Should I Mediate or Litigate my Dispute?
'Dispute' - a word that makes many of us cringe, refers to a disagreement between two or more parties. Disputes can arise in all facets of life and business, and can take place due to an immeasurable number of issues. The most common forms of disputes concern money, contracts, property, employment, directors, shareholders, joint ventures, partnerships and consumers.
Most disputes require the intervention of the court to resolve, resulting in the potential for parties to become entwined in the litigation process for 12 to 18 months prior to the dispute being resolved. Litigation is often a stressful and emotional process, and can become expensive in a very short period of time.
The uncertainty of litigation can also be frustrating, as it is impossible to guarantee just what will happen, how long the case will take or how much it will cost. Mediation, on the other hand, is an alternative dispute resolution process with the potential to resolve disputes quickly, affordably and