Mediation is negotiation facilitated by the introduction into the dispute
of an intermediary. Two or more parties meet with a neutral third party, who
guides the negotiation process, advising and listening to both sides, and helps
the parties arrive if possible at a “win-win” settlement or at best one
which the parties can live with. Unless or until encapsulated in a formal agreement,
a mediated settlement is non-binding. If any party to the dispute is not satisfied
with the outcome, that party may opt not to sign a settlement agreement and
may proceed to another form of dispute resolution procedure.
Mediation is now one of the fastest growing forms of dispute resolution processes
in the world. It avoids the backlog of the national court systems, it is relatively
quick and inexpensive, its solutions can be tailored to a specific situation,
the process is private and confidential and, since the goal of mediation is
problem-solving, it is often successful in preserving working relationships.
These benefits are further magnified in an international context where the
costs of arbitration are much higher and the logistics more complex. In general,
except perhaps in the USA and some European countries, ADR is in practice equated
with mediation.
Mediation is one of the most informal dispute resolution procedures. The process
is completely flexible and negotiable by the parties and any party may walk
out at any time. This does not mean, however, that a mediation is a free-for-all.
The process is most effective when subjected to the guidance of the mediator,
perhaps operating in accordance with a pre-agreed protocol.
Mediation procedures can derive from a variety of sources. The parties may
choose to abide by a set of rules already established by a dispute resolution
organisation. The parties to a dispute are also free to amend these rules or
to write their own procedures, thus allowing them a degree of influence over
the procedure that would not be available in most national courts.
The mediator remains strictly neutral throughout, although he may exceptionally
be asked to render an opinion based on the arguments and evidence he has heard.
Generally, the non-binding, non-threatening nature of a mediation allows each
participant to be more open to new ideas, more creative in their approaches,
and more willing to consider compromises, using the mediator as a facilitator
for this process.
The mediation process is usually said to be voluntary, batik is increasingly
common for parties engaged in busiest include dispute resolution clauses in
their commercial contracts, stipulating that mediation is to be attempted first
the event of a dispute. In some jurisdictions mediation also increasingly being
encouraged or mandated by the courts.
Mediation is best suited to disputes in which:
Because mediation is a process in which the parties control the outcome, it is more likely that a working relationship will survive mediation than it will litigation or arbitration. Mediation can resolve an infinite variety of disputes, but it is not a panacea. Some cases are better tried in court, and litigation may be preferable when:
The ideal time to elect for mediation is before a dispute occurs. This is
why many commercial contracts with suppliers, customers, unions and joint venture
partners now include mediation clauses. Some clauses simply state that mediation
will be attempted before the parties consider litigation or arbitration.
Other clauses are considerably more detailed. Once hostilities have begun,
it can be very difficult to find any common ground for agreement. By making
a pre-dispute stipulation that mediation will be used, all sides can enter
the dispute resolution process on an equal footing.
Whilst the ideal time to select mediation is before a dispute occurs, mediation
can be useful at any point in a dispute and can be employed at almost any stage:
To prepare for mediation each party should be certain about its interests,
expectations, and goals. Before the process begins each party should prioritise
its needs, make sure its proposals are “reasonable” and brainstorm various solutions.
Since the aim of mediation is to arrive at a mutually beneficial solution, not
to create winners and losers, each side should make a good faith effort to analyse
its opponent’s interests.
Each side should prepare to arrive at the mediation with essential evidence
and documentation necessary to support its case. These may include documents,
graphs, photographs, charts,or any other form of evidence. The mediator can
be an excellent resource to help parties prepare fully for mediation. Many
mediators offer pre-mediation advice on everything from procedural rules to
case preparation.
Choosing a mediator, where choice is an option, may be the most important
decision the parties take in the mediation process. Surveys have shown that
the skills of the mediator can make a significant difference to the success
of the process. A mediator is a diplomat, not an advocate. A successful mediator
possesses a range of innate and acquired skills, including:
The ability to analyse complex legal issues quickly
To this list is essential to add absolute impartiality. A mediator must have
no interest in the outcome of the dispute and must be a “neutral” in
every sense of word.
