Mediation is a voluntary, non-binding, private dispute resolution process.
Mediation provides a means by which parties may seek to resolve a dispute by utilizing an independent third party to facilitate agreement.
It differs from both litigation and arbitration in that the mediator is not appointed to make a judgement but to assist the parties in reaching a settlement to the dispute that is satisfactory to both/all.
To be successful, the parties to the dispute must firstly agree to mediate and then participate in the process.
The key factors of:
- Privacy – as nothing declared within the mediation may be disclosed by the mediator to the other party without consent or by any party to the outside world, and
- Non-binding nature of the process – by which nothing is agreed unless and until documented in the Settlement Agreement
provide the parties with the freedom to explore opportunities to resolve the dispute without risk. Parties may disclose information, express views and suggest both concessions and potential settlement frameworks to the mediator safe in the knowledge that this will not be declared to the other party unless express consent is given.
Where the doctrine of “without prejudice” (common law jurisdiction) applies, this principle will also apply to the mediation process. This means that if settlement is not reached and the matter is taken to litigation then the parties will not be precluded from arguing a different position in court from that taken during the mediation process.
Mediation offers further benefits to the parties:
- The process is generally both quicker and cheaper than going to court
- It enables relationships between the parties to be maintained, and
- It facilitates settlement based on the needs of the parties rather than their legal and/or contractual rights enabling solutions to be found which would not be available through the courts.
Mediation also has the added benefit of not creating any precedent.
Essentially, the mediation process empowers the parties to a dispute. Unlike litigation (or arbitration) the outcome will not be imposed but agreed by the parties. This ownership and responsibility for settlement means that the outcome is more likely to be accepted by both parties enabling them to ‘move on’ from the dispute.
In many cases, the introduction of the mediator as a neutral third party in itself provides the necessary energy to act as a catalyst for settlement. After each party has presented their case in open forum separate, private discussions between the mediator and each party will identify opportunities for resolution which hopefully lead to an amicable settlement that can be captured in a legally binding Settlement Agreement.
Mediation is not appropriate for all disputes. For example, if the nature of the dispute relates to a point of law then mediation would not assist the resolution of the matter. Mediation can also be seen as an additional, rather than alternative, dispute resolution procedure – with associated additional costs – where a satisfactory resolution is not achieved and the matter must still be taken to court. In addition, if a party fails to follow through on their obligations set out in the Settlement Agreement then the other party will need to seek enforcement through the courts.
Mediation, as a commercial dispute resolution process, also requires the right culture and business environment to be successful.