SolveUK - Anthony Salata, Mediator - Property Mediation, Arbitration Mediation, Expert Witness, Dispute Resolution and ADR. Contact: +44 (0)20 7808 3349

Mediation: the background

Structured mediation

Many professionals who have not had experience of a structured mediation say they know all about mediation, as it is something that they do all the time, when they try to negotiate a settlement between their client and the other party's client. This process may be successful, but it is negotiation that is taking place, not mediation.

Role of the mediator (back to top)

The essential feature of a structured mediation is the presence of an independent neutral or mediator. The mediator shapes the dynamics of the negotiations that take place between the parties and creates an atmosphere that permits and encourages problem-solving and positive, optimistic thinking, to assist the parties in reaching an agreement.

In litigation the judge is imposed by the system. A mediator, however, is selected by the parties. His or her mediation experience and knowledge of the sector will be known. He or she may already be known to the parties or their solicitors themselves. The quality of the neutral is therefore controlled by the parties.

In general, the mediator:

  • manages the process;
  • gathers and collates information;
  • reframes issues to focus the parties on the key points that could form the basis of agreement;
  • allows the parties to vent their emotions in a controlled situation;
  • assists in overcoming deadlocks;
  • communicates offers and counter-offers and presents these in a non-challenging and non-judgmental way;
  • helps the parties to 'reality test' - that is, to view what might be agreed against the alternative of taking the dispute into another forum, such as the courts;
  • assists the parties in problem-solving, in order to achieve specific commercial objectives;
  • maintains the pace and energy of the process, in order to retain the parties' interest and optimism; and
  • acts as a draughtsman in preparing the contract with the parties' legal advisors.

Crucially, the mediator does not act as an expert or advisor.

Advantages of mediation (back to top)

Some of the advantages of mediation compared with other forms of dispute resolution are noted below.

Party control:

Dispute resolution processes such as litigation or arbitration effectively delegate power to the independent third party involved, and at the same time grant considerable influence to professional advisors. The parties to the dispute become relatively passive. Quite the opposite is the case in mediation. This form of dispute resolution permits the parties to retain virtually all of the power, giving them ownership and control over the proceedings.

Speed:

Mediations can usually be set up in a matter of weeks if the parties or their advisors can make themselves available. On occasions, a mediator can be secured and be available within a week. According to the Centre for Effective Dispute Resolution (CEDR), the average length of a mediation in 2000/01 was 1.25 days, with the majority of two-party matters settled within one day.

Costs:

The costs of a mediation are very much a function of the size of the professional team required. Some mediations may involve no advisors at all, while others will need large teams. In either situation, however, the costs will be a fraction of those consumed in litigation. In addition, the earlier that the mediation is undertaken, the greater will be the saving.

Confidentiality:

While publicity may be an advantage for some parties, they are very much in the minority. Most companies and individuals prefer complete secrecy and confidentiality, which is provided by mediation.

Issues outside of the dispute:

Where parties are happy for their commercial links to continue, it is not unusual to find that a dispute can be resolved through the agreement, via mediation, of a new contractual relationship that is quite outside of the parties' original relationship. For example, party A may agree to provide certain services to party B at a discounted rate, as part-recompense for an acknowledged loss that party B has suffered as a result of the actions of party A. Such agreements can effectively strengthen the relationship between the parties, rather than destroy it in the way that litigation could.

Mediation is therefore of particular value where there is a relationship between the parties that the parties believe is worth retaining in some shape or form. The property sector in particular is a commercial area that almost entirely depends on long-term relationships that need to be preserved. Mediation is frequently ideally suited to the resolution of disputes in this sector.

Disadvantages of mediation (back to top)

  • The disadvantages of mediation include the following.
  • Mediation can only work if both parties wish to participate in it.
  • In some situations, one or both parties may deliberately seek publicity. (Of course, the parties may waive the agreement to retain confidentiality in the mediation, if they wish.)
  • Litigation can offer an advantage to a very strong organization facing a weaker opponent. For that stronger party, recourse to mediation could be thought to be a disadvantage.
  • Mediation cannot offer the advantage of precedent in the event that a series of cases on the issue is anticipated.
  • If mediation fails, the fees will have been wasted.
  • Alternative processes may be adequate to resolve the dispute. For example, commercial rent reviews can be effectively resolved through arbitration or independent expert referral.

A non-binding process

Frequently, textbook definitions state that mediation is a 'non-binding' process. This definition must be clearly understood. It simply means that if the parties do not wish to continue with the process, then they are not obliged to do so. In practice, however, the overwhelming majority of mediations continue until agreement is reached, whereupon the parties sign a binding contract.

Evaluative mediation (back to top)

There may be situations in which the parties wish a mediator to express a view on a dispute, to the extent of the mediator indicating how he or she feels the case might run if it were to proceed to a judicial forum. This process is usually termed 'evaluative mediation'. Most mediators believe this to be a dangerous process, as it often results in one party feeling that the mediator is 'taking sides'. In practice, an experienced mediator can often effectively direct the parties to an accurate assessment of the strength of their positions, without having directly to express a 'view'.