Mediation/Processes; Virtues & Shortcomings
By Kim Lovegrove, Lovegrove Solicitors
“Dispute Resolution – Comparative Analyses on the Different Theatres of Dispute Resolution”
Mediation is where, be it through the courts or a tribunal or a term of contract, the parties are compelled to refer their dispute to mediation. A mediator is appointed to convene a meeting that is designed to facilitate negotiation and ultimately compromise. The mediator is a facilitator, a cajoler if you will, and has no power to compel the parties to agree upon the outcome.
The process for mediation will be dependent upon how mediation is triggered. Mediation can be triggered by:
A court or tribunal
An agreement to mediate.
A contract can state that when a dispute occurs to do with the contract or any matter of contractual import or bearing the parties must go to mediation. A well-crafted mediation clause will provide that the parties must agree upon a mediator or in the absence of agreement the contract should provide that the matter must be referred to a nomination body to nominate a mediator.
The contract should also provide that the parties will remunerate the mediator on a 50/50 basis and that the mediator will be entitled to have moneys placed into an account in advance of the mediation.
The contract will provide that the parties must meet with the mediator and the contract will provide that a disputant invoking the mediation clause will provide a written dispute synopsis to the mediator once the mediation is triggered.
The contract will provide that the mediator will be free to conduct the mediation as he or she sees fit, but the contract will also provide that if the mediation breaks down then the parties are at liberty to abort the mediation. Conversely the contract will provide that if resolution of the dispute through mediation is effected then the terms of settlement that underpin that accord must be in writing, must be co-signed by the parties and the mediator and the accord will then be binding.
Court or Tribunal Ordered Mediation
Most courts require litigated matters to be referred to mediation before the case goes to hearing. The courts normally have a published list of mediators that the parties can choose from and each party has to pay the costs of the mediator.
If the mediation facilitates a settlement then the matter is concluded and the legal proceedings will be aborted by consent. If the mediation is unsuccessful then the matter will in all likelihood proceed to trial.
In some jurisdictions like the VCAT (Victorian Civil and Administrative Tribunal) the parties do not have to pay for the mediator and this is a significant cost saving and benefit that flows from such benevolence.
Agreement Based Mediation
Any party to any dispute be it civil, commercial or planning can at any time agree to mediate. All the parties need to do is to find a mediator and then in good faith attempt to settle the matter.
There still however needs to be a rigour, there is little point in settling a dispute unless the settlement is agreed in writing, is witnessed and is evidenced by an instrument that states that the parties have agreed to resolve all of their disputes and differences to do with the subject matter.
Any mediated settlement agreement has to be comprehensive, well drafted and must embrace all matters that gave rise to the dispute. Poorly drafted settlement agreements are open to challenge and are frequently challenged when one of the parties in hindsight thinks that result could have been better.
One problem with a mediated outcome that occurs outside the auspices of a court or a tribunal is that its enforceability may be in question. It is prudent to engage lawyers to appear at the mediation, to advise upon the terms of the mediation settlement and the consequence and import of such terms. There should even be a clause in the terms of settlement along the following lines –
In settling this matter I have agreed to do so of my own volition and free will and understand every term and condition of the settlement agreement. I have also had the terms of settlement explained to me by a lawyer and I am prepared to settle dispute on the basis of the terms herein.
If matters can be mediated at the gestation of a dispute, a mediated outcome has considerable merit. There is little doubt that the fastest and cheapest way to resolve a dispute if negotiations breakdown is through mediation. In any partnership agreement that I have entered into with fellow practitioners or businessman I have insisted on the inclusion of a mediation clause. Resort to court, is last resort.
The key shortcoming is that with mediation there is no guarantee of outcome. Although a mediator may very quickly figure out who is in the right and who is in the wrong, he or she cannot compel the parties to settle.