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Alternative Dispute Resolution: A Guide to Mediation

There are several Alternative Dispute Resolution (ADR) processes, but mediation is overwhelmingly the most common and frequently used process.

What is Mediation?

Mediation is a confidential where an independent and neutral mediator is appointed by the parties to assist them to reach a settlement of their dispute. The process can take place prior to the commencement of legal proceedings or alongside formal proceedings.

The objective of mediation is to reach a settlement that brings the dispute to an end on terms acceptable to both parties – mediation is not intended to determine the correct legal position of the parties. The mediator does not act as a Judge and does not make decisions – he or she explores options for settlement with the parties.

The Advantages of Mediation

There are a number of benefits to mediation, the most obvious being speed and cost. Most mediations can be dealt with in one day or less and arranged in a few weeks. The cost savings of a mediation compared to a fully contested trial are likely to be significant.

The process is a conciliatory one and therefore there is a better chance of preserving ongoing business relationships at the end of the process, and mediation is a confidential process meaning that anything done or said, and any of the documents created for the mediation are without prejudice and cannot be referred to in any subsequent court proceedings.

When is it best to use Mediation?

Mediation is suitable for most types of dispute. Historically it was considered a sign of weakness to suggest mediation. Courts now actively encourage mediation before and during the litigation process. Parties are required to give an explanation to the Court as to whether or not ADR has been considered. The Court has the power to impose sanctions on parties who are not, without good reason, prepared to engage in ADR.

The right time to mediate will usually depend on the circumstances of the case. Generally speaking, the key to timing is ensuring that you have sufficient information and evidence to make sensible decisions about settlement options. The earlier you mediate, then the greater the savings are likely to be. Mediation can be less productive if attempted too early if a lack of information prevents the parties from assessing the merits of their case.

The Mediator

The parties jointly agree the appointment of a neutral third party to act as the mediator. Usually this will either be through a mediation service provider and by the parties agreeing to instruct an independent mediator. The mediator’s fees can vary but usually are insignificant compared to each parties’ fees and the sum in dispute.

The mediator controls the mediation process and encourages open discussions between the parties. The mediator does not have any power to make a decision or order production of documents or evidence, although the mediator will express views on the merits of each parties’ case (usually in private with that party) with a view to encouraging a settlement.

The Mediation

Prior to the mediation, the parties will enter into a mediation agreement which sets out the agreed process, confidentiality and the costs of the mediator. The parties will usually exchange a position statement 7 days prior to the mediation setting out their position.

On the day, the mediator will usually begin the mediation with informal introductions and a joint meeting will take place involving all the parties. The mediator will set out his or her ground rules for the day and may ask each party to make an opening statement or alternatively may ask the parties if they are happy to rely on their position statements.

The mediator will then conduct a series or private meetings with each party, to learn about their case and get a better expectation of their expectations. The mediator is likely to ask questions to test the strengths and weaknesses of each parties’ case. Further meetings are likely to continue throughout the day with the mediator encouraging the parties to put forward settlement proposals.

If a settlement is reached, then the lawyers present will draw up a settlement agreement. The agreement becomes a binding document once it is signed by all the parties. If no agreement is reached, then the parties have the ability to pursue their rights and claims through litigation or as appropriate.

If you need any help and advice in relation to Commercial Disputes or Employment Law, please do not hesitate to contact me or the team on 01133 50 40 30 or at hello@scesolicitors.co.uk.

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SCE Solicitors is a boutique employment law practice based in Leeds which advises clients nationwide.  Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here.

Richard Newstead
Latest posts by Richard Newstead (see all)
Richard Newstead

Richard qualified as a Legal Executive over 20 years ago and has significant experience in Employment law and Litigation. Richard acts for both employers and employees drafting and advising on settlement agreements, contracts of employment, consultancy agreements, directors service agreements and general workplace policies. He acts for commercial clients in the employment tribunal dealing with unfair dismissals, constructive dismissals and claims for discrimination.

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