Mediation is a form of assisted negotiations, usually confidential, in which the parties seek a resolution of their dispute, with the active assistance of an independent and neutral third party – the mediator.

Mediations can occur at any stage of a dispute. In franchising matters, the Franchising Code of Conduct prescribes a dispute resolution process by which the parties must mediate their dispute before the matter can proceed to a hearing. Other contracts may provide similar dispute resolution mechanisms that encourage mediation.

Courts also actively encourage parties to mediate their dispute during their proceedings.

The mediator does not make a determination of any issues in the dispute, does not make any recommendations or give legal advice.

Before the mediation

Prior to the mediation, the mediator will usually meet (or at least speak to) the parties separately and confidentially to gain a general understanding of the nature of the dispute and what outcome the parties hope to achieve. There is also commonly a directive that the parties exchange ‘position papers’ prior to the mediation setting out in brief their ‘submissions’ or areas of dispute.

What happens during mediation?

The mediation itself generally begins with a joint meeting between all parties and the mediator. The mediator will usually begin by outlining and reminding the parties of the reason for the mediation, the process that they have agreed on and their obligations to each other during the course of the mediation.

The mediator will then usually invite the parties to each describe what brought them to where they are now, and what they want to achieve. Frequently, a party or the mediator will then suggest that there be a break and that the parties go into separate rooms. Here the parties can discuss with the mediator how they see the mediation proceeding and explore options for settlement of their dispute (in a confidential setting).

It is not uncommon for the negotiation process to reach a point at which it is constructive to bring the parties back face-to-face. This is particularly useful if the negotiation is showing signs of stalling or, in mediations where the parties have their lawyers present, and where the mediator believes direct discussion between the parties might result in a breakthrough.

What does mediation cost?

Most mediations are concluded in a day (say 8 hours) and will include some additional preparation time. The parties usually split the cost of the mediator. There may be additional expenses in relation to legal and accounting advice, room hire, travel and catering.

Do I need to have a lawyer?

It is not a requirement, however it does help if you have had a discussion about your legal position beforehand and have access to legal advice on the day of the mediation session in case there are any points you may want to discuss with a lawyer during the mediation. Lawyers can assist with providing technical legal advice on issues at hand and can assist with ‘nutting out’ a resolution.

What are the benefits of mediation?

  • It is almost always more cost and time effective than Court proceedings;
  • It is flexible – the parties can reach a settlement that suits them. Courts are limited in the judgment they can deliver; and
  • It is usually private – unlike Court proceedings that are public and may have the effect of damaging reputations.

Conclusion

Mediation is fast becoming a popular form of alternative dispute resolution, having the ability to bring parties together to reach out of Court settlements and facilitate the just, quick and cheap resolution of disputes. If you’re facing a commercial dispute and would like more information about mediation, call LegalVision on 1300 544 755 and our litigation lawyers will be more than happy to assist.

Emma George

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