By Guy Humble
In a world where all-too-often people and organisations find themselves in costly disputes, mediation has become an important part of the armoury in trying to resolve these issues amicably.
This is particularly the case in intra-family or supply chain disputes where the parties have a strong desire to get past the conflict and continue to have a healthy relationship.
The exponential growth of mediation over the past 15 to 20 years has been driven largely by the sheer costs of litigation and the often inordinate delays in the court process.
Alternative Dispute Resolution (ADR), of which mediation is the most common method, has also been written into many contracts as a mandatory first step in settling a matter before it can go to an adjudicated jurisdiction.
While mediation has become an important part of the legal process, parties need to realise that it involves quite different procedures from the court system where one party effectively walks away as a “winner”.
Mediation, by definition, is a consensual settlement that accommodates the needs of the respective parties. The price of retaining this element of certainty over the result is that it often also involves a degree of compromise on both sides.
In this sense, the outcome is usually something they can “live with”, rather than something they are necessarily ecstatic about.
On the upside, it is a way to avoid the time, effort and cost of the litigation process and create a level of certainty for everyone.
Given the degree of compromise that is often involved, it is important to have a signed deed at the end of the process to ensure the outcome is binding and the matter can genuinely be put to rest.
From my experience, successful mediation requires a sincere commitment from all parties to the process.
While it is less formal than a court process, there is still a need for a significant amount of preparation and a desire to bring a litigious process to an end. Parties cannot be dragged into it. They must genuinely want to do it and buy into the process.
Crucial to this is undertaking the process at the right juncture in the dispute.
If it is a complex piece of litigation, it is almost essential that you have the discovery and disclosure process out of the way so, as an interlocutory step, all of the relevant documents have been disclosed by both sides. In this way, everyone knows what exists by way of the key documents and evidence to support the case.
It is very hard for a mediator to successfully move through the process if, all of a sudden, new documents are being introduced all the time to counteract arguments that are being made on the day.
If the parties are wanting to maintain an ongoing relationship, the earlier the mediation happens in the process, the better.
It is worth noting that mediation may be particularly useful in cases where the parties are in dispute but otherwise wanting to maintain a good family or business relationship.
Internecine disputes that draw out in court can cause long-term damage to relationships. Mediation at the right point can help get to the root cause of a problem before an adversarial process becomes too deep seated.
I find this is particularly the case with intra family disputes. Close families of brothers and sisters, uncles and aunties are suddenly fighting with each other. Without a constructive process, the fall-out can impact families for many years or generations.
Mediation is also particularly effective when one part of a contract is in dispute. Often, this one part can be dealt with in an ADR process while the remainder of the contract continues to operate unencumbered.
The legal skill required to be a successful mediator is quite different to the requirements of other functions in law firms or in the judiciary.
A mediator will not necessarily be concerned about who is right or wrong. Instead, the mediator must listen to both sides of the argument, identify the key issues and commercial implications, and then help the parties to get to a position where the dispute can be resolved satisfactorily.
It takes a particular skill. You can’t be too judicious in making comments on the case. You can, however, use your experience to provide insights into how certain arguments might play out if they ended up in a courtroom.
In this respect, mediation enables the parties to retain control of the process. It is a confidential process in which each party has an opportunity to gauge the strength of their opponent’s case.
If one side has particularly compelling evidence, it may compel the other side to put in an offer to settle. Even when the matter is not resolved in mediation, it often will lay a useful platform to ultimately resolve the matter in subsequent discussions.
Through my involvement with mediation over many years, I have made some useful observations about the power of mediation.
For a start, the vast majority of matters that go to mediation tend to get resolved there, for a fraction of the cost of a court process.
In fact, around 90 percent of matters that start in litigation are resolved before a court ruling, and ADR plays a big role in that.
Sometimes mediation can produce truly remarkable results that go beyond the case at hand.
Some time ago I witnessed a mediation between two family members who had not spoken for many years.
After a day of largely fruitless back and forward arguments between the rooms, the mediator, a former senior judge, insisted on the two family members coming together in the same room.
The end result was tears, hugs, a settlement and the reconciliation of a damaging, long-running family dispute.
It was quite extraordinary to watch.
Very often people in a dispute just want to be heard. They want to tell you what their problem is, and they are looking for answers. Our society can benefit greatly from a process that helps parties find those answers together.
Guy Humble is a qualified mediator specialising in commercial, contractual and partnership disputes. He is the Joint Managing Partner of McCullough Robertson and a member of the dispute resolution practice.
