Most Read Contributor in Australia, September 2016
Mediations held at an early stage can be difficult to settle,
despite the fact that legal costs are lower and therefore less
likely to be a road-block to settlement.
Opinions may differ as to why that is the case. Perhaps it is
because the parties do not have sufficient information to make an
informed decision? Or maybe the parties have not suffered enough
'pain', both in terms of costs and time spent, to know the
true value of a settled outcome?
Most mediators will tell you that they consistently observe that
parties do not properly prepare for the mediation. The result is
that often mediations will fail where they might have otherwise
settled or a party will end up with a worse settlement than might
otherwise have been achieved if they had done their homework
So, what should lawyers and their clients do to prepare for
mediation? The list could be very long, but here there are four key
points to consider.
Know the facts, the case and the costs: Lawyers
and their clients should learn as much as they can about the matter
before they attend. Information may be limited for mediations that
are held at a very early stage but the matters that should be
considered are the background facts which gave rise to the dispute;
the key issues in dispute; the underlying legal issues (in
particular, the arguments that may be raised by the other side);
the commercial and financial considerations; and the personalities
of the people involved in the dispute. Work out what the legal and
commercial costs have been so far and what they are likely to be if
the matter does not settle.
Procedural matters: Parties should consider
procedural matters, such as where the mediation will be held, who
should attend (a small, efficient team of the key decision-makers
is best) and that one or more attendees have full authority to
settle. If authority is limited, then that should be made known to
the mediator well before the mediation day. Consider what documents
the mediator should read to understand the key issues in dispute.
It is also important to prepare a draft settlement agreement or any
other documents that may need to be signed on the day to resolve
Prepare to negotiate: The mediation will
inevitably involve each party being asked to compromise on their
starting position. Parties should therefore prepare themselves for
negotiation. The people who will attend the mediation should
discuss matters such as who will give the opening statement and
what each person will (or will not) say. Many clients will want to
say something and they will be encouraged by the mediator do so. In
that case, lawyers should help their clients to prepare what they
intend to say. Each party should also consider the possible options
for settlement, including the settlement sums and terms of payment
that might be discussed.
Parties may be aided by making a list of the outcomes they would
ideally achieve and then rank each of the items on the list
according to their importance. You should also prepare a list of
the outcomes that you think the other side may wish to achieve and
consider whether any of those items can be conceded, hopefully in
exchange for something that your client may want. You should help
your client to consider their 'bottom line' – at what
point will they walk away from the mediation without a settlement?
Consider the questions of 'what might happen if we do not
settle' and 'what might be the cost of not settling'?
Help your client by testing their assumptions and wishes, because
you can be sure that the mediator will do so.
Pre-mediation contact with the mediator: Each
party should take time to contact the mediator before the mediation
day and discuss the underlying commercial, legal and personal
issues involved. The mediator may have obtained permission to tell
you something about the other side's motivations and underlying
key issues and this information may help your team to prepare to
negotiate on those points.
By taking the time before the mediation day, each party is
likely to find that they are better prepared, more able to
negotiate and get better results from the mediation.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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