2. An overview of the mediation process
The process of mediation is one of the most common forms of Alternative Dispute Resolution, or ADR. The 'Alternative' referred to is the alternative to a trial or an arbitral hearing and the process leading up to a trial.
Some may be unaware of exactly what is meant by 'a mediation'. The following is a simple guide to a process which is a lot less harrowing and expensive than a trial.
Mediation can take place at any time but is better done when all the relevant facts are out in the open. Nobody is going to feel comfortable discussing settlement terms when they are uncertain about some important aspects of the case.
When both sides have their respective positions clear in their own minds, it is always sensible to consider mediation as a means of settling the dispute.
A cost-benefit analysis will show how mediation compares with litigation or arbitration. In my view, it is highly unlikely, that such an analysis will show litigation or arbitration to be a favourable option to that of direct negotiation or a successful mediation.
Direct negotiation can sometimes lead to a settlement of a dispute, but this only ever works when both Parties are committed to direct dialogue, with or without representation, at the same time. For direct negotiation to be successful there has to be motivation and trust on both sides and a willingness to compromise. This can be very difficult to achieve when competing interests, Party needs, and hidden agendas are all in play.
By opting for mediation, the Parties agree to meet with a readiness to try to find a mutually agreed settlement with the assistance of a skilled and experienced unconnected and independent third-party Mediator.
The Mediator is sent all the relevant papers by one or both/all of the Parties' solicitors, so that he/she can understand the background to the dispute. The Mediator sees the case summaries of the respective legal teams and might make some initial approaches to the Parties (or their lawyers, before the mediation) so as to clear up any misunderstandings, obvious queries or inconsistencies. The Mediator should take the opportunity of enquiring as to the Parties’ experience of the process, to gauge the amount of help that might be necessary to overcome any anxiety.
Before the mediation, each Party decides who will be present and who will lead the negotiations. The leader of the negotiations might be one of the Party attendees or could be a lawyer. Each team must include someone with the necessary authority to settle the dispute. The Mediator will agree how the mediation will run with all Parties in advance. All attending will know who is going to be present and that each team will have an attendee with authority to settle.
On the day of the mediation, the Parties meet at the appointed venue in their own rooms and the Mediator introduces himself. The room is a private one and available to the Party for the duration of the mediation.
At the outset of the process, it is customary for the Mediator to call the Parties together in a third room. The Mediator will emphasise that the mediation is confidential and being conducted on a without prejudice or “off the record” basis. The mediation is confidential as between the Mediator and each of the Parties and is also confidential as regards the outside world. At some point in the mediation, the Mediator might ask that the confidential views or information of one Party be divulged to the other, in order to make progress. Only with the express approval of a Party will the Mediator divulge 'confidential' information given to him by that Party to the other Parties.
The Mediator will ask the Parties to confirm their respective powers to settle the dispute. The Mediator will emphasise that all discussions with him are confidential. He will also stress that nothing that is agreed is binding on the Parties until they want it to be and not until it has been committed to in writing. Until a written agreement is signed, any offer made can be withdrawn or varied.
At the first joint meeting, the Mediator will invite opening statements from each of the Parties. These may be made by the Parties themselves or by their legal representatives.
Some discussion might continue after the opening statements, but at some point, the Mediator will break up the joint meeting and then proceed to hold private meetings (caucuses) with each Party in turn.
The Mediator uses his skills to steer the Parties towards settlement during the time allotted for the mediation. The time available for mediation might be agreed in advance or be open-ended.
At any time that a Party chooses, it can leave the mediation. The Mediator will do all in his/her power to prevent this, but this option is always available to a Party at any time in the process.
If the Parties agree a settlement (and, surprisingly, between 80% and 90% of all mediations do reach a settlement), an agreement is drawn up, usually by the legal representatives, for the Parties' signatures. The agreement may call for certain actions to be taken, such as payment of an amount from one Party to another, and invariably it should settle the dispute on a full and final basis.
The Mediator is usually paid in advance by both Parties and his fee will either be in the form of a lump sum or on an hourly rate depending on the size and complexity of the dispute.