In a relatively short time the mediator must set a tone of co-operation and
civility, and win the trust and confidence of all sides. In achieving this
the importance of communications skills cannot be overstated. In many cases,
the parties are not nearly as far apart as they believe; they are simply “not
speaking the same language”. A good mediator can often listen to an argument
that one side has rejected and frame it in a way that both parties can understand
and are willing to consider. He or she is able to defuse emotional language
so the intent is clear. In multi-party cases the mediator must be particularly
sensitive to shifting alliances and the development of coalitions among the
parties.
In all cases, parties should reach an understanding about which qualities they
want in a mediator and select someone who is acceptable to all sides.
It is also important for the parties to ascertain the mediator’s fees
and other costs associated with the mediation process and to ensure that there
is proper administration of this process. The mediator may be required at the
outset to meet independently with all parties to see whether all can be persuaded
to mediate, to advise on the mediation process, make the necessary logistical
arrangements, provide quality control mechanisms, and generally oversee the
administration. A mediator may feel the need for administrative or research
assistance, and these additional costs should be openly discussed with the
parties. In most cases, fees and costs are shared equally by the parties. However,
if one party wants to encourage the other side to try mediation, the proposing
party may offer to cover all or most of the expenses.
Neutral dispute resolution organisations regularly help parties select mediators
for their particular disputes. Fees vary greatly. Some mediators charge hourly
fees, other prefer per diem fees. Court-affiliated mediators and mediators
with community-based programmes often charge no fee. In addition to the mediator’s
fees, parties generally pay a fee to the administering organisation.
Parties must carefully consider who should attend the mediation. It is particularly
important that someone with decision-making authority be present. A written
agreement is often drafted as soon as a settlement is reached and a person
authorised to sign such a document is required from each side. The presence
of important decision- makers at the proceedings also improves the scope for
effective negotiation and minimises the risk that a sound agreement will later
be rejected.
Many parties, particularly company executives, choose to be represented at
a mediation by lawyers. The lawyer may counsel the executive on the pros and
cons of an offer, educate the executive about the legal issues, draft documents
for the mediator, help draft the settlement agreement, and advise the executive
on effective presentation. The executive is often the best person to communicate
the company’s case directly to the other side and to help generate creative, “win-win” business-orientated
solutions.
At the parties’ discretion, witnesses may be brought in to give evidence,
or may be asked to be available by telephone. Similarly, it is up to the parties
to decide if a neutral expert should be brought in to review evidence. In personal
injury or highly technical cases, outside experts can be extremely helpful.
The parties’ primary consideration should be that no one should be excluded
if they can make a meaningful contribution to the negotiations. However, the
parties should be sensitive to the dynamics of the situation and should be
wary of having so many people present that the efficiency of the meeting is
sacrificed , or that the number oppresses the other side and inhibits the settlement
atmosphere.
A mediation can take place in any, preferably neutral, location that can
accommodate both private and joint meetings. There is no set format for the
actual mediation process. As a general rule, however, mediations involve a
series of joint and separate meetings.
The first step is usually a joint session at which all sides meet with the
mediator, who describes the mediation process and reviews the ground rules
for participation, behaviour and confidentiality. The participants discuss
such matters as the role the mediator will play, who will represent each side
during the discussions, who has authority to sign a final settlement, and what
documents will be exchanged. If litigation over the matter is pending, the
parties and the mediator can also discuss whether any pre-trial activities
and discovery should be suspended, and whether the court should be informed
of the suspension and the mediation. At this point, if either side has any
doubts about the mediator’s style or expertise, a substitute may be requested.
Either party can also suggest modifications in the procedures or rules.
Mediation procedures or rules are aimed at creating an atmosphere of co-operation
and respect. They can deal with such matters as setting an agenda, limiting
the scope of the negotiation, defining the role of the mediator (this can range
from a purely facilitative role to one in which the mediator may offer advice
and opinions), defining the use of private meetings, agreeing what documents
will be submitted to the mediator, establishing how confidentiality will be
maintained and stipulating how the sides will respond to media inquiries.
This initial meeting also serves as an open forum for the parties to explain
their positions and express how they believe the case should be resolved. At
this stage the mediator begins to gather the facts, becomes familiar with the
case, and assesses the interests and perceptions of the parties. Each party
also has an opportunity to rebut the other side’s arguments under the
supervision of the mediator, who may ask questions.
