Alternative dispute resolution – what to expect from mediation and how to prepare effectively

Mediation is one of the more popular choices of alternative dispute resolution (ADR) and involves a neutral third-party mediator assisting parties to litigation in reaching a negotiated settlement. This form of ADR appeals to litigants because the process and outcome is controlled by them and offers more flexibility in the terms of settlement compared to the decision of a judge following trial.

An overview of the benefits of using mediation

Most disputes are suitable for mediation – it is an effective and useful form of ADR, mainly because of the speed (disputes can be settled on the day, rather than over the course of years if the claim is issued at court), costs savings and the fact that the parties can control the outcome.  Additionally, parties can agree to mediate at any time before or during court proceedings, and the court can also pause the case at any time to allow parties to mediate if agreed (known as a ‘stay of proceedings’).

The process is entirely voluntary and confidential – settlement cannot be imposed on the parties and whatever is said during the process will only be shared if both agree.  It is also done  ‘without prejudice’ meaning that if court proceedings are commenced, nothing said during the mediation can be used in court.

Parties typically share the costs of mediation, which will include the mediator’s costs, the cost of hiring a neutral venue and costs of the parties’ representatives attending.

During civil proceedings, parties are expected to engage in ADR as a means to settling claims without the need for a trial. The court can impose costs sanctions on litigants that unreasonably refuse to do so. It is therefore important to consider mediation and invite your opponent to mediate as soon as possible.

How to prepare for a mediation

• Try to establish what your top and bottom lines for settling the dispute are before attending mediation (but do not tell your opponent).
• It is important to have a clear understanding of your prospects of success should the case proceed all the way to trial. Whether you have strong or weak prospects of succeeding at trial will dictate how you approach mediation.
• Always remember to include the costs you have incurred on legal fees and other disbursements in your settlement figures and build this into your proposals for settlement.
• Be prepared to work with the mediator and with your opponent to reach a settlement. If one party comes to a mediation and is not willing to negotiate a deal, the process is unlikely to be effective.
• Make sure those who attend the mediation have the authority to settle the dispute on the day of mediation within realistic parameters.
• Be brave – you should always try to say something in the opening session to your opponent to add that personal touch, rather than relying on your legal representatives to do so.
• Try to listen to and understand your opponent’s position.
• Consider what will happen if you do not settle the dispute at the mediation and the risks involved in proceeding with a claim up to and including determination of the claim by a judge at trial.
• Be realistic. A good settlement will not feel like a victory for either party at the time but should ultimately be seen as a commercial decision to avoid the risks and costs involved in the dispute continuing.

The structure of a mediation – what to expect

1. The parties are responsible for agreeing on the date and length of mediation, the identity of the mediator, the venue (often neutral to ensure no party gains any home advantage) and the steps to be taken before a mediation.
2. The parties will plan and prepare for the mediation, including pre-discussions with the mediator and their opponent (if they choose to do so).
3. The parties arrive at the mediation – there will usually be a room available to each party and its representatives, a room for the mediator and/or a large room where all the parties meet initially to start the mediation (the ‘plenary session’).
4. The mediator will make introductions and each party will be invited to make an opening statement, setting out their position and their approach to the mediation.
5. The parties will then separate into their individual rooms and the mediator will visit each party in turn to privately explore the dispute in detail and discuss settlement without the other side being present. If parties are willing to make offers of settlement, the mediator will relay these offers to their opponent and act as negotiator by “shuttling” between the rooms conveying information and offers. This stage continues for as long as needed to try and secure a settlement.
6. It is open to the parties to resume joint sessions at any point to discuss the subject matter of the dispute or explore settlement options directly.
7. Once the parties have agreed terms of settlement, this will be documented and the parties will record and sign the settlement document (If settlement is unlikely, the parties can choose to end the mediation and the dispute will continue.

What if the mediation is unsuccessful?

If the dispute does not settle at mediation, this does not mean that parties should ‘shut up shop’ and either issue proceedings at court or start preparing for trial without considering settlement further. Think about whether any tactical offers can be made immediately after mediation – as all parties to litigation have taken the time and effort to try and settle the dispute, it is an opportunity to build on progress made at mediation where everyone has been thinking about settling.