25 FEB 2022 | WWW.LAWYER-MONTHLY.COM COMPULSORY MEDIATION: IS THERE AN UPSIDE? which can help preserve commercial relationships that are likely to be damaged by the inevitably adversarial process of litigation or arbitration. If a settlement is achieved at an early stage, there can be significant savings of time and costs and, even if a settlement is not reached, the process may help to narrow the issues between the parties. If attempted at an early stage, mediation may also prevent parties from becoming entrenched in their respective positions. Even at a later stage, mediation can give the parties a fresh perspective and an opportunity to reconsider the merits of their respective cases and save the costs of a full trial or hearing. Despite the merits of mediation and increased awareness of the process among the legal community, there is still a perception amongst non-lawyers that mediation is an alternative adjudicatory process to litigation rather than a potentially useful part of the overall dispute resolution process. There is, however, no obligation (even in mandatory mediation) to reach a resolution of the dispute. All parties need to accept any proposed solution; otherwise the adjudicatory process (whether litigation or arbitration) will proceed. mediation is confidential, so long as a party “shows up”, it will be almost impossible for a judge or arbitrator to take obstructive behaviour in the mediation into account when considering how to allocate costs if the dispute does not settle. Similarly, if compulsory mediation becomes seen as a “box-ticking” exercise, the parties may not put in the effort and preparation required to achieve a successful outcome. Timing is also an important consideration. If the parties are required to mediate before issuing a claim or at a very early stage, they may feel they have not had adequate time or information to assess the merits of their respective cases. Rightly or wrongly, litigants frequently believe that the disclosure process, in which each party has to provide to the other adverse documents, will result in the disclosure of a “smoking gun” that will tip the merits of the case in the favour of the party seeking disclosure, and they may therefore be unwilling to engage in any meaningful way until after disclosure. Indeed, there are some types of case, such as actions for breach of intellectual property rights, where it would be very difficult for the claimant to make its case without disclosure of the other party’s The skill of the mediator is to help the parties find common ground. The mediator will encourage the parties to consider not only the strengths and weaknesses of their cases from a legal perspective, but also the risks of proceeding to trial and the costs they may incur, both their own irrecoverable costs and potential adverse costs orders. Even if the parties attempt bilateral negotiations, they may not consider these types of issues sufficiently. Even reluctant parties to mediation may be surprised by the progress they are able to make when they have an opportunity to speak freely in a confidential setting, assisted by a talented and experienced mediator. Anecdotal evidence suggests that around 50% or more mediations do result in a settlement being reached, either at the mediation itself or thereafter. However, mediation is not always the answer. Disadvantages of compulsory mediation Mediationonly succeeds if there is agenuine attempt to settle on both sides. If a party has been compelled to mediate against its will, it is quite likely to fail to participate fully in the process, thereby wasting both its own and its opponent’s time and costs. As There is still a perception amongst non-lawyers that mediation is an alternative adjudicatory process to litigation rather than a potentially useful part of the overall dispute resolution process.
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