Why is Mediation Necessary?

While litigation may be a valuable tool for addressing disputes, its cost in time and legal fees often restricts its usefulness. Azubike Okoye shares his thoughts on mediation, the benefits that organisations stand to gain by employing it, and why it might be considered a prerequisite to other forms of dispute resolution.

In brief, what are the typical stages of the mediation process under Nigerian law?

The general stages of the mediation procedure are typically governed by the domestic sources of law regulating mediation, such as the Lagos State Multi-Door Court Law 2007 and the accompanying Lagos State Multi-Door Court (LMDC) Practice Directions on Mediation, the Citizens Mediation Centre Law 2007, the Lagos Court of Arbitration’s (LCA) Mediation Guidelines 2011, or the parties’ walk-in process. On occasion, some state courts may have few regulations on mediation procedure, which encourages the referral of disputes before these courts to mediation and other ADR techniques.

The typical stages are as follows:

  1. Commencement: The parties file their claims and responses (akin to pleadings) with the institution and pay the necessary fees for the administration of the procedure. When the parties walk in, the claimant presents their claim, and the administrative staff of the institution or the independent mediator informs them of the appropriate fees for the conduct of the mediation.
  2. Appointment of Mediator: If no mediator was appointed by the parties prior to the submission of the dispute or instrument appointing one, the institution will invite parties to appoint a mediator from the panel of neutral mediators or appoint a non-listed mediator of their choice based on their agreed qualification. In some instances, due to parties’ agreement for a CEDR to mediate, the institution may appoint one.
  3. Preliminary Meeting: This is the mediator’s first meeting with the parties. During the meeting, the location, time, attendees and other details are discussed and agreed upon. Typically, the mediator will get the parties’ representatives in attendance to affirm in writing that they are duly authorised to reach a binding agreement.
  4. Opening Session: This is the initial step of the actual mediation session, during which the parties and their respective counsel (if any) discuss the causes of the disagreement.
  5. Private Caucus: At this step, the mediator convenes a private session with each party beyond the hearing of the other parties. The goal of this stage is to allow parties to present to the mediator all pertinent facts that they deem confidential and that should not be disclosed to the opposing party.
  6. Joint Discussion Stage: This is when the negotiation is resumed, and the mediator provides parties with professional hints and allows parties to discuss how to reach an amicable resolution.
  7. Follow-up Phase: If a settlement has not been achieved, in this phase the mediator follows up with the parties and their respective counsel (if any) and urges them to consider other settlement possibilities.
What benefits do these have to offer to organisations involved in a dispute?

The general benefit of mediation to organisations and parties is primarily hinged on the fact that it saves parties’ time and reduces huge attorney’s fees when compared with proceeding with other dispute resolution models. In most instances it preserves and occasionally enhances their business relationships. It also reduces their litigation or arbitration docket for purposes of audit.

You have recommended that mediation be treated as a prerequisite for other forms of ADR. Why is this?

The overall benefits of mediation to organisations cannot be overemphasised. It is confidential, as parties sign non-disclosure forms relating to all issues that arise during mediation. As noted above, it saves parties’ time and minimises the astronomical attorney’s costs associated with other alternative conflict resolution methods. It also enhances parties’ business relationships most of the time. I regularly see parties walk out of mediation and continue their business relationship, but I have yet to see that after litigation or arbitration.

The overall benefits of mediation to organisations cannot be overemphasised.

As a party representative who has settled a conflict via mediation in a day, I would strongly suggest that parties initially engage in the mediation process. In this case, we had spent around two years in court exchanging pleadings and other papers. Surprisingly, on the very first day the case was heard in court, the judge, in his great wisdom, ordered the parties to participate in mediation. The conflict was resolved at the conclusion of the first preliminary meeting, which resulted only on the issuance of an apology letter and a refund of a nominal court filing fees.

Likewise, I have served as a mediator to resolve a seven-year-long dispute using the parties’ walk-in method. All sides were satisfied and encouraged to explore further business opportunities.

Consequently, I would advise parties to consider mediation first because it is less expensive, informal, confidential, saves time, promotes party autonomy and improves business relationships.

