Mediation is not a cop-out. Far from being a poor alternative to litigation, mediation is an invaluable tool for litigators. It also allows people and organisations to control the outcome of their disputes.
On the rare occasion that someone requires a precedent for an important legal principle, going to court is essential. For almost all other disputes, mediation offers an excellent alternative to the court process for the following reasons:
Mediation works
The prospects of reaching an agreement are good. A recent study shows that 86% of mediations end in a settlement (75% on the day of the mediation and 11% shortly afterwards).
For those matters that do not settle, both parties can gain a better understanding of the interests underlying their legal positions: for their own case and that of the other side. Mediation can also help to narrow the issues before proceeding to a court hearing and so reduce costs.
Time and cost
Taking a dispute to court is often expensive and time-consuming. Legal costs quickly mount as the date of a court hearing approaches. Time better spent on business or family life is taken up by preparing for a hearing that takes place weeks or months after the first shot is fired.
Unfortunately, winning does not guarantee that the court will award the winner all of their legal costs. Partial recovery of costs can mean that the winner walks away with little to show for their efforts. In these situations, clients sometimes feel that the process has benefited ‘the lawyers’ rather than providing a commercial outcome. That perception, unjustified though it may be, is not conducive to developing a good client-lawyer relationship.
Mediation is less expensive than concluding a dispute at court and can be organised to take place in a matter of days, rather than months. Mediation also provides parties with their ‘day at court’.
Preserving business relationships
Disputes are a normal part of any business relationship. But when a profitable arrangement suffers a severe setback, it can result in damage to a working relationship, loss of potentially lucrative future deals, and reputational damage.
A protracted legal process that ends with a judge proclaiming one of the parties a winner, and the other a loser, will do nothing to preserve a business relationship. The court will quite correctly concern itself with past events and how the law applies to them. It cannot concern itself with safeguarding good relations for the future.
Mediation allows people, as individuals or representatives of an organisation, to craft a binding agreement that takes account of what is commercially important to them. Lawyers can assist their clients with the legal context of their dispute and any future business arrangements. The mediator is a neutral and objective party who can help with the change in perspective that is required for people to overcome any deadlock from previous attempts to negotiate.
Confidentiality
Many disputes involve commercially sensitive or private details that parties do not wish to air in a public forum.
Everything that happens during a mediation is confidential and without prejudice. What each party shares to help reach an agreement cannot be used against them, in the unlikely event that their dispute does not settle and proceeds to a court hearing.
The confidentiality provisions mean that those in attendance, including the mediator, cannot discuss the information shared during the mediation outside of the confines of the mediation.
The reasons above are not an exhaustive list of benefits, but they have hopefully provided a useful overview. If you want to find out more about how mediation can help you to resolve your dispute, give me a call!
Ultimately Mediation should be timed to the Client’s request. Some people have no issue with delay, while others become urgently distressed at the prospect of waiting around and/or losing money as a consequence. Once the Mediator is instructed via whatever route- action needs to be as immediate as he/she can facilitate it.
In the Client’s best interests; if the delay is going to be because of the Mediator’s full diary, alternative referral should be a real alternative offered at the outset.
Hi, Ian.
Thank you for your comment. Yes, I agree that a client ultimately decides when the time is right to mediate. However, I think that legal representatives should have an ADR (Alternate Dispute Resolution) strategy which they use to advise the client. The ‘best time’ to mediate will be a combination of legal, commercial and personal considerations.
I also agree that mediation should take place as quickly as possible once a decision has been made to mediate.