FAR fewer businesses in York and North Yorkshire are resorting to court action to settle their differences - but in East Yorkshire the number of corporate court battles is growing.

More disputes between companies, suppliers and customers are being settled by sweet reason and mediation in York and North Yorkshire.

But at Scarborough County Court, which serves East Yorkshire, there is no court associated mediation scheme.

Solicitors say the result is that between 2003 and 2004 litigations in the area rose by 15 per cent, to 1,517.

The four years to 2004 saw a significant 18 per cent drop in county court claims nationally, including, at York County Court, a ten per cent fall between 2003 and 2004, according to Her Majesty's Courts Service.

Instead, businesses are finding different ways to settle disputes, including through court-associated mediation schemes, said Johanne Spittle, head of commercial litigation at York-based commercial lawyers, Denison Till.

In mediation, which is increasingly suggested or stipulated by the courts, an independent, neutral third party helps those involved reach a settlement rather than imposing a judgment on them as with court proceedings.

A new survey on behalf of The Association Of Northern Mediators (ANM), says that of 600 mediated cases monitored during the last four years, 77 per cent were settled on the same day or immediately after. Of these, 77 per cent were entered into voluntarily, with 21 per cent instructed to seek mediation by the courts.

Mr Spittle, who has promoted mediation since joining Denison Till 15 years ago, said: "We are told that we live in a more adversarial world with people more willing to sue but the figures show differently.

"This trend is not because of an outbreak of goodwill, but is good commercial sense.

"Legal proceedings are costly, time-consuming for key staff and relatively trivial issues can end valuable, hard-to-replace commercial relationships in an increasingly fragmented, niche-market economy.

"In some cases mediation can strengthen relationships through overcoming obstacles and, where appropriate, I recommend it to clients.

"While this may be at odds with some people's perception of corporate lawyers, it is part of our role as broader commercial advisers. It is often better business to mediate than to sue and creates a happier client."

The ANM statistics show mediation is particularly effective in settling disputes between companies, suppliers and customers over quality of goods or services and in property and construction conflicts.

The Law Society will advise solicitors later this year that they should encourage alternative means of dispute resolution. A national mediation week is also planned.

The trend away from litigation is good news for tax payers, who fund the court service, and enables the courts to reach their speed and efficiency targets.

Updated: 11:01 Thursday, April 14, 2005