Having acted as a mediator and a mediation representative in cases involving large organisations, how does the size of an organisation affect the way mediation is carried out?
  1. Decision-Making: Unlike individual persons, large organisations participating in mediation take longer to adopt a resolution on a particular issue, which will most likely prolong the mediation process. In addition, the selected representative will report to the management, which will then debate on the matter and approve a resolution; the representative will then publish such resolutions at the next session before communicating it to the mediator.
  2. Changes in Management: Organisations periodically change their management by appointing new members as a consequence of retirement or removal, or by reorganising their staff internally via demotion and promotion. Regardless of the circumstance, this incident could impede the progress of the mediation session and the execution of agreed-upon agreements.
Have you seen any significant trends or changes developing in the mediation landscape during the past decade?

Yes, unquestionably. Parties and attorneys are beginning to take mediation seriously due to its significant beneficial influence in the field of dispute resolution. I have actively engaged in the preparation of a few complex agreements for parties and have observed parties negotiating dispute resolution terms in which mediation was instructed to be included as a first step in a multi-tiered dispute resolution clause. Occasionally, when a conflict crystallises, parties choose mediation above other alternative dispute resolution options.

I would advise parties to consider mediation first because it is less expensive, informal, confidential, saves time, promotes party autonomy and improves business relationships.

Interestingly, the most important ADR legislation in Nigeria is the Arbitration and Conciliation Act, Cap. A18, LFN 2004, which applies countrywide. Arbitration and conciliation are provided for in this Act, but mediation is not particularly emphasised. Now, however, there is a law pending presidential approval that would repeal the aforementioned statute, which now expressly includes mediation. The proposed legislation is the Arbitration and Mediation Act of 2022. In addition, it aims to incorporate the Singapore convention into international settlement agreements emerging from mediation.

Can you share any other insights that you have gained into ADR during your career?

In my experience as an ADR-trained practitioner and expert, I have realised that it is more efficient and gratifying if we encourage individuals and organizations to invest more resources in preventing and managing conflicts rather than investing more money and effort in seeking to “win” them. As much as possible, disputes should be avoided rather than be allowed to occur and then settled. This realisation was due to the immense resources required and the repercussions of antagonistic relationships during and after the resolution process. You can only avoid these by recognising the potential sources of conflict and taking the necessary legal precautions to prevent them. There are a lot of seminars and conferences on methods and models to resolve disputes but there are few on conflict avoidance principles. The world would be a better place if we avoided and minimised the volume of disputes in business relationships.

Consequently, our lawmakers, judiciary, attorneys, and other stakeholders should aid parties in adopting proactive measures in this respect.

Under what circumstances might it be more appropriate to forgo mediation in favor of another dispute resolution model, such as arbitration?

Not every conflict can be mediated, just as not every dispute can be arbitrated. Examples of this include disputes involving a) an accusation of a public offence; b) an illegal contract; c) tax-related disagreements. Sometimes, parties specifically insist that they do not want to proceed with mediation. You cannot coerce mediation from parties; it has to be voluntary.

Aside from the foregoing, I believe that mediation may be utilised in suitable situations.

 

Azubike Okoye

Master of Laws (LL.M.) International Arbitration

University of Miami, School of Law

Coral Gables

Miami, FL 33146

United States

Phone number: +1 786-737-7351

Email: anokoye@miami.edu

 

Azubike Okoye is an accredited Fellow of the Chartered Institute of Arbitrators, UK; Prime Dispute, UK; the Malaysian Institute of Arbitrators, and the Arbitrators’ and Mediators’ Institute of New Zealand. He also holds a Master of Laws (LLM) degree in International Arbitration from the University of Miami School of Law.

Azubike was awarded an undergraduate merit-based scholarship for his academic standing by the then Federal Government of Nigeria. He was also awarded a Young ICCA (International Council for Commercial Arbitration) full tuition scholarship for his academic and professional credentials in the field of Alternative Dispute Resolution (ADR).

Azubike has previously worked with F.O. Akinrele & Co., a top-tier full-service dispute resolution firm led by three quintessential Senior Advocates of Nigeria (SAN) – the equivalent of Queen’s Counsel – where he rose through the ranks to be become a Senior Associate and team lead in the dispute resolution department of the firm for over a decade. During his master’s program, Azubike worked as a practicum student with an International Arbitration law firm, GST LLP in Miami, Florida.

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