With the prospect of court closures remaining an ever-real possibility now that Bo-Jo and His team of Advisers have imposed the ‘Rule of 6’ for public gatherings – disputing parties in Commerce, Contract, and Landlord and Tenant matters – must now seriously consider alternatives to dispute resolution.

Given how the legal calendar and landscape lies -this course of action would seem to be the most common-sense and expedient way to resolve all but the most unsuitable and complex of cases. As a litigator I can honestly say that the days of ‘having-your-day-in court’ (excuse the pun guys!) have long gone… the judiciary now expect disputing parties to make serious attempts at engaging in alternative dispute resolution before they even file applications or claims to the Tribunals or Courts. Increasingly judges have no qualms issuing adverse costs orders against parties who do not at least attempt to negotiate, mediate, or arbitrate where possible. And in many cases, one cannot even issue proceedings or commence a claim without a certificate from a qualified mediator or dispute resolution body.

So! What does all this ADR mean and how does it work? In this our first in a three-part series we shall explore alternative ways of settling a dispute and saving yourself some serious cash. Let’s see…

Overview – what is mediation?

The majority of commercial, contractual; as well as property and private client disputes are not resolved at trial but by the parties reaching a settlement outside of the court process. Mediation is just one form of dispute resolution which is based on negotiations between the parties involved with an independent umpire to manage the process to completion. Mediation is a structured an interactive process where an impartial third party assists the disputing parties, with the aim of reaching a mutually beneficial settlement agreement – through a series of specialised discussion and negotiation techniques.

Mediation can take place at any time during court proceedings or the dispute resolution process.

Why choose mediation?

One of the top reasons for mediating is that the parties can often achieve out-of-the-box solutions which they otherwise would not get via the adversarial system our courts operate.  One would be surprised how many times an acknowledgement of a perceived wrong and an apology given during mediation has completely de-escalated a hot and potentially violent dispute!

Another reason is that settlement is strongly encouraged by courts. Proceed without mediating at your peril! Furthermore, the litigation procedure is expensive, timely and hostile. Mediation is usually cheaper and quicker in comparison to litigation. It is a confidential process, which can be really appealing to both individuals and corporate bodies involved in such disputes.

One of the biggest selling points of the mediation process is its flexibility. Parties can tailor specific negotiation procedures and timetables that are most appropriate and suitable for them and their dispute. The parties are also able to choose their own mediator, if they are able to agree on it. The outcomes are not driven by the adversarial approach taken by the courts and the solutions really can involve out of the box thinking. Which is absolutely brilliant in our experience as litigators.

Mediation is extremely useful in preserving commercial/business relationships. As mentioned, the litigation process is very hostile and explosive whereas mediation encourages communication, empathy and teamwork between all those involved.

The focus of this whole process is on what is in the overall best interests of the parties rather than solely on their legal rights e.g. a disputing party may have serious ill health and need to wrap up the dispute sooner rather later; in this case time is the true cost to that party and it is in their best interest to mediate instead of litigate.

Litigation is usually seen as a ‘winner-loser’ procedure, where the winner takes it all and the loser has to fall – that’s for all of you ABBA lovers! On the other hand, in a mediation there is a strong emphasis on trying to reach a realistic, commercially viable solution, which is also mutually beneficial for all parties involved.

It is important to remember that parties should consider different forms of alternative dispute resolution before issuing proceedings and a court will very likely penalise you if you don’t! we shall explore other forms of dispute resolution in our forthcoming series…

Procedure – how does mediation work?

Mediation is a flexible process so the parties can opt for a different approach but there are usually four main stages – the opening phase, exploration phase, negotiation phase and the settlement phase.

In the opening phase– each party presents their position and their side of the story during a joint session. This is a good opportunity to hear the other side’s perspective and possibly to learn new information. It gives each party the chance to explain, highlight and address their key issues and areas of concern.

Next, during the exploration phase, the mediator will usually hold private meetings with each side. These meetings are confidential and allows the mediator to understand each position more clearly and make suggestions accordingly. The point of this phase is for the mediator to learn more about the issues at hand and to regain the trust between parties in the build-up to reaching a settlement.

As you may have guessed, the negotiation phase is all about negotiating. This is where the back and forth ‘shuttle diplomacy’ kicks off and offers/counteroffers may be put forward.

Lastly, we have the settlement phase. The mediation process is non-determinative, which means that the solution reached at the end will not be binding upon the parties. This means that once an agreement is reached, it must be put into writing and signed as a contract so that both parties are held to it.

What happens if a settlement is not reached?

Mediations can fail for several reasons such as: ineffective preparation, unwillingness to reveal information or interests, unrealistic expectations or an ingenuine attitude to settling.

If no agreement is reached, this does not necessarily mean that the mediation has been fruitless – the parties may now have a better understanding of what they want and where the other party stands on the issue

Parties may be willing to try another form of ADR, possibly a determinative form that they will be bound to or may move on to litigation.

Cons – why not to choose mediation?

Mediation may not be suitable for you – although it is suitable for most cases. Mediation may not be appropriate if you require certain remedies that only a court may grant, such as an injunction. This is not a binding procedure; the parties are able to walk from the mediation away at any time and if a settlement is reached this must be recorded and signed in writing in order to be enforceable.

Although mediation is cheaper in comparison to litigation, mediators can still be expensive, and the costs may be wasted if the mediation is unsuccessful. This process requires good faith and a genuine and bona fide attitude to settlement, if one of the parties is not genuinely interested in settling, then there is a big chance the whole procedure will fail. But as they say, ‘it ain’t over until the fat lady sings’…

By Joy Douglas & Yasma Qirreh– Hillary Cooper Law