Mediation is a flexible, voluntary and confidential form of alternative dispute resolution in which a neutral third party assists the parties to work towards negotiating settlement of their dispute.
It is important to understand that it is not the mediator you need to persuade, but the other party you are in dispute with. Unlike a Judge or Arbitrator the Mediator will not decide the case on its merits, but will work to facilitate agreement between the parties. There are many reasons to mediate. Formal action, particularly court proceedings, is expensive and the courts are now taking control of costs and making sure that any costs recovered are proportionate to the amounts of money in dispute. Adjudication is often cheaper and quicker than litigation but as well as the possibility of receiving “rough justice”, very often each party pays their own costs of the Adjudication.
A good mediator will focus the parties on the importance of understanding the effect of not reaching settlement in terms of cost and otherwise and the impact of irrecoverable costs which arise in other dispute resolution mechanisms.
Other reasons to mediate include keeping the dispute and its outcome confidential, and to avoid setting a precedent. It may also help to resolve
the dispute at an earlier stage hopefully whilst the project is still ongoing. Other connected parties and disputes can be brought into mediation and you may resolve everything with everyone at once.
To obtain the most out of mediation good preparation is essential, to include putting together a case summary and supporting documents in advance, assembling your best team for the mediation, preparing an opening presentation and a strategy for the negotiations in the light of your risk assessment. It is also sensible to have in mind your “bottom line” and to stick to it. It is also best to bring with you a draft settlement agreement or if court proceedings have been already issued, a draft consent order. If a mediation is successful you still need to record the agreement accurately in writing and everyone must sign it. Only then will it be binding.
Finally, patience is a key factor as mediations can often take a very full day.
The construction team at Gullands, and other dispute resolution teams in the firm, are very experienced in representing clients at mediation. For more information please contact David whose details are at the end of this Update.