To answer these questions, we need to consider what mediation is and the benefits of using this procedure.
What is Mediation
Mediation is a flexible, voluntary and confidential form of ADR, in which a neutral third party assists parties to work towards a negotiated settlement of their dispute, with the parties retaining control of the decision on whether or not to settle and on what terms.
The mediation agreement will require the parties to treat all discussions and documents as confidential and without prejudice. This means that what is said or written cannot be used in later proceedings if the mediation does not settle.
What happens at a typical mediation?
Usually, the mediator will 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, with the aim of the parties reaching a settlement that is either documented at the mediation or shortly thereafter, usually in the form of a settlement agreement.
So what are the benefits of mediation?
- Communication problems between the parties can be overcome. The mediator 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 parties have complete choice over the selection of the mediator. 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 result can be new business opportunities and restructuring of old relationships.
- 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.
- 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.
- 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%.
- Even if a mediation does not result in settlement, the parties are likely to have benefited from the process by:
- having the opportunity to listen to each other's points of view and perspectives;
- narrowing the issues in dispute; and
- testing with the mediator the strengths and weaknesses of the case, and the strategies adopted or considered, in the run up to trial.
In my opinion, mediation still has a valuable place in the litigation process. The benefits often outweigh the disadvantages in terms of expense and more commercially sensible resolutions can be achieved which could not be ordered by the court. Even if the mediation is ultimately unsuccessful, the process allows a party to better understand the other’s case and gives it the opportunity to “road test” its own claim.
Should you wish to learn more about the process please contact Laura Sutton or Nigel Davidson who is a CEDR accredited mediator.