Money, financial and commercial disputes

Disputes about money are very common.

Financial issues can be complicated. And the final outcome can be uncertain and unpredictable. In the best-case scenario, the debt will be paid up in full and there will be no expenses. In the worst-case, though, the debt won’t be paid at all and you’ll be saddled with a hefty legal free.

Recovering debt using traditional methods is unfortunately not always easy. It can produce  conflict and stress which can break down the relationship between the parties.

In this page we look at some of the most common financial and money-centred disputes, and how mediation can provide a solution. Mediation is a fast and proven way to settle  these disputes and arrange repayment arrangements which can be legally binding but avoids a long and expensive court case. The mediator acts as a neutral third-party and helps to find the sticking points that have been in the way.

We have written a step-by-step guide to civil mediation that explains how the process works.

We can offer a free 30-minute telephone consultation if you want to discuss your problems in confidence.

Recovering a debt requires persistence.  Sometimes the person who owes you money just refuses to reply to your emails and phone calls.

Chasing a debt means you have to stop being nice. Making this psychological switch is essential, especially if the person refusing to pay you is a friend or someone you have previously had a good relationship with. 

What sort of disputes can mediation help with?

Debts – personal and commercial

If someone owes you money and is refusing to pay it then mediation might be able to help you.

But it is not the first step. At the very beginning you need to establish:

  • Does the person definitely have the money to pay?
  • Do you have their address?
  • Are they willing to pay you anything at all?

Once these are sorted out then often the next step may be to commence  legal action in order to reclaim the debt. This will almost certainly require you to pay a fee.

Mediation can help if there is a disagreement between you and the other person over the amount of money that is owed or the terms of payment.

We have written a much fuller and more detailed guide to debt collection.

Disputes with insurance companies

Insurance companies are large organisations that can be imposing and unapproachable to deal with. Often disputes arise because of exclusion clauses and conditions that can be open to interpretation.

Disputes over wills and inheritance.

Disputes over wills and family assets can be extremely upsetting and emotional. Alongside the money there are complicated emotions and family dynamics which can, if badly handled, cause long-lasting and bitter rifts that are very deep. 

Challenging a will is expensive if legal costs mount, and these cases are notoriously unpredictable. Did the deceased really understand what their will meant? Were they of sound mind and were they under inappropriate pressure when they wrote it?  

Partnership and shareholder disputes

If businesses break up then the partners may disagree about who is owed what. Frequently these partnership disputes are complicated because the amount that of them has contributed to the business is unclear. Future trading arrangements, including business secrets and previous/future clients, can be major factors in getting a properly balanced outcome.

In disputes between doctors (General Practitioners) GP partnerships, the British Medical Association now advocates mediation.

I am happy I could resolve this problem this year and I can forget everything, it was a nightmare… , I think it was a win-win situation for both 🙂

MHM Client

Mediation or legal action? Which is better?

Sometimes mediation and legal action have to run in parallel with one another. The threat of impending legal action may be necessary to bring the debtor into negotiations in the first place. But mediation can often provide a better solution than legal action, especially in complex disputes. 

Mediation does not prevent you from pursuing legal action. If mediation is unsuccessful then legal action is still possible. And mediation is “without prejudice” – a legal term which means that anything offered or bargained with in a mediation that is unsuccessful cannot be used or relied upon in future legal proceedings. To put it another way, what goes on tour stays on tour. We have written a guide on how mediation lets you keep control.

Increasingly, though, the boot is on the other foot. Courts are now expecting that mediation has been attempted before they will hear a case. Partly this a response to the time pressures that the courts are under. But it also reflects the feeling in the legal world that mediation is a better way of resolving disputes than legal action. And failing to even attempt mediation could be considered an unreasonable act of bad faith.

Far from being a sign of weakness, the use of and the offer of the use of [mediation] is wise, culturally normal and indeed would be expected by the Court.

Civil Justice Council 2018 report

Richard was involved in the 2019 Free Mediation Project event at the Royal Courts of Justice in London which was set up to carry our mediations literally on the day of court hearings.

Debt collector knocking on the door

Advantages of mediation in debt collection

  • Mediation allows for creative, realistic and practical solutions to be worked out, rather than a solution imposed by a court that may be impossible to deliver.
  • Mediation has lower fees and a higher success rate than legal action
  • Legal action creates a bad atmosphere and hinders any ongoing business or personal relationship between the parties
  • Mediation can be arranged more quickly than legal action, and most cases can be resolved in one day or less.
  • It is less formal than going to court and considerably less intimidating.

What sort of cases are suitable for mediation?

Mediation is especially suitable when one or both parties want to:

  • Reduce their costs – especially legal fees and court costs.
  • Retain an element of control over the process and set their own priorities
  • Resolve the dispute quickly
  • Maintain a good relationship in the future

It is not suitable in cases where

  • One or other party is acting in bad faith or is refusing to cooperate.
  • One of the parties has their heart set on a ‘day in court’ in order to publicly humiliate or criticise the other

How does mediation work?

Mediation is a consensual process. The two parties in dispute work together to find a solution that works for both of them. The mediator acts as a facilitator to help them reach agreement.

On the face of it, this is very different to a legal solution put forward by a judge. A judge listens to both sides and then imposes a solution based on legal precedent and on their own understanding of the case. In particular mediation permits the parties to

  • take into account a wider range of options
  • balance them in a way that they think is appropriate, and
  • reach a solution that they both feel equally comfortable about.

Mediation is conducted under strict rules of confidentiality. In particular, anything that is said to the mediation remains fully confidential, and anything revealed to the other party is only valid until the process is concluded, The final terms of the settlement also remain confidential. 

We have written a step-by-step guide here.

Choosing a mediator

There are several factors important in choosing a mediator

  • Impartiality – the mediator must be viewed by both sides as being impartial, having no particular reason to favour one or other party and completely unbiased.
  • Costs and fees – it is important to understand the costs of mediation, including costs of rooms/premises and any associated expenses. More information…
  • Training and qualification – mediation requires specialist skills and training and experience. In the UK mediators are registered with the Civil Mediation Council.
  • Style and personality – you might find that some mediators are more approachable and easy to get on with and relate to.

Relevant experience

Richard has spent many years resolving disputes between customers in the music ticketing industry. In 2004 he set up Scarlet Mist , a website dedicated to providing an alternative to ticket touts and allowing face-value trading of spare or unwanted  tickets for music festivals and gigs. 

When disagreements arose between users of the system then tempers often flared up. Sorting out these disputes quickly, cheaply and amicably has always been a difficult task.

Case History

Brotherly love?

A man owned a house that he rented out to tenants. He offered it to his brother at ‘mates rates’. The house was badly in need of repair and refurbishment, and the brother offered to carry out some of the work in exchange for a reduction in the rent.

A considerable amount of work was done, but the brothers fell out over the sums that had been spent. The tenant stopped paying rent, the landlord spent a considerable sum on legal fees to have his brother evicted and the other members of the extended family were dragged in to take sides with one or other.

Mediation is never a win-win for both parties. Rather it is a lose-lose. But both sides have to feel that the other has lost as much as they have and the the final outcome is as fair as it could be.

More information