Mediation makes use of a neutral third party to find an agreement between parties, utilising their expertise. The mediator importantly does not form a decision on the case, they are there simply to facilitate an agreement. However, that is not to say that a mediator will not look at the facts of a case as they may be called to evaluate the strengths and weaknesses of a particular matter.
What is a mediation agreement?
It can be beneficial for parties to sign a mediation agreement prior to commencing this form of ADR, as it will set out the parameters of the mediation itself such as confidentiality.
Usually the mediation agreement will require the parties to treat discussions and documents as confidential and without prejudice. The benefit of a confidential mediation is that both parties avoid issues raised during the proceedings being made public.
Who needs to attend the mediation?
It is common practice for both parties to attend the mediation with their legal representation and importantly an agreed mediator.
However, other advisers may attend with you such as accountants if you both agree. This may be helpful if there is a particular which needs to be explored which your adviser has expertise.
During the mediation parties will meet with the mediator in private to confidentially discuss the matter, therefore not disclosing their potential weaknesses to the other parties.
This gives the mediator a unique perspective on the matter and allows them to propose realistic resolutions to the case.
Who decides on the mediator?
In the first instance parties can agree between them to appoint a mediator. However, if this is not possible then a third party can select a suitable mediator on behalf of the parties who wish to mediate.
The parties are generally free to appoint whomever the please as the mediator as long as they agree. Mediators tend to be lawyers or individuals with technical expertise in a given sector.
How long will mediation last?
A single mediation session lasts up to 2 hours. However, dependent upon the complexity of your matter and how close to resolve the parties are, one mediation session may not be enough.
Whilst some matters may be resolved within one session most are dealt with a number of sessions.
When is the best time to mediate?
In compliance with the overriding objective on dealing with cases justly and at a proportionate cost (CPR 1.1) it would be prudent for parties to mediate early to maximise costs and time savings. However, there is no purpose attempting to mediate if the parties do not fully understand the issues or have not exchanged information relating to the matter.
Therefore, to mediate effectively parties should wait until their respective issues have been properly defined and have exchanged documents which relate the the dispute and quantum of the matter.
Other factors you may wish to consider:
- Whether there is a statute of limitation problem.
- Whether there is a mediation clause in a contract between the parties
- If there may be a possible enforcement issue then mediation after the proceedings have been issued would allow for the settlement to be enforced more easily via consent order
What are the advantages and disadvantages of mediation?
- Time – Whilst pursuing litigation can take months or years, mediation can be undertaken within a few days. This can pose a significant saving of time for your case.
- Costs – Similarly, due to the time savings, most matters can be resolved efficiently saving both sides significant costs.
- Control – With ADR the parties have control over how they proceed with their matter, as they can decide which form best suits their interests. For example, whether or not they want the decision to be legally binding.
- Confidentiality – Mediation is usually conducted confidentially, which enables full and frank negotiations.
- Business Relationships – Pursuing ADR as a form of reaching a settlement increases the likelihood of maintaining relationships, as settlements are reached with consent of both parties.
- Requirement – Parties in contentious disputes are required by the Courts to attempt ADR and may make adverse costs orders against parties which refuse.
- Costs– the double edged sword. Whilst mediation is seen as a method to save costs, if unsuccessful it will add time and costs to the dispute.
- Strategy – the risk with mediation is that you expose your litigation strategy by inadvertently releasing information to the other side.
- Voluntary nature – As mediation is a non-binding form of ADR uncooperative parties may use it as an opportunity to build legal costs and not act in good faith.
- Disclosure – mediators do not have the ability to order or require parties to disclose documents which may be essential to an effective mediation.
Is it legally binding?
Unlike other forms of ADR, mediation is non-binding, both parties retain control as to whether they agree to settle or not. This may be of benefit if the parties want to maintain commercial relationships.
However, that is not to say that mediation cannot be legally binding. Most mediation agreements stipulate that if a settlement is reached it will be binding on the parties as a contract once it is in writing and signed.
How can we help you?
Our specialist lawyers have a proven record of successfully using various forms of alternative dispute resolution such as mediation, in order to successfully resolve disputes in a cost-effective manner for our clients.
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