Mediation is a type of alternative dispute resolution (ADR). ADR is a non-litigious process whereby parties come together in a genuine attempt to resolve their dispute. During mediation, an independent and neutral third party (known as a Mediator) is appointed to help conduct, manage and facilitate meaningful discourse between parties, so as to promote the possibility of a negotiated settlement. The process is confidential and only the parties taking part in the mediation process need know about it. The Mediator does not take on a judicial or arbitral role and does not have the power to make a decision that binds the parties. The Mediator’s sole purpose is to help the parties explore their options. Below, we set out the benefits of mediation and the procedure involved.

When to Engage in Mediation

In principle, parties can attempt mediation at any point during the dispute cycle, even after legal proceedings commence. The best time to mediate your dispute depends on the circumstances of your case. However, as with most processes that promote negotiated settlement – the sooner the better. The key is to have sufficient information to enable the parties to engage in practical, sensible and informed discussions.

The Benefits of Mediation

We can’t overstate the benefits of mediation. Unlike traditional litigious processes, mediation offers various benefits, including:

  • Speedy resolution of factually complex disputes;
  • Cost savings;
  • Ability to maintain confidentiality; 
  • Flexible process; and
  • Possibly relying on and considering documents and/or information parties could not rely on in court.

Appointing a Mediator

All disputing parties must consent to the mediator’s appointment and can choose an independent third party themselves, or approach an ADR and/or mediation service provider. If you decide the latter, the mediation service provider will be responsible for monitoring the Mediator’s performance and conduct and the mediation process generally.

Costs

The costs of engaging in mediation are diverse and will depend upon the following:

  • The complexity of your case;
  • Time needed to mediate the dispute;
  • Parties willingness to engage in meaningful discourse;
  • Whether a professional mediation service provider is engaged; and
  • Attending counsel fees (if counsel has been engaged to attend).

Mediation costs are generally shared equally between the parties pursuant to a mediation agreement regardless of the outcome obtained.

Formalities

Before mediation commences, it’s common practice for the disputing parties to exchange position papers and provide a copy of the same to the Mediator. A position paper is a statement which sets out the factual background of the matter, the issues in dispute, each party’s position and the outcome sought. Disputing parties can draft position papers, however, it is best to engage a legally qualified professional to draft the document.

Before mediation is commenced the parties should execute a mediation agreement. The mediation agreement is essentially a contract between the disputing parties whereby the parties agree to try and settle their dispute out of court. The agreement usually evidences the nominated place and time of the mediation, the procedural requirements, rules, constraints and or limitations (if any) and the confidentiality or otherwise of the process.

Procedure

At the commencement of the mediation, the Mediator will start by informally introducing themselves to each of the disputing parties in private. If a mediation agreement has not been executed, this will need to take place before the negotiations commence.

Once the introductions are out of the way, the Mediator will bring the parties together in a joint meeting and will establish the mediation’s ground rules. The Mediator will afford each party an opportunity to present their opening statements. During the opening statements, each party will present the key issues that they believe to make up the case.

After the opening statements have been presented, the Mediator will adjourn the joint meeting and conduct a series of private meetings with each of the parties. The purpose of the private sessions is to gauge each party’s expectations, determine the strengths and weaknesses of their care and encourage the parties to exchange offers and counteroffers in an attempt to resolve the dispute. The meetings are confidential, and the Mediator doesn’t disclose anything discussed during the caucuses to the other party/ies without your express consent.

Following the caucuses, the Mediator will bring the parties back together in a further joint meeting and will encourage open and frank discussion. At this point in time, the Mediator may request that the parties meet without their legal advisers.  

A mediation can go one of two ways. The parties may either successfully settle the dispute between them or not.

Settlement

If the parties have reached a settlement, the lawyers present will draw up a settlement agreement. A settlement agreement is a legally binding contract which details the terms upon which the parties agree to settle the dispute and ancillary matters.  

Non-settlement

Where the parties have failed to reach a settlement they are free to pursue legal action as against each other and to assert otherwise their legal rights.  

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If you would like to know more about mediation or the suitability of engaging in alternative dispute resolution processes, let our disputes lawyers know on 1300 544 755. 

Vanja Simic

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