How does commercial mediation work?

Before the session: preparation

Effective commercial mediation requires preparation. Each party typically prepares a confidential position paper (or mediation brief) setting out their case, their key interests, and their settlement parameters. This document is provided to the mediator before the session — it may or may not be shared with the other party, at the submitting party's election.

The mediation session

A typical commercial mediation session follows four stages:

1. Opening joint session — The mediator explains the process and ground rules. Each party (or their legal representative) makes an opening statement. The parties hear each other's perspective, often for the first time in a controlled setting.

2. Private meetings (caucus) — The mediator meets privately with each party in turn. These are the most productive part of the process — the mediator explores each party's real interests, tests the strength of their positions, and begins to identify the parameters of a possible resolution.

3. Negotiation — The mediator moves between the parties (shuttle mediation) or brings them back together to facilitate joint negotiation. The mediator may reality-test proposals, suggest options, and help the parties find creative solutions that a court could not order.

4. Agreement — If the parties reach agreement, the heads of agreement (or a full deed of settlement) are drafted and signed before the session ends. This agreement is a binding contract.

Who attends?

Commercial mediation typically involves: the parties (decision-makers with authority to settle), their legal representatives (solicitors, barristers), and the mediator. Technical experts or insurers may attend where relevant. It is essential that the person attending has genuine authority to settle — sending someone without authority is a common cause of failed mediations.

Is commercial mediation different from court?