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

Which of the following is an advantage of mediation over litigation for two companies wishing to preserve their long-term trading relationship?

Mediation is private and non-adversarial, which helps preserve business relationships and allows flexible commercial solutions that a court might not be able to order. It does not impose a binding result without consent, and it favours no party automatically.

  1. AIt is private and non-adversarial, giving scope for a commercial solution that a court could not orderCorrect
  2. BIt always produces a legally binding result without the parties' consent
  3. CIt guarantees that the dispute will be resolved in favour of the stronger party

Explanation

Mediation is private, flexible and cooperative, so parties can craft creative commercial solutions and keep the relationship intact. It is not binding without agreement, and it gives no guaranteed outcome for either side.

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