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ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms

Ismay Ltd is considering mediation rather than court action against a long-term customer, Jarrah Co, wishing to keep the business relationship. Which is a recognised advantage of mediation in this situation?

Mediation is confidential and flexible, which helps preserve the commercial relationship. The parties control the outcome cooperatively. A mediator cannot give a binding judgment, and there is no guarantee that a settlement will be reached or reached within any set time.

  1. AThe mediator can issue a judgment enforceable without further agreement
  2. BIt is confidential and flexible, helping preserve the commercial relationshipCorrect
  3. CIt guarantees a settlement within a fixed period

Explanation

Mediation is private, flexible, and cooperative, which helps preserve relationships. A mediator cannot issue a judgment, and no settlement is guaranteed because the process is voluntary.

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