If the mediator requests written statements from the parties and/or court briefs,
pleadings or other documents that are part of pending litigation, another joint
meeting may be scheduled to give each side an opportunity to prepare and gather
these materials. In this case, the parties may wait until the second joint
meetings to discuss their positions in the dispute.
The mediation itself will begin with the mediator explaining the process, its
objectives and his own role. Each side will then present its case by means
of oral submissions. One major advantage of mediation is that this process
allows the parties to “vent” and engage in a sort of catharsis by
having their “day in court”. This therapeutic interaction often helps
move parties to settlement but, throughout the process, participants should
remember that patience is key to a successful outcome. Detailed, sometimes
lengthy presentations of the facts are crucial at the outset to educate the
mediator.
The mediation then enters the problem-solving phase. During this phase, the
mediator may hold one or a series of private meetings or “caucuses” with
each party. The mediator shuttles between the parties, probing each side’s
position, asking questions, assessing the merits of each argument, narrowing
the issues, by identifying what is important and what is expendable, and exploring
alternative solutions. The mediator may request additional documents from participants
in an effort to understand the case from each side’s perspective. At the
same time, he or she works to defuse any hostility, in part by re-framing the
issues in objective language acceptable to both sides.
The mediator will usually discuss settlement proposals with each side and may
give guidance to the parties if the position taken by one or other seems unreasonable
or inappropriate. If the mediation involves many parties, it is more likely
that the mediator will be asked to propose a settlement. Once a “reasonable” offer
is on the table, it becomes the basis for negotiation. If the parties are having
difficulty coming to agreement, the mediator may request more private caucuses
to help bridge the gaps.
Once the case is settled in a way that is agreeable to all sides the mediator
and/or the parties will draft a document spelling out the agreement and stipulating
how it will be implemented. Since the mediation is non-binding until agreement
is confirmed, a proposed settlement may be rejected by either side. If this
occurs, the side objecting to the settlement may consent to work towards a
new settlement, or it may give up and proceed to arbitration or litigation.
It is important to note that mediation often leads to a more durable agreement
because the agreement has been achieved by the parties themselves.
If both sides agree to, and sign, a settlement agreement at the conclusion
of the mediation, the parties are bound to uphold that agreement. The settlement
agreement is a contract and an action for breach of contract may be brought
if it is not performed on either side. If litigation is pending, it may be
possible in some legal systems for the settlement to be lodged with the court
(or expressed in the future as a judgement by consent or arbitration award)
so that it may be enforced without requiring a separate action for breach of
contract.
Private meetings with the mediator are considered “privileged and confidential” in
many jurisdictions, so the parties are free to confide in the mediator about
the strengths and weaknesses of their cases and to disclose information not
communicated in joint session. Thus, as part of the caucus phase, the mediator
must make clear what information he or she would like to divulge to the other
side and how that information will be conveyed.
The parties may wish to execute confidentiality agreements prior to mediation.
The extent to which these are effective and will ensure privilege in legal
proceedings will depend on the local law. Some dispute resolution organisations
have sample confidentiality agreements that parties may use for this purpose.
Parties can adopt these agreements or amend them. They cover issues such as
assuring confidentiality of conversations between parties, prohibiting transcription
of proceedings, requiring that all documents be returned to the originating
party and prohibiting the mediator from serving as a witness, consultant, expert
or arbiter in any action related to the matter. All parties, lawyers, mediators,
and others privy to the mediation should agree in writing to any confidentiality
rules.
In some jurisdictions it may not be possible to protect everything disclosed
during a mediation from subsequent disclosure in court proceedings. Information
used during a mediation can also become public. If, for example, the information
is subpoenaed by a third party in unrelated legal proceedings. In rare instances
in the USA mediators have been compelled to disclose information from a mediation
when the facts have been deemed to involve overriding public interest or health
and safety. Communications can also be disclosed if the parties and the neutral
agree in writing to allow disclosure or the communications have already been
made public.
Finally, in spite of the importance placed on confidentiality, experts caution
parties not to stipulate confidentiality in terms that are so broad and restrictive
that, for example, they prevent disclosure of an agreement in subsequent civil
proceedings. Such agreements may make it very difficult for a party to take
action later to get the mediation settlement enforced or changed.
Prepared by Peter Watson and MOR
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