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

Ivor Ltd wants to resolve a dispute with a long-term customer while keeping the business relationship, with low cost and confidential handling. Which feature makes mediation suitable compared with litigation?

Mediation is private, flexible and controlled by the parties, which helps preserve commercial relationships. It is usually cheaper and less adversarial than litigation, but it does not guarantee a result, produces no precedent and gives no right of appeal.

  1. AIt results in a binding precedent for future cases
  2. BIt is private, flexible and controlled by the parties, which helps preserve relationshipsCorrect
  3. CIt guarantees a final outcome because the mediator decides
  4. DIt allows appeals on points of law to a higher court

Explanation

Mediation is confidential, flexible, usually cheaper and cooperative, so relationships are often preserved. It creates no precedent, no mediator decision, and no appeal route. Its main weakness is that there is no guaranteed resolution.

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