What is alternative dispute resolution?

ADR is every way of resolving a dispute other than a judge deciding it: direct negotiation, mediation, arbitration and expert determination. It is not the soft option. Victorian courts expect parties to attempt it, routinely order mediation before trial, and can punish a party who refuses to engage sensibly with costs orders. For most businesses ADR is where the dispute actually ends, so the smart move is to arrive prepared rather than treat it as a formality on the way to court.

How does commercial mediation work?

Both sides meet with an independent mediator, usually for a day. The mediator does not decide who is right. They move between the rooms testing each side's confidence and carrying offers. Everything said is confidential and cannot be used in court later. A good mediator settles most of the commercial disputes that reach them, because by mediation day both sides can finally see the real strengths, weaknesses and costs. You come out with a signed settlement deed and the dispute is over that afternoon rather than after a trial.

What is arbitration and when does it apply?

Arbitration is a private hearing before an arbitrator whose decision binds the parties. It usually applies because your contract says so, and many supply, construction and joint venture agreements contain an arbitration clause that must be followed instead of going to court. The appeal rights are narrow, the process is confidential, and you help choose the decision-maker. If you have just found an arbitration clause in your contract, get advice before you file anywhere, because starting in the wrong forum wastes money and can weaken your position.

Can a court force us to mediate?

Yes. Victorian courts can refer a proceeding to mediation with or without the parties' consent, and in commercial lists they almost always do, often within months of the pleadings closing. Refusing to participate in good faith costs you, because the court rules oblige parties to try to resolve or narrow the dispute and judges reflect poor conduct in costs orders. So even if the other side sounds unmovable today, a structured settlement conversation is coming, and the question is whether you walk into it prepared.

Is VCAT better than court for a commercial dispute?

Sometimes, and it is honest to say sometimes not. VCAT is cheaper, faster and less formal, and it is the required destination for retail lease disputes, which must first go through mediation at the Victorian Small Business Commission. The trade-off is that at VCAT each party usually bears its own legal costs even if it wins, and complex, high-value commercial fights are better managed in the County Court or the Supreme Court's Commercial Court list, where a winner usually recovers a portion of its costs. Which forum suits your dispute is a first-call question, and ours is free.

What if the other side simply refuses to negotiate?

Then you change their incentives. A well-drafted letter of demand with a real deadline, a filed proceeding, or a Calderbank offer that puts their costs at risk each make silence expensive. Most refusals to talk are opening positions, and they soften once the refusing party gets advice on what losing would cost. We build that pressure deliberately and keep a settlement door open the whole way. Call 1800 130 120 and we will map the sequence for your dispute on a free first call.

Commercial Litigation

Commercial Dispute Resolution in Melbourne

Most commercial disputes end in a meeting room rather than a courtroom. Knowing how mediation, arbitration, VCAT and the courts really compare is how you get out faster and cheaper, on terms you chose.

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Want this dispute finished without a year in court?

What you actually want is this finished

Almost nobody rings a litigation firm because they want a courtroom. You want the money paid, the contract performed or the partner gone, at the lowest cost and with the least damage to the business. That is what dispute resolution is: choosing the cheapest path that still gets you a result the other side has to honour. Victoria gives you several paths and they are not equal. Choosing between them is the first real decision our commercial litigation lawyers make on a new file, and it shapes the cost of everything that comes after. If you want a quick, honest read on which one fits your dispute, call 1800 130 120. The first call is free.

Negotiation, done in a way that cannot hurt you

The first path is the direct one, and it is where lawyers earn their fee invisibly. Settlement discussions between lawyers run on a without-prejudice basis, which means nothing said in them can be quoted in court later. That protection is what lets both sides talk real numbers. Doing it yourself in open emails creates the opposite: a permanent record of every concession and every overstatement. A surprising number of the disputes we resolve end here, on the strength of one well-framed letter and a fortnight of protected negotiation. Plenty of contract disputes finish at exactly this point, well before anyone drafts a statement of claim.

Mediation: where most disputes actually end

If negotiation stalls, mediation comes next, and in court-managed commercial lists it is usually ordered whether the parties like it or not. Some sectors go further and write mediation into the relationship itself, which is what the Franchising Code of Conduct does to every franchise agreement in the country. The format is simple: one day, one independent mediator, each side in its own room, offers moving between them. The mediator has no power to decide the case. What they can do is make each side confront its real position, including the cost of fighting on.

Mediation rewards preparation far more than conviction. The side that arrives with a tight chronology, a costed view of trial and a planned offer sequence routinely leaves with the better deal. For most commercial disputes, mediation day is the day the case is decided, so treat it that way.

