What is Mediation?
Mediation is any process (be it a negotiation, debate, litigation, dispute) which uses a ‘mediator’ (literally someone who “stands in the middle”) to help bring the parties together. The parties can speak confidentially to the mediator. A mediator will not pass on to the other side anything a party wishes to keep confidential. The mediator’s role is to bring the parties to a settlement, whilst always remaining impartial and unbiased.
When should I Mediate?
Mediation can be a useful way to start negotiations, or re-start failed negotiations, or finally settle a legal or other dispute or disagreement. The types of matters that can be mediated is endless but includes: contract negotiations, commercial disputes, debt-related disputes, insolvency, shareholder, partner disputes, and family marital and neighbourhood disputes.
The parties have ownership and control of their dispute, the costs of the dispute, and the timing of any resolution.
The parties don’t give up control of their dispute to the Courts / Lawyers, who often have their own timetables and motivations.
Some Courts and many Arbitrators have a tendency to “split the baby” when resolving complicated disputes - especially involving new technology which may be hard to understand. That can lead to unfair and inappropriate resolutions.
The process is voluntary - you don’t have to agree at the end of the process.
Mediation can create genuine understanding of the issues between parties.
Because all negotiations during the mediation process are legally privileged your position in any subsequent legal proceedings will not be compromised.
Mediation offers flexible solutions, sometime not available to Courts, and certainty of outcome.
Mediation is faster and more cost-effective than expensive and risky litigation.
In a mediation the costs are fixed and known to the parties up-front. With a Court resolution neither party can tell what the costs will be until the final costs order - often months after a trial has ended. If you lose you generally have to pay the winning party's costs.
Some Courts will require the parties to have a mediation before they will allow a trial.
Finally, it’s confidential / private, so (unlike a Court trial) there won’t be any publicity.
What are the perceived barriers to Mediation?
“Mediating looks like weakness”. Mediation does not preclude other forms of dispute resolution. So parties sometimes litigate to “show they are serious” and negotiate through mediation to get a more secure, practical and speedy result. Further, agreeing to have a mediation does not stop one or other of the parties (or both) from “sticking to their principles”. The exercise can still find common-ground leading to some form of settlement. This can, for instance, reduce the limits of legal claims and counterclaims while leaving certain issues to be resolved by a court, saving both parties time, money and reducing risks.
Sometimes the litigation has gone on too long and too much money has been spent already on lawyers fees, so that cost apportionment cannot be agreed. In most cases that’s one of the strongest reasons to mediate as soon possible - the alternative is giving the entire decision on cost-apportionment to a third party, the Court or Arbitrator.
“I’ll give away too much information”. Yes - Mediation does involve educating the other side about your case or your position but it is the parties who control what information is disclosed to the other side, and when. Some fear that giving information to the other side, might weaken their bargaining position or their legal position in subsequent legal proceedings. But if there are ongoing legal proceedings, then the facts will come out sooner or later. If you have a great case it’s best to let the other side know that as soon as possible. If you have a weak case it’s better for you to acknowledge that yourself sooner rather than later. An increased understanding of the other side’s case makes settlement more, not less, possible. And remember: what happens in the mediation, and any subsequent settlement, is confidential.
Mediation will rob me of my “day in court”. A pre-trial mediation that leads to a settlement does mean that parties might not feel emotionally satisfied by the result. But the mediation process does allow the parties to present their cases to a neutral third party, and the mediation process may be one of the first times that the parties have met since the dispute began. This alone can be very powerful for the parties and a mediation gives them an opportunity to express particular feelings and/or highlight aspects of particular significance to them, that would not be possible in a formal court setting. A simple “I’m sorry” can go a long way.
“If we are litigating then Mediation is just wasting time.” Even if the mediation does not lead to an immediate settlement it is often a powerful precursor to the resumption of negotiations and ultimate settlement. And if all else fails the work done in preparing for a mediation will always be useful in preparing for a subsequent trial.
What does the Mediation process look like?
Mediation can take many forms, depending principally on what the parties want. They can be face-to-face, via Skype/FaceTime / Zoom or videoconference. Mediation can also be conducted via telephone. Commercial mediations will normally be completed within one session, which may last from a few hours to a whole day, possibly going into the evening. Usually the mediator will control the process.
If the parties decide on a face-to-face mediation, the parties will sometimes start in separate rooms, where the mediator will listen to each party state its position. The mediator may then move between the two rooms to establish the facts and then try to move the parties to where each understands the other’s position.
Once understanding has been reached, the mediator will then work with the parties to address points of conflict and try to move towards a settlement. This may entail physically bringing them together into the same room - if that’s what the parties want.
Skype or Telephone Mediation?
In the case of telephone or Skype mediation, the calls will usually be held with each party separately, then all brought together at the appropriate time.
Settlement or Agreement
Once a settlement has been reached, an agreement may be drawn up to be signed by both parties. Depending on the nature of the dispute, the agreement may be the final document, or, in a more complex matter, may be the top-level agreement and the steps to be undertaken to complete the final agreement.
A written agreement made at the end of a mediation and signed by both parties is legally binding.