediation also opens the door to more flexible and personalized solutions. A mediator can help parties think outside the box, working on agreements that might not be contemplated in a court decision, such as special payment agreements, new commercial conditions, new forms of business cooperation, among others.

Solutions imposed by a judge are limited and conform to the possibilities established by the legal framework, but don’t always take into account the particularities of each situation or long-term commercial relationships between parties. This can generate a solution that isn’t satisfactory for all involved, creating more tensions in the future.

Commercial mediation presents itself as a powerful tool for resolving business conflicts, offering clear advantages in terms of agility, specialization, flexibility, and confidentiality, all while maintaining a collaborative relationship between the involved parties. While the judicial system has a fundamental role in conflict resolution in cases where agreement isn’t possible, mediation provides an efficient alternative that can save time, resources, and, in many cases, preserve long-term commercial relationships. In a business environment where speed, discretion, and relationship continuity are key, mediation establishes itself as the best option for managing commercial conflicts effectively and satisfactorily, always seeking maximum benefit for the involved parties.

Commercial disagreements cannot be avoided, as they are inherent to economic and business activity, but the negative consequences of these conflicts can be avoided or minimized, and they can be turned into opportunities to build a better scenario for all parties involved and maximize their benefits.