Mediation - a good resolution
Human nature is such that we will always have disputes. Finding the best way to resolve differences is therefore very important.
Traditionally, courts are used to resolving disputes but they do not always deliver the resolution required. Cost, delay, strict rules and formality are some of the criticisms levelled against the courts. The constraints of the court process and lack of control can often leave litigants dissatisfied with the outcome. Judges themselves may question whether their judgement has properly resolved a dispute. Quicker, simpler and more cost effective ways of resolving disputes are needed and parties are increasingly turning to mediation.
Mediation has been encouraged by various initiatives. The 2004 draft EU Directive on Mediation paved the way for the use of mediation encouraging its use. In England and Wales, court rules now require parties to consider alternative dispute resolution including mediation before raising court proceedings and courts are prepared to award costs against litigants who unreasonably refuse to mediate. In Scotland changes introduced in commercial actions require pre-litigation communication between parties' lawyers and consideration of alternative means of settlement. These rules have not as yet been extended to all court actions in Scotland but that is likely.
There has been significant growth in the use of mediation in commercial, business, professional and organisational disputes. Mediation is being used to settle disputes with customers, suppliers and employees. Banks, insurance companies and other major organisations recognise the benefits of mediation.
Mediation has many advantages. It is quicker and more cost effective than litigation, and avoids publicity. Crucially it allows parties to reach a resolution which suits them. Mediation has a remarkably high success rate. In more than 75% of disputes referred to mediation, a settlement is reached very often during or shortly after mediation. With the possibility of a quick, commercially viable settlement, compared to the costs and uncertainties of court action, the growth in mediation is not surprising.
So what is mediation?
Mediation is a process by which negotiation between parties can be assisted, extended and enhanced. The mediator facilitates discussions between parties in dispute to help them find a way forward. The mediator is completely independent of the parties. He or she assists the parties to work out their own solution rather than judge and impose a decision as a Court would do.
The mediation process is private and all discussions are confidential. Attendance is voluntary and parties can leave at any time. Nothing said or done at the mediation is binding unless the parties reach a solution they all accept.
Mediation can take place at any point in a dispute either prior to proceedings beginning or at any time during court proceedings. The process is flexible with no strict format but preparation is important.
Practical arrangements must be made to appoint a mediator and fix a suitable time and venue. The mediator confirms parties are willing to attend and understand the process. It is essential that a person with authority to make a decision is present or easily contactable.
There will be an exchange of documents and information including a summary of each party’s position. This is important to help parties and the mediator understand the issues. Although preparation is important, a mediation can be fixed at very short notice.
On the day of the mediation there are usually a series of meetings and discussions. The mediator meets separately with each party and there will often be joint meetings. The discussions explore and understand the issues. Time will be taken to identify each party’s concerns, aspirations, needs, feelings and interests. Legal issues will be considered but will only be one of many factors.
Once a full understanding is reached the mediator assists parties to assess their options, test strengths and weaknesses, look at realistic outcomes, formulate proposals, and identify priorities and possible concessions. It is at this stage that the more creative, non monetary and non legal solutions can be fully examined and a commercially realistic outcome considered. Parties are free to do as they wish and are not restricted by formal court rules or even the law!
When agreement is reached or a solution identified, the mediator assists in drafting the terms of the agreement and can follow up to ensure implementation. Solicitors often accompany and assist parties and can have an important role to play.
Banks, above all else, value their staff and customers and a dispute resolved through mediation can allow these good relationships to continue.
For further information please contact: ALEX INNES