The Dangers of Mediation
Written by Alex Milne, Contruction and Planning Law Expert
Mediation is a form of alternative dispute resolution, seen as an alternative to litigation. Mediations can be arranged in many circumstances. In some cases a contract will mandate that parties attend mediation in the event of a dispute. In other cases the parties may simply refer the matter to mediation by mutual agreement. It is also increasingly common for courts and tribunals to require the parties to a litigation to undergo mediation as a preliminary step before a final hearing and before some of the interlocutory costs have been incurred.
The Benefits of Mediation:
Mediation is seen as a fast and inexpensive manner to resolve disputes, without the formality of a court proceeding. In a mediation the parties are still in control of the outcomes, as no resolution will happen without their express agreement. This is in contrast to a court proceeding or an arbitration, where the outcome will be decided by a judge or arbitrator.
Furthermore, a mediation is generally quite flexible, meaning that multiple disputes between parties can be resolved in one forum, where otherwise these matters may have required separate legal proceedings, perhaps in different courts or even different jurisdictions.
Mediation is also seen as a cost saving tool for dispute resolution. However this theory can be misleading, and can lead to the first risk – arranging a mediation when it is not in your financial interests to do so.
The Danger of a Costly Ineffective Mediation:
Mediations cost money. In most cases where the parties arrange their own mediation, they will have to spend money to retain the mediator, spend money to rent a facility, and spend money on their own legal representatives.
It is correctly noted that these costs are usually significantly less than the costs of a litigation. Therefore if successful, a mediation can achieve an outcome at a lower cost than litigation. However many mediations are unsuccessful, and in these cases the matter will often proceed to litigation. The danger is then, that parties who arrange unsuccessful mediations end up paying for both a mediation and a litigation. In this circumstance the mediation will have increased the cost of resolving the dispute.
To mitigate this risk, it is advisable to consider whether the mediation has a realistic chance of success before agreeing to it. Blindly sinking money into a mediation which is doomed to fail will simply waste time and waste money. Legal advice should be sought on the question of whether a mediation is advisable in your specific circumstances.
The Dangers of a Rogue Mediator:
One factor which parties are not always prepared for, is the role of the mediator. Mediators come from vastly different backgrounds and have varying levels of experience. Some mediators are absolutely brilliant, while others are utterly hopeless.
A poor mediator may in some cases be biased towards one party more than the other, perhaps even subconsciously so. The danger here is that this may derail the mediation. If one party is the beneficiary of the mediator’s bias, they may be less inclined to make attractive offers to the other party. The party who is the victim of the mediator’s bias may lose confidence in the process and cease participation.
In this situation, a legal advocate is your greatest asset, as they may be able to use their own experience to make the mediation meaningful despite the bias of a mediator.
Mediators may also be ‘settlement scalp-hunters’ who care not about the fairness of an outcome but instead care about their own settlement statistics. If the mediator approaches the mediation with the goal of achieving a settlement at all costs they may badger one or both of the parties into making a deal which they later regret.
Generally you will never see that mediator again after the mediation. A settlement scalp-hunter may well head to a bar that evening with their colleagues to boast about ‘another settlement’, meanwhile you fret, trying to reconcile how to live with the actual terms of the settlement you have signed.
Pressure in a Mediation:
Another pressure brought to bear in a mediation will be the pressure from the other party. The other party, and their solicitors, will have spent significant time scheming how they can discredit your position, and convince you that you need to give them what they want. The danger is that you will be influenced by this pressure into making a deal which you are not comfortable with. One needs to be level-headed, and listen to the arguments put forward by the other party, to internally assess whether they have any merit.
Even one’s own mind will bring pressure to bear upon one, and may cause one to make decisions which you later regret. Everyone will feel some pressure during a mediation, but some people are by their nature particularly prone to feeling anxiety.
It is important to be aware of the tricks that your mind may play on you during a mediation. It is always a stressful situation, with the other party, and often the mediator, pressuring you to settle. Fatigue may also become an issue. After hours or even days of permanent arguing, it is easy to feel increased pressure to agree to an unsatisfactory proposal, simply so that you can go home. However a bad settlement agreement may haunt you for a lot longer if a deal is made in such circumstances.
How to Miitigate these Dangers:
The best way to avert the risks inherent in mediation, is to prepare yourself thoroughly. It is almost always wise to consult a lawyer with significant mediation experience beforehand to ensure that your are thoroughly prepared. Your lawyer should assist you with preparation, and in many cases they will appear as your advocate in the mediation.
Your preparation, and the dispassionate assessment of the strengths and weaknesses of your case will help you get to grips with all alternatives, and make an informed decision about what you would be prepared to settle for.
With your lawyer you should honestly assess what the possibilities are if you refuse to settle, including best and worst case scenarios, as well as the most likely outcome if the matter proceeds to litigation. This will help you weigh up what you would be prepared to settle for. By considering these matters before the mediation whilst you are not under pressure, you can walk into the mediation better placed to stand up to the pressure.
Meanwhile it will be you advocate’s job to combat any pressure put upon you by the other party or the mediator, and in turn put as much pressure as possible back on the other side.
Mediation is often a fantastic way to achieve a resolution when parties are in dispute, but it is not suitable in every case, and there are dangers involved which parties must be aware of. Undertaking solid preparation, and retaining a solicitor with significant experience in mediation are advisable.
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