Why Mediate?

What is Mediation?

Mediation is a voluntary process in which two or more parties in dispute agree to the appointment of a neutral third party (the mediator) to help explore and understand the issues they have. It is the parties themselves, not the mediator, who decide the terms of any agreement that is reached, and the mediator has no authority to make any decision regarding the parties’ issues.

Mediation, as used in law, is a form of alternative dispute resolution (ADR), a way of resolving disputes between two or more parties with concrete effects. Typically, a third party, the mediator, assists the parties to negotiate a settlement. The mediator does not decide on the verdict, the disputing parties agree to their solution.

Disputants may mediate disputes in a variety of domains, such as commercial, legal, diplomatic, workplace, community and family matters. More specifically, mediation has a structure, timetable and dynamics that “ordinary” negotiation lacks. The process is private and confidential and, without prejudice. Participation is typically voluntary. The mediator acts as a neutral third party and facilitates rather than directs the process.

Mediators use various techniques to open, or improve, dialogue between disputants, aiming to help the parties reach an agreement. Much depends on the mediator’s skill and training.

The Mediation Process, What to Expect ?

Every mediation process is unique, but as a general rule, there are key stages in mediation. A mediator is jointly agreed and appointed by both parties; either directly or through legal advisers. The date for the mediation is set and a neutral venue agreed. The venue will generally have 3 separate rooms to enable private discussions for each party and one room for face-to-face negotiations if appropriate.

In advance of the mediation, the Mediator will receive the material documentation and a case summary for each of the parties to enable him/her to be fully briefed on the dispute. Whilst the mediation process is largely informal, the parties sign a mediation agreement, which records the basic ground rules and procedure that are to apply during the process.

On the day, ( in some cases, after initial private meetings with each of the parties) a joint meeting of the parties and their legal advisers is convened to enable views to be exchanged and issues identified. In a series of private (and confidential) meetings over the course of the day, the Mediator meets separately with each of the parties to explore key issues and to fully understand their commercial needs. As the process progresses, the Mediator’s role is to help the parties to engage in constructive negotiations.

The Mediator uses his experience and professional skills, whilst working with the parties throughout the day, to bring each side closer together to find an effective resolution to the dispute, that satisfies all those involved. The commercial settlement is documented and the parties sign a written and binding agreement, generally on the mediation day. The dispute has now been settled and both parties can continue with their day-to-day business, including maintaining a working relationship with each other if applicable.

Important Considerations

  • It is not the role of the mediator to try to influence or persuade one party to conform to the requirements of the other nor are they there to dictate the terms of the settlement. The role of the mediator is to explore both sides of the dispute and identify a common interest from which to find a workable solution.
  • Where disputes have become personal or emotions are running high, it is the mediator’s role to find a route through these emotions, creating the right conditions and atmosphere that will enable constructive negotiation to take place.
  • When a resolution is found that both parties agree on, the mediator will work swiftly with both sides’ legal advisers to finalize a legally binding agreement, which brings the dispute and any court proceedings to an end.
  • In the unlikely event that a settlement is not agreed on the day, the mediator will outline the key points still outstanding with a view to further negotiation at a later date.
  • The mediation process is designed to take place over just one day (albeit sometimes a long one!) with the objective of a settlement being reached by the end of that day. However, in highly complex or multi-party disputes further time might be needed and in which case the mediation could run into the next day or at the next convenient date for all parties.

Advantages of the Mediation Process

  • That mediation is private and confidential;
  • That mediation is without prejudice;
  • Pending on the particular industry and nature of mediation required, the initiating party foots the bill for the mediation. In other cases again, cost have been carried jointly by parties as per agreement.
  • That mediation (even if unsuccessful) may result in the narrowing down of the issues to be adjudicated.
  • That nothing is agreed until everything is agreed and reduced to writing and signed by the respective participants and/or their legal advisors.
  • That a skilled mediator is in a unique position during private breakaway sessions to help generate settlement options.

What are the Benefits of Using Mediation?

There are many benefits of using mediation as a means of dispute resolution, some of which can be identified as follows:

  • It’s a quick resolution method – depending on the group size of disputing parties, 80% of cases can be resolved within a day.
  • Mediation occurs between the parties in a dispute compared to formal litigation where cases are argued in open court and as a result matters that are in the private sphere become a matter of public knowledge.
  • Parties can tailor the settlement to their particular situation
  • Mediation brings a win- win result compared to the “winner takes all” outcome of the litigation process.
  • It is cost effective – the distraction, delays and expense of formal action are avoided.
  • The parties stay in control of the outcome, meaning that they are more likely to comply with their own agreements..
  • It prevents a breakdown of living and working relationship between the parties and tries to ensure that the parties maintain a good relationship in the future.
  • Successful mediation results in future cooperative problem solving as opposed to court cases. It is an effective form of restorative justice.
  • It fits with the recommendations from the ACAS Code of Practice, which sets out key principles in the handling of grievance and disciplinary situations in the workplace in particular.

While the growing global popularity of mediation, has at its base the "escalation of legal costs", it is also the growing awareness that litigation tends to diminish value, while mediation unlocks value by improving communication between disputants.

It is therefore not surprising that The Institute of Directors of South Africa (IoDSA), as well as King III on Good Corporate Governance, recommend the following dispute resolution steps to be taken by companies:

  • Negotiations, failing which
  • Mediation, failing which
  • Arbitration/Litigation

I trust that this overview will assist with answering your questions in terms of the mediation process, as well as highlight the growing awareness around the value proposition that mediation brings to the dispute resolution arena, both in the South African and Global environments.

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