Mediation is a form of assisted negotiation where an independent third party, the mediator, attempts to assist the parties to resolve a dispute. Although many former judges are mediators, their role in mediation is very different. The mediator does not decide who is right or wrong, but attempts to help the parties to negotiate an agreement to resolve the dispute. The negotiated agreement is inevitably something less than what the parties had hoped for, but in exchange, they have certainty about the outcome and closure.
Mediation is a step taken in most commercial litigation, whether by agreement of the parties or because the Court orders the parties to enter into mediation. Mediations usually proceed in the following way:
- The parties agree to appoint a qualified, respected and acceptable mediator and agree a mutually convenient date and location;
- Sometimes a preliminary conference is held to agree on a timetable for preparation (but this is not always required);
- The parties provide the mediator with an agreed bundle of the key documents so that the mediator can understand the issues in dispute; and
- The parties exchange and provide the mediator with position papers setting out the issues in dispute, their respective positions on those issues and what outcomes are acceptable.
In approaching settlement negotiations, each party is influenced by:
- uncertainty about the outcome of the dispute or court proceedings (and how long it will take to resolve);
- their assessment about the strength and weakness of their case;
- their attitude to risk and withstanding conflict;
- their assessment of the alternatives to settlement; and
- the ongoing cost of the dispute and a Court hearing.
Successful negotiation requires finding a compromise. You need to influence the other party by persuading them to reassess their view. They must be persuaded that it is in their interests to change their position.
The litigation team at Harris Freidman Lawyers have conducted hundreds of mediations. About 80% of mediations we have been involved in are successful. In our next bulletin we will discuss how to prepare for mediation in order to make best use of the opportunity.
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.