Mediation, as means of resolving disputes is growing, as more and more parties see the value in seeking to amicably resolve issues; especially when work is limited, and companies have to think long and hard before risking their client centricity through traditional litigation. Even if it hasn’t been prescribed within a contract, parties are still looking to utilise the mediation process.
Whilst the growing popularity of alternative dispute procedures has given rise to several hybrid methodologies over and above the traditional mediation and arbitration approaches (Arb-Med being one such example) mediation continues to be popular. Indeed, its informal yet effective manner is why arguably it is often combined with the more formal dispute procedures.
A mediation process has several distinct advantages, over and above it being generally confidential and without prejudice. Confidentiality in a competitive commercial environment is clearly important as no party wants to needlessly compromise its marketplace standing in front of its clients or competitors. A without prejudice mediation (in those jurisdictions where it applies) provides parties with the comfort that any offer, admission or concession made in the course of negotiating a settlement cannot, by virtue of being considered privileged cannot be admitted as evidence in any subsequent court or arbitral proceedings.
A mediation process has several distinct advantages, over and above it being generally confidential and without prejudice.
‘It pays to talk’ is an often used sentence; the meditation process actively facilitates engagement between parties, often when direct engagement has come to an abrupt impasse. Such is the importance placed on this that mediation agreements, recognising its importance, will state that party based agreements only become binding when they have been committed to writing and have been agreed to by both parties. Parties can therefore freely engage with one another, and the mediator, to explore ways within which to arrive at a commercially viable solution.
Whilst the mediator will at all times, maintain a position of neutrality, the ultimate aim continues to be that of working with the parties to arrive at a solution. No such luxuries are, by virtue of the court’s adversarial nature, available to the parties during the course of the contested litigation. The court’s remit (when you are finally listed for a trial) is restricted to simply determining an outcome, based on the relevant statutory limitations and the persuasive nature of both parties’ representations. The court, unlike a mediation, cannot focus its energies on seeking to engage the parties to achieve a mutually beneficial and commercially viable option.
Certainty and risk reduction are also key concepts for any business, parties undertaking traditional litigation must rely on a third party decision maker’s determination (the judge) over which they possess no direct control. The mediator on the other hand, uses its skills to facilitate an environment whereby both parties are enabled to take a resolution focussed perspective.
Client focussed parties can invest a lot of time, effort and expense in establishing and maintaining its relationships. The adversarial nature of a traditional court proceeding however, gives no regard to this, and consequently any court hearing will involve a great deal of time, effort and further expense may need to be incurred when seeking to rebuild a damaged relationship. Undertaking a mediation can limit if not potentially eradicate this problem as a mediation process enables the mediator to work with both parties to come together to achieve a favourable and commercially sustainable outcome which, most importantly, both parties assume ownership over.
Mediation is increasingly being used within long term projects to unblock problems as and when they occur, as this it has been found helps to maintain positive relationships.
Parties often consider litigation as an unwanted, costly necessity, which not only results in a ‘looser’ losing in terms of outcome but also financially. Mediation costs are limited as each party bears its own costs and possibly more importantly, there are no perceived losers.
Mediation is increasingly being used within long term projects to unblock problems as and when they occur, as this it has been found helps to maintain positive relationships. Indeed judges, recognising the relative value of mediation, are now often heard to be enquiring as to whether or not parties have given consideration to mediation at the start of the more traditional court based proceedings. Admittedly, not all matters are suitable for mediation and each situation will need to be considered on its own merits. Clearly, where both parties would like to maintain an ongoing relationship, are able to ensure that the attendance of the appropriate level of decision makers and are committed to a mediation; mediation is clearly the preferable first step to try and resolve matters.
If you are currently in or have identified a potential dispute contact Faithful+Gould as we have the experience to not only assist parties but also facilitate the mediation itself.