Arbitration and expert determination

Some contracts take the choice away. An arbitration clause sends the dispute to a private, binding hearing, with confidentiality and very limited appeal rights. Expert determination clauses are common in valuation and technical disputes, where an independent expert rather than a judge fixes the number and the contract makes it final. Neither is automatically better or worse than court. Arbitration buys privacy and a chosen decision-maker at a price, and the clause in your contract decides whether it applies at all. Check the dispute clause before you send anything, which we do on the first call as a matter of course.

Courts and VCAT, compared without the sales pitch

When resolution needs a public forum, size and subject matter drive the choice. Claims to $100,000 belong in the Magistrates’ Court. The County Court’s unlimited civil jurisdiction covers most mid-sized matters, and the Supreme Court’s Commercial Court list manages complex disputes tightly, with early ordered mediation built in. VCAT is cheaper and less formal, and retail lease disputes must go there via compulsory mediation at the Victorian Small Business Commission first. Its catch is costs, since VCAT parties usually wear their own win or lose, while court winners recover a portion of theirs. Anyone weighing the tribunal against a courtroom should understand what VCAT is built to handle before filing there. The right forum depends on your numbers, and getting that call wrong at the start is one of the most expensive mistakes in commercial litigation.

Settlements get won in the four weeks before the mediation, in the file the other side knows you could take to trial tomorrow. Very little of it happens in the meeting itself.

MK Law Group

A mediation date is in the diary and you are not ready for it

Preparation decides these days, and it takes weeks to do properly. One free call tells you what your file needs before you sit down opposite the other side, and how to get it there in time.

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Pick the exit before someone picks it for you

Every dispute ends somewhere: a negotiated deal, a mediated settlement, an arbitral award or a judgment. The parties who do best choose the exit early and steer toward it. Call 1800 130 120 or use the form on this page for a free first call on your dispute, whether it is a business fall-out, an unpaid debt or a contract fight. GET FREE ADVICE.

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Michael has been working in the Victorian legal system since 1986. MK Law Group acts for individuals, family businesses, and commercial clients across Melbourne, with a senior lawyer on every file from the first call.

"We take on the matters we know we can run well, and we are direct about the ones we cannot."

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FAQs

Frequently asked questions

What is alternative dispute resolution?

ADR is every way of resolving a dispute other than a judge deciding it: direct negotiation, mediation, arbitration and expert determination. It is not the soft option. Victorian courts expect parties to attempt it, routinely order mediation before trial, and can punish a party who refuses to engage sensibly with costs orders. For most businesses ADR is where the dispute actually ends, so the smart move is to arrive prepared rather than treat it as a formality on the way to court.
How does commercial mediation work?

Both sides meet with an independent mediator, usually for a day. The mediator does not decide who is right. They move between the rooms testing each side's confidence and carrying offers. Everything said is confidential and cannot be used in court later. A good mediator settles most of the commercial disputes that reach them, because by mediation day both sides can finally see the real strengths, weaknesses and costs. You come out with a signed settlement deed and the dispute is over that afternoon rather than after a trial.
What is arbitration and when does it apply?

Arbitration is a private hearing before an arbitrator whose decision binds the parties. It usually applies because your contract says so, and many supply, construction and joint venture agreements contain an arbitration clause that must be followed instead of going to court. The appeal rights are narrow, the process is confidential, and you help choose the decision-maker. If you have just found an arbitration clause in your contract, get advice before you file anywhere, because starting in the wrong forum wastes money and can weaken your position.
Can a court force us to mediate?

Yes. Victorian courts can refer a proceeding to mediation with or without the parties' consent, and in commercial lists they almost always do, often within months of the pleadings closing. Refusing to participate in good faith costs you, because the court rules oblige parties to try to resolve or narrow the dispute and judges reflect poor conduct in costs orders. So even if the other side sounds unmovable today, a structured settlement conversation is coming, and the question is whether you walk into it prepared.
Is VCAT better than court for a commercial dispute?

Sometimes, and it is honest to say sometimes not. VCAT is cheaper, faster and less formal, and it is the required destination for retail lease disputes, which must first go through mediation at the Victorian Small Business Commission. The trade-off is that at VCAT each party usually bears its own legal costs even if it wins, and complex, high-value commercial fights are better managed in the County Court or the Supreme Court's Commercial Court list, where a winner usually recovers a portion of its costs. Which forum suits your dispute is a first-call question, and ours is free.
What if the other side simply refuses to negotiate?

Then you change their incentives. A well-drafted letter of demand with a real deadline, a filed proceeding, or a Calderbank offer that puts their costs at risk each make silence expensive. Most refusals to talk are opening positions, and they soften once the refusing party gets advice on what losing would cost. We build that pressure deliberately and keep a settlement door open the whole way. Call 1800 130 120 and we will map the sequence for your dispute on a free first call.

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marcus@mklawfirm.com.au
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