What is ‘Mediation’?
Mediation is a voluntary and confidential form of alternative dispute resolution (ADR), in which a neutral third party assists parties to work towards a negotiated settlement of their dispute. The parties retain control of the decision on whether or not to settle and on what terms.
In mediation, both parties agree on the choice of a neutral mediator. The mediator’s role is to facilitate the discussions between the parties themselves, exploring options and taking account of individually important factors. This allows the parties to craft arrangements that are right for them whereas a court can only make a narrow range of orders which it imposes but which neither party might choose. By definition, mediation is constructive. The mediator cannot advise but is there to help.
Mediation can be used in almost any kind of case, from small claims through to complex high value multi-track disputes and appeals. Parties to litigation must consider any offers to mediate or attend settlement discussions very seriously and be able to justify reasons for refusing such offers to avoid cost sanctions.
What happened at a typical Mediation?
The mediator will greet the parties on arrival and show each party to its own private room. Usually, the mediator will formally open the mediation with a joint session, attended by all parties and their lawyers. During this session, the mediator provides an overview of the process, their role and the procedure. Each party then has an opportunity to make an opening statement, giving its perspective on the dispute and highlighting points of particular concern. After the opening, the mediator will have private discussions with each party to assist in the negotiating process.
Ultimately, this may result in the parties reaching a settlement that is either documented at the mediation or shortly thereafter, usually in the form of a settlement agreement. Mediation does not always result in a settlement but it generally has a high success rate.
What are the benefits of Mediation?
Some of the potential benefits of mediation include:
- Communication problems between the parties can be overcome. The mediator is a neutral third party who can act as an intermediary between the different personalities and negotiating styles of the parties.
- The mediator can help the parties work through a deadlock situation that can be created by competitive or positional negotiation.
- Business relationships can be preserved or enhanced by mediation. Long-term relationships, arrangements in small or sensitive markets, joint ventures and similar relationships can be restored.
- Confidentiality and privilege are cornerstones of the mediation process. Agreements to mediate usually provide specific protection for confidentiality and privilege. The private nature of mediation also ensures that negative or embarrassing precedents are avoided.
- The parties have complete choice over the selection of the mediator and can therefore choose the mediator who is most appropriate for the dispute. Conversely, the parties cannot choose a judge if the matter goes to full trial.
- The legal costs, lost opportunity costs and management time can be reduced through mediation.
- Mediation can produce outcomes that might not be possible via determination by the court or arbitration. The limited scope of legal remedies in court or arbitration may be inappropriate to resolve the wide range of business or commercial issues that might arise (for example, the need for new financing). The result can be new business opportunities and restructuring of old relationships.
- The client’s personal, commercial and technical needs, interests, aims and objectives can be achieved through mediation. The process helps the client to identify underlying interests and the implications that various alternative outcomes may have on those interests.
- The process is entirely flexible and can be tailored to meet the parties’ needs and all issues.
- The clients have active participation in the mediation process and control the outcome.
- Mediation is voluntary. The parties can withdraw from, or terminate, the mediation at any time. The mediator has no coercive powers.
- The process is culturally sensitive and adaptable. A team of mediators can be employed, representing the diverse cultural backgrounds, in multi-party cases. A bilingual mediator can establish credibility and authority in a case involving language obstacles.
- The mediation process provides a tool for project managing large, complex or multi-party disputes.
- Mediation can provide a speedier resolution. It can be arranged quickly, often within a few days or weeks.
- A mediation can take from a few hours to one or more days. Mediations rarely take more than a few days, even in relation to complex or multi-party commercial disputes.
- The mediation process is low-risk; there is “nothing to lose” by attempting a mediation.
- Mediation has a high success rate and produces durable results. The statistics vary, but range from 65% to 85%, representing cases that settle at mediation, and some mediators advertise success rates in excess of 90%. The outcome is likely to be more palatable to clients than any solution that a court or arbitration tribunal imposes, as the clients themselves have responsibility for creating it.
Our firm are committed to using mediation whenever possible, to avoid the need for costly litigation. Our dispute resolution lawyers are all experienced in organising and conducting a mediation.
This guide is for general information only and does not constitute legal advice. If you would like to discuss anything in this article please get in touch.