Business Dispute Mediation

What is business dispute mediation?

Mediation is a form of alternative dispute resolution. It involves an expert mediator facilitating discussions between the parties who are involved in the business dispute. It usually costs less and is less formal than Court.

Who usually attends a business dispute mediation?

The attendees of a business dispute mediation typically include:

an independent expert mediator;
the parties to the business dispute; and
lawyers who represent each of the parties to the business dispute.

What does a mediator do?

A mediator typically facilitates discussions between the parties and helps to guide them towards a mutually agreeable outcome. A mediator generally does not make a binding decision themselves, as it is up to the parties to ultimately agree on the resolution.

What is the aim of mediation?

The aim of mediation is usually to resolve the dispute in a fair and sensible manner which is mutually agreeable to the parties.

Who can I appoint as a mediator?

Who to appoint as a mediator usually depends heavily on the nature of the dispute. For that reason, we suggest getting preliminary legal advice about your options before appointing a mediator.
As a few examples:

if the dispute is between business owners, there may be a pathway for Court ordered mediation under the oppression provisions of the Corporations Act 2001 (Cth);
if your dispute involves a retail lease, you may be eligible to use the mediation service provided by the Victorian Small Business Commission;
if your dispute involves a claim by an employee, there may be options to use the Fair Work Commission’s conciliation service; and
if your dispute relates to commercial law, your mediator ought to be an expert in the relevant aspect of commercial law. This will allow them to authoritatively talk to the parties about the issues and the potential consequences if the matter ultimately went to Court.

As you will see from the above, there is no ‘one size fits all’ approach and it is important to think carefully about the best way of appointing a mediator for your business dispute. We are happy to advise you regarding your rights and options.

What if the business dispute isn’t resolved at mediation?

The best next step after mediation will depend heavily on:

the strength of your legal position;
the nature of the business dispute;
your unique pressure points, including any urgency to resolve the dispute;
whether the mediation came close to resolving the business dispute or not; and
other factors relevant to the dispute.

If the business dispute is not resolved at mediation, we can assist you to strategically plan the next steps.

What preparation do I need to do before business dispute mediation?

The optimal way of preparing will depend on the nature of the business dispute. However, as a general guide, it is worthwhile doing the following before the mediation:

getting legal advice so that you understand your legal position and the strength of your arguments from a legal perspective;
understanding what kind of remedy you would likely receive if the matter went to Court and you were successful, versus what would happen if you were unsuccessful;
workshopping what outcomes you would be willing to accept; and
preparing a strategic plan about how you will approach the mediation.

We are happy to assist you to prepare for a business dispute mediation.

When can mediation be used for a business dispute? Can I force someone to attend a mediation?

Some business disputes have mediation as a mandatory stage in the dispute resolution process. For example, mediation is often a mandatory step in disputes between owners of a business before the matter can proceed to a formal Court hearing.

Other business disputes do not have a mandatory mediation as a part of the dispute resolution process. For these disputes, mediation can nevertheless be requested even though it is not mandatory.

Please contact us if you need assistance working out whether you can compel someone else to attend a mediation.

Can I force my business partner to exit? Can my business partner force me out?

The ability to force out a co-owner depends on the relevant legal landscape that governs the relationship.

The documents that regulate the relationship between the co-owners (e.g. the Shareholders Agreement and Company Constitution) are key aspects of the legal landscape. The terms of these documents can be vastly different from situation to situation. Some of these documents provide a clear forced exit process, others do not. Looking at these documents is usually a sensible first port of call to understand what is and what isn’t possible.

If the documents governing the relationship between the co-owners do not contain a forced exit process, a forced exit can potentially be achieved with the assistance of the Court (e.g. via a winding up or oppression proceedings).

Alternatively, you can seek to negotiate a mutually agreed exit on appropriate terms. Some of the exit methods include:

an agreed sale of shares for a fair price;
a company buy-back of shares; and
a sale of the entire business to a third party.

We recommend obtaining tailored advice so that you can understand your legal position and strategic options.

I am having a disagreement with my business partner. What do I do?

We usually recommend seeking advice as soon as a dispute arises. This is primarily because disputes can rapidly become more serious if they are not resolved promptly, and strategic errors made in the early stages are often difficult to reverse.

Can I use mediation for a family business dispute?

Family business disputes often require a high degree of sensitivity given the family dynamic. Mediation can be particularly helpful for these disputes, as it traditionally provides a more private and casual setting for the parties to have settlement discussions.

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