In the commercial world, sometimes things don’t work out. Whilst that’s (usually) no-one’s plan in a business relationship, it’s a business fact. The traditional assumption was that a dispute meant litigation; and litigation means cost, delay, irreparable relationships and pretty much everyone losing something; even the “winner”.
There are, though, better ways; in many cases, the best of these is mediation.
As a starter, it’s worth saying what mediation isn’t.
it isn’t another word for arbitration or adjudication. Arbitration is litigation, done differently. Rather than using the apparatus of the courts, the parties to a dispute agree to appoint an individual as an arbitrator, and to pay the arbitrator’s fees. It is, in a sense, more a private litigation mechanism, though it comes under the law – the outcome of a properly constituted arbitration is binding, and except in very limited cases, cannot be appealed. The arbitrator acts as the judge and makes a binding decision. It might be quicker and more decisive than formal litigation (because of the limits on appeals); but it will still a legally argued process, with intensive use of lawyers. It is not cheap justice, but it is alternative justice.
Adjudication is similar – favoured in the construction industry, and similar areas, where it is important that a dispute is quickly ruled upon, because the building project has to proceed; it can’t wait for years, or months, whilst a court’s timetable can accommodate a series of hearings.
Mediation is entirely different.
Sometimes people talk of mediation and arbitration as if they are the same, “alternative dispute resolution” thing. They are entirely different. Of course, just as most litigation settles, so can arbitration settle before a ruling is made by an arbitrator. Mediation, though, is dispute resolution. It is not litigation.
The purpose of mediation is to enable the parties to reach a resolution between themselves. Of course, if they were able to do that, themselves and unaided, they would not be at mediation. But the mediator is the facilitator, not a judge or a replacement for a judge. The mediator will help achieve a settlement by looking forward, not back (but shining a light on the background, where it helps); by probing, exploring, allowing the parties to have and to share, privately and confidentially, their underlying issues. Rather than sitting, adversarially, in a courtroom or the equivalent, they will be in separate rooms, in their own company and having exploratory conversations with the mediator.
Generally, a mediation will be concluded within a day – sometimes a long day. The success rate for mediations is strikingly high, with the outcome being a settlement between the parties – not, ever, a decision by the mediator. A mediation agreement might well contain agreements which a court would not have the power to impose; it is a contractual document, not a judicial one, and the mediator will not be a party to it, nor be the author of the document. However, it will be the skill of the mediator which brings the parties together, by exploring not principles, but interests; by using gentle but strong authority to maintain a momentum towards settlement. Above all – any agreement will have to be that of the parties. It is not the mediator’s agreement.
The benefits are enormous. The relationship between the parties might be preserved (equally, it might not); the cost will be a small fraction of the cost of litigation. The parties should reach a position where no-one is the loser. The risk and jeopardy of litigation will have been avoided. The vast expense of time and attention required for litigation will have been avoided. By moving at an early stage to mediation, damage will be minimised, and a constructive approach taken. Even if mediation fails, the fact of it being attempted will be seen favourably if a matter goes to court (and refusing to mediate will be seen in a poor light); and many matters which don’t settle at mediation, are settled soon after – the fact of the mediation process changed the narrative and created a momentum to settlement.
At Berwins, we are proponents, advocates for and practitioners of mediation. Founder and managing partner is a CEDR Accredited mediator as well as an accredited member of the Society for Computers and Law, and Head of Dispute Resolution Andrew Mawdsley, as well as being an accredited mediator, is a deputy district Judge. In each case, we bring to bear many years of experience in negotiation, facilitation, and the resolution of commercial issues. We see mediation as the future of dispute resolution – with litigation as the last resort, but mediation as the better way to resolve disputes.
Paul Berwin is Managing Director and a Solicitor within our Commercial and Digital teams. If you need advice or support on any of the above, contact our Commercial team on 01423 542 777.