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The mediation process: when and why it is used

by Matthew Rushton on 15 Sep 2016

when mediation is used and why

Mediation can be successfully deployed at any point in the timeline of a dispute – either before proceedings are issued, afterwards, up to, and even during trial. It is, after all, a facilitated negotiation and represents an opportunity to settle early, reducing stress, acrimony and legal costs.

Defining mediation is arguably a futile task: in the same way we accept that “beauty is in the eye of the beholder“, mediation is whatever users can imagine and can agree it to be. Thus, there are many different approaches, which vary widely according to users’ needs and the demands and timing of the case.

Early mediation

The clear advantage of mediating early in the timeline of a dispute is the potential cost saving derived from early settlement. An early mediation can often address the issues in dispute before the parties become entrenched in their positions.

The litigation process has a polarising effect, and parties become more distant and often more hostile as lawyers optimise arguments and prepare to put their best case to a judge. Early mediation can circumvent many of these issues. However, facts often take time to develop and if the issues are insufficiently clear resolution may not be forthcoming. In that scenario, an initial mediation may not result in a settlement.

However, having previously established a roadmap to resolution and narrowed the points in issue, a follow-up mediation will more than likely succeed.

Mid-stage mediation

Settlement windows open at various points en route to trial. Mediations are often held six to nine months before trial when all the necessary documentation is available, and the parties can be confident of the facts. 

While the factual backdrop may be more certain, the parties by this point may have incurred 85 per cent of the costs of going to trial and the costs themselves can become an obstacle to resolution. Nevertheless, industry averages suggest that between 70 per cent and 90 per cent of such mediations result in a settlement.

Later-stage mediation

There is a long tradition in England and Wales of settling on the steps of the court. While common, it is plainly unsatisfactory for litigants to have borne the misery and cost of litigation over a period of months and years, only for a settlement to emerge at the 11th hour – particularly when the same result could have been achieved earlier.

Nevertheless, an impending trial concentrates the mind, and it is not unknown for cases to continue to be mediated during a trial – formally or informally – and a settlement reached before judgment.

In conclusion, parties should remain mindful of the option to mediate along the entire course of the litigation. Even a mediation that doesn’t result in a complete settlement will likely narrow the issues to the point where parties can settle the matter themselves, or substantially reduce the scope and time of any subsequent hearings.

To read more about how mediation and arbitration can help businesses settle commercial disputes more cost-efficiently and effectively, read our eBook on the subject, Litigation in Review.

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Topics: ADR, Mediation, Litigation

Matthew Rushton

Written by Matthew Rushton