When a supplier misses deliveries, a partner disputes a payment, or a client refuses to honour a contract, court may seem like the natural first step. It can be the right choice, but it is not always the quickest or least costly option.
What mediation offers
Mediation is a structured negotiation, guided by a neutral third party, aimed at reaching an agreement both sides accept. It's typically faster than litigation, costs less, stays private rather than becoming part of the public court record, and preserves a working relationship where the parties still need to do business together afterward.
What litigation offers
Litigation produces a binding, enforceable judgment. It may be appropriate when a party will not negotiate in good faith, a clear breach needs a formal ruling, or a public precedent or enforcement mechanism is required.
How to decide
A few questions usually clarify which route fits:
- Does the contract already specify arbitration or mediation as the required first step?
- Is there an ongoing business relationship worth preserving?
- How urgent is resolution, and can both sides afford a lengthy court process?
- Is the dispute mainly about facts and figures, or does it hinge on a legal interpretation that needs a court's ruling?
Check the dispute resolution clause first. Some commercial contracts require mediation or arbitration before litigation.
Before you file anything
Review the contract and the facts before choosing a route. Negotiation or mediation may resolve the dispute while leaving litigation available if those efforts fail.
Discuss your dispute