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What is mediation?

What is mediation?, image of a gavel and scales | Crunch

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    If the court process of litigation can be characterised as lengthy, formal and expensive, mediation is everything that the court process isn’t. Mediation is quicker, more flexible, and costs less than going to court. 

    It is classed as an alternative way to resolve disputes and it involves a third party (the mediator) who is completely independent from the parties in dispute assisting the parties to work towards an agreed settlement of the dispute. 

    A face-to-face mediation normally starts with the parties and their legal representatives being present in the same room together and holding a joint first session that is chaired by the mediator. 

    After a brief introduction from the mediator, each party is allowed to make an opening statement to the other side that sets out their position and view of the dispute. It is sometimes the case that the party’s legal representatives assist with giving this opening statement. The parties will have provided mediation position statements to the mediator in advance of the mediation. This allows the mediator to understand the parties position before the start of the mediation. 

    At the end of the first joint session, the parties will leave the main room and retire to their own private rooms with their legal representatives. 

    The mediator will then shuttle back and forth between the parties in their respective rooms. The mediator will take their time in speaking with the parties privately and then take any offer to the other side. 

    The parties are allowed to call for another joint session as the mediation progresses. 

    As mediation is more flexible than the court process of litigation, the parties have more control over what the settlement looks like. The parties are able to be more creative in terms of resolving their disputes and are able to agree on solutions that they would otherwise not be able to have, had they decided to litigate. 

    The mediator often has experience of the particular industry or sector that the parties in dispute are from. This is different from a judge who may not necessarily have the sector or industry specific experience to the parties in dispute. 

    The mediator will focus on achieving a commercial settlement by facilitating an agreement between the parties. The mediator won’t decide the mediation on the legal merits of the case. 

    The mediation itself will be confidential between the parties and the mediator and it will be undertaken on a Without Prejudice basis which is not on the court record. This allows the parties to be freer in their negotiations and should promote settlement.

    Who should attend a mediation?

    A company’s decision-makers and those with the authority to bind the company to an agreement should be those that attend on behalf of a company. In addition, the company will have their legal representatives present at the mediation as well. 

    In the case of an SME, if the decision maker and the person with the authority to bind the company are the same person, that person should attend along with a commercial manager for support. 

    The role of the legal representatives should be limited in the mediation. The role should be as a sounding board for any decisions made by the company. This is to enable the parties to deal with the dispute directly and to avoid the mediation from turning into a mini-trial where the merits of the case, and not a commercial settlement, are discussed.

    Face-to-face or online

    With the threat of the global Covid-19 pandemic still looming and the restrictions that have been imposed, mediation has gone from a face-to-face mediation to remote mediations that are held online. The effectiveness of the mediation has remained and the parties are still able to conduct an effective mediation remotely through the use of private and public rooms. Remote mediation is also viable when the dispute involves parties who may be in different locations around the world.

    Is mediation right for you?

    Mediation is a viable option for any party that is in dispute. Mediation lends itself very well to a wide variety of disputes from commercial disputes, property disputes all the way to family disputes.

    The court should be the last resort in circumstances where the parties are unable to reach any form of agreement and they require a judge to do this for them. The court rules also encourage the parties to mediate before proceeding to a full trial of their dispute. As this is the case, mediation is right for a wide range of companies and disputes.

    When to mediate

    The question of when best to mediate will depend on the circumstances of the dispute. Generally speaking, it is best to try and mediate as early as possible in order to avoid the escalation of legal fees.

    The court rules and the litigation process does allow for the litigation process to be temporarily paused for a period of time in order to allow the parties to mediate. This occurs once the parties have issued their court documentation at the start of the litigation process and happens before the parties are required to list and submit all of their documents in the disclosure process.

    What happens after a mediation?

    In the event that the parties are unable to reach a settlement at the mediation itself, the parties are free to carry on negotiating on a without prejudice basis for a certain period of time which may be sent at the end of the mediation. This could be two weeks from the end of the mediation as an example.

    The benefit of the mediation having taken place is that the parties will have a better understanding of the other side’s position and it is likely that the issues will have been narrowed down by the mediation to facilitate more targeted negotiations between the parties.

    The parties are also able to organise a further mediation at a later date and as the court process proceeds.

    Where can you find help?

    Most law firms are able to assist parties in settling their disputes via mediation. Our legal partner LawBite is here to help. They offer Crunch clients free legal consultations to help businesses identify exactly what they need to do when facing a business legal dispute. You can book your consultation via our Legal support webpage, or speak to your client managers.

    About the author

    The author of this article is Andrew Farrugia.

    Andrew is a dispute resolution consultant solicitor at LawBite with experience in commercial and property-based mediations in an array of different sectors such as property, hospitality, insurance, shipping, travel, sports and media. Andrew is qualified in England and Wales and has the experience of working in a small firm, large national firm and in highly rated West End boutique firm.