Choosing mediation when resolving disputes

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August 16, 2018
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If I suggest mediation to a party with whom I have a dispute, am I signalling that I lack confidence in my own case?

Mediation offers many advantages to parties for resolving a range of disputes, when compared to litigation and arbitration. The mediator must however be properly qualified. Lawyers, who understand mediation, have an important part to play in assisting their clients in the mediation process.

Many disputes which parties take to court are settled just before trial, but after the heavy legal costs of preparing for trial have been incurred. However, a substantial majority of such disputes could have been resolved much earlier by mediation.

Mediation may be defined as “a confidential, facilitative and voluntary process in which parties to a dispute, with the assistance of a mediator, attempt to reach a mutually acceptable agreement to resolve the dispute.”

Several aspects of this definition require comment. Mediation usually takes place through an agreement between the parties. However, in some jurisdictions, court rules can prescribe court-annexed mediation, whereby the parties must first try mediation before they can refer the dispute to court. Unlike litigation or arbitration, where an outcome is imposed, a settlement achieved by mediation only binds the parties once they both agree to it. The mediator’s function is to assist the parties in reaching a settlement. Also, unless the agreement to mediate provides otherwise, a party may withdraw from mediation at any stage, thereby terminating the process.

Advantages include a considerable saving in time and costs. Moreover, a settlement reached by the parties is typically not just based on their legal rights, but takes their current and future interests into account. Even commercial disputes involve more than legal rights and financial payments. In the mediation process, broken relationships can be restored. Even if mediation does not fully resolve the dispute, the issues can be substantially narrowed, reducing the duration and costs of subsequent litigation or arbitration. Mediation also takes place “without prejudice”. Parties may freely participate in mediation without the danger of any concessions or admissions made in the attempt to settle being used against that party in subsequent litigation or arbitration. Because of these advantages, in countries like Ireland, a lawyer must certify that the benefits of mediation have been explained to the client before the client commences court proceedings.

Mediation can however have disadvantages. It is not realistically possible to reach a fair settlement before the parties and the mediator have adequate information regarding the dispute, which may be in documents possessed by only one of the parties. There is also the danger of a party agreeing to mediation as a delaying tactic or in an attempt to gauge the strength of the other party’s case, but with no intention of reaching a settlement.

A successful mediation requires the appointment of an appropriately qualified mediator, who should usually have some expertise regarding the subject-matter of the dispute. The mediator must be properly trained and accredited by a reputable mediation service provider and have experience as a mediator. Mediation is a highly flexible process. For example, a mediator may hold side-meetings with one of the parties in the absence of the other, in order to discuss the dispute. The mediator must win the trust of the parties regarding his or her integrity and ability to conduct the process with competence and firmness. Even if the parties have legal representation, the mediator is primarily responsible for ensuring the fairness of the process.

Lawyers are trained to play an adversarial role to win a case in court for their client. However, a lawyer who understands mediation, can provide valuable assistance in a mediation and the mediator’s task is often easier where the parties have competent lawyers. Their role includes helping the client prepare for the mediation and to understand the process, advising the client during the negotiations and assisting with drafting a settlement agreement once a settlement has been reached.

Mediation has long been used in South Africa for labour disputes, but is increasingly used for family disputes involving children, commercial matters and even in disputes regarding medical negligence. Government’s commitment to mediation’s potential for creating access to justice is demonstrated by a recent amendment to the Magistrates’ Courts Rules enabling pilot schemes for court-annexed mediation in Gauteng and the North West. Based on experience in other countries, court-annexed mediation can substantially reduce congested court rolls. Also, the SA Law Reform Commission is currently working on two separate projects involving mediation- one on family dispute resolution and the second on possible legislation to promote mediation generally.  Mediation clearly has an important role to play in promoting access to speedy and affordable justice in South Africa.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Reference List:

  • Brand, Steadman & Todd Commercial Mediation: a User’s Guide (2nd edition 2016)
  • Irish Mediation Act 27 of 2017, definition of “mediation” and section 14
  • Magistrates’ Courts Rules (as amended on 18 March 2014) chapter 2
  • Rycroft “Settlement and the Law” 2013 SALJ 187-209
  • South African Law Reform Commission: Project 94 Alternative Dispute Resolution; Project 100D Family Dispute Resolution.