Mediation: What is it and what are the benefits?

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23 September, 2021

Stephen McArdle
Partner, Head of Department

What is mediation?

Mediation is a highly effective form of Alternative Dispute Resolution (ADR) during which parties involved in litigation or other disputes can negotiate with each other with the assistance of an independent mediator.

The aim of a mediation is to reach a binding legal settlement that brings the Court proceedings or legal dispute to an end.

Who can mediate?

Any party involved in a dispute or court proceedings can embark on mediation; including individuals, businesses, companies, charities and trusts, shareholders and directors.

Who conducts the mediation?

The parties are usually legally represented by their solicitor who will speak on their behalf in the main. However, those attending are able to speak freely with the mediator as well as the opposing side if appropriate.

The unique feature of a mediation is the joint appointment of an independent mediator whose role is to assist the parties to negotiate and to facilitate discussion to narrow the issues and ultimately drive the parties to reach a compromise and settlement. The mediator will try to encourage the parties to focus on settlement and the commercial realities of their case as well as the benefits of bringing the dispute or litigation to an end. The mediator is independent, confidential and does not act like a judge - they cannot impose a decision or settlement of the parties.

During the mediation, the mediator will meet privately with the parties to discuss the issues in dispute and possible settlement. The parties may also wish to meet 1 on 1 to discuss the matter, ask questions and attempt to minimise any issues in dispute. The parties then usually put forward offers of settlement with the aim of agreeing on a resolution to the dispute. Alternatively, the parties may use the discussions at the mediation as a springboard for further settlement talks after the mediation.

How does it work?

Mediation is a voluntary process and both parties must agree to embark upon it before it takes place. This usually starts with one party offering to mediate to the other party. It is important to note that a Court cannot order parties to attend a mediation, but it is expected that litigants try to negotiate to avoid court proceedings where appropriate and there can be costs sanctions against a party who unreasonably refuses to mediate.

Mediation is highly flexible and can take place at any stage of a dispute - be that before Court proceedings are commenced or close to the trial. The entire process is confidential and 'without prejudice'. Prior to the mediation, the parties are required to sign a 'mediation agreement' which confirms that anything said during the mediation is confidential between those in attendance and all negotiations are 'without prejudice'. This means that anything said or offered during the mediation cannot be used in later court proceedings, if settlement is not reached. The mediation agreement also states that the mediator cannot be called as a witness in the Court proceedings.

However, if the mediation is successful, then a binding settlement agreement will be drafted and signed.

The mediation will normally take place at an agreed neutral venue where the opposing parties have their own rooms to privately discuss how they intend to negotiate as well as discuss legal options with their solicitors. This also enables the parties to feel comfortable and relaxed so that they may focus on settlement; a mediation is not intended to be an intimidating environment like a Courtroom.

There can be a joint-sessions and meetings with all parties in attendance at the start of and/or throughout the day, depending on how the negotiations progress. However, there is no set format and if the parties prefer not to meet face to face, then this can be accommodated. Similarly, the mediation can be ended by either party at any stage of the day.

How successful is mediation?

Mediation does not guarantee the settlement of a dispute, but it generally has a high success rate. Mediators who responded to the ninth mediation audit carried out by the Centre for Effective Dispute Resolution (CEDR) cited an overall success rate of 93% in 2020; 72% of their cases settling on the day, with a further 21% settling shortly thereafter. CEDR_Audit-2021-lr.pdf

What are the benefits?

Some of the potential benefits of mediation are:-

  • The cost of mediation is much cheaper than proceeding with the dispute through the courts.
  • Mediation can provide a quicker resolution to a dispute, particularly in comparison to the length of time it takes to reach Trial.
  • Business relationships can be preserved or enhanced by mediation as opposed to adversarial court proceedings which can damage relationships.
  • Mediation can also facilitate and encompass settlements and outcomes which a Court cannot. The parties can incorporate other aspects of their business relationship and other assets which are not strictly part of any ongoing court proceedings, thereby leading to a much broader settlement outcome. The limited scope of legal remedies at Court can mean that even for the 'winning' party, the outcome may not be commercially advantageous.
  • The parties have an active participation in the mediation process and control the outcome.
  • The mediation process is low-risk; there is "nothing to lose" by attempting a mediation.
  • Mediation can provide the parties with an understanding of the other party's position and help minimise the issues in dispute.
  • The mediator can help the parties work through a deadlock situation that can be created by competitive or positional negotiation.
  • Even if a mediation does not result in settlement, the parties are likely to have benefited from the process in some way and issues will be narrowed.

Forbes Solicitors' commercial litigation team are experienced in negotiating settlements and representing clients at mediation.

For more information contact Stephen McArdle in our Commercial Litigation department via email or phone on 0333 207 1142. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Commercial Litigation department here

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