An important business relationship may be at stake. Litigation can jeopardise relationships. Mediating clears the air, enabling you to have frank conversations and get the relationship back on a constructive footing – and it also works in the workplace.

An underlying problem may involve cashflow issues. Mediating can flush this out, allowing you to settle on the best available terms. Why waste time or incur avoidable expense?

Year-end figures need boosting. Disputes often involve making accounting provisions or adding notes to the accounts. Although claims are invariably higher than final settlement amounts, auditors often recommend conservative allocations. By mediating, you can take a litigation off the books or significantly reduce the likely settlement range. Releasing or reducing a provision can significantly impact year-end figures.

Your time would be better spent running the business. Or you simply don’t need the stress. Don’t underestimate how time-consuming and stressful litigation can be. No matter how strong your case appears, it won’t feel like that when you read the other side’s lawyers’ letters, when legal costs are mounting, or when the dispute causes frictions at work.

Your claim is for less than £200,000. For a small business that money can be vital. Litigation is invariably not cost-effective because of the high legal costs involved.

If you are thinking of litigating, make sure you know what you are getting into first and what the costs are likely to be through to the end of trial. Even with a ‘strong case’, if you ‘win’, your net recovery is unlikely to exceed 50% of your claim and you could end up out of pocket. If you lose, you’ll probably be on the hook for your legal costs, about 70% of theirs, and any counterclaim.