What Are The Pros And Cons Of Mediation?

 

What Are The Benefits of Mediation to Individuals Going Through A Dispute?

• Generally Effective – 80% of cases work for mediation and have a successful resolution. Contrast this to the litigation process which is unpredictable, produces winners and losers and the remedy is blunt and offers limited solutions. Per the website of Centre for Effective Dispute Resolution website, over 70% of the cases that it deals with settle. The UK National Family Mediation suggests that over 80% of their mediation cases “reach full settlement”. Other evidence in the UK is similarly impressive. And United States research which is admittedly based on evidence a couple of decades ago, suggests that the overall success rate of mediation in the US is, or at least was some twenty years ago, around 80-85%. However, the evidence is not all one way. Evidence submitted to Sir Rupert Jackson in connection with his inquiry into legal costs, for instance, showed that 95% of personal injury cases settle without the need for formal mediation. And a US study by the Rand Corporation involving 10,000 mediations suggests that, while over 70% of cases resulted in settlement, they may not have resulted in much savings by way of costs or time. Therefore, do not view mediation as some kind of panacea.  

• Informal – However this should not detract from the intensity of the process but mediation is a more relaxed forum than the Court process. Clients like it because they can resolve disputes in a way that they are familiar with, namely negotiation. Whatever the rights and wrongs of the dispute a CEO of a business are not going to like being cross-examined in a witness box and this is a way to resolve that process.

• Potentially more cost effective – Mediation will normally be more cost effective than litigation. It is efficient and can avoid the “per hour” charging structure of most professional firms. The ground covered by mediation would normally take months in a traditional negotiation. • Offers more solutions – A court is often limited in what it can award. Mediation allows for a variety of decisions to be made. In the case of Halsey Dyson LJ observed, “We recognise that mediation has several advantages over the court process. It is usually less expensive than litigation which goes all the way to judgment….Mediation provides litigants with a wider range of solutions than those that are available in litigation: for example, an apology; an explanation; the continuation of an existing professional or business relationship perhaps on new terms; and an agreement by one party to do something without any existing legal obligation to do so.”

• Retain control of the process compared to litigation where even the best cases are not certain to succeed. It is crucial element of mediation that the parties choose the agreement rather than having one imposed upon them by a judge or an arbitrator.

• Speedy – The ground covered in mediation would often have taken months in a traditional negotiation.

• It is suitable where parties need a continuing relationship. Litigation tends to exacerbate differences between parties and by the end of a case parties are unlikely to want to renew their relationship. With every day that the case moves on, the relationship between the parties gets worse and worse. A senior manager is not going to take too kindly to being cross-examined in court whatever the rights and wrongs of the dispute.

• Confidential – litigation often takes place in a public forum. Mediation is both without prejudice and confidential. In these types of disputes settlements can be re-jigged so that public acknowledgements can be made and press releases issued.

• The Court may impose cost penalties if the parties can show that they have not considered mediation. Whilst this is applicable within general litigation proceedings, this does not yet apply within Employment legal proceedings though it looks likely that the new employment rules will require some form of incentive to consider mediation.

• Enforceable – A settlement contract within mediation can be enforced like any other contract though it may not be as readily enforceable as a judgement of the court. What are the dangers of mediation and when should you not mediate?

• Need injunctive remedy – When rapid protective action is required to protect assets, evidence or reputation such as abuse of intellectual property rights.

And What Are The Disadvantages Of Mediation?

• If you are convinced that you will do better with Court. Court cases do fundamentally involve a significant level of risk but if as a professional advisor you are convinced that you will do better in Court, then you should avoid mediation, subject to the rules of the Court.  

 • If you have no confidence that the other party would honour the terms of the agreement. In these circumstances your party’s best interests will be served by going directly towards trial and a court judgment.

• Limitation period – Formal legal proceedings need to be issued prior to expiry of limitation period although parties can consider an agreement to extend the period or an agreement to mediate in parallel with formal proceedings

• If you really want your day in Court 

• If you believe that getting judicial input is the best way to go.

• The Negotiator’s Dilemma – open dialogue may tempt the other side to greater demands. This is a particular dilemma relating to mediation. Nevertheless with the way that the Courts are operating it is increasingly not a sign of weakness to propose mediation.

• The other side may be on a fishing expedition though the mediator can test this.

• The other side may get a particular idea on a line on enquiry for how to pursue a case from a particular exchange that takes place in the case. Said against that, the mediator should be able to control this line of conduct. In my experience this only happens in a minority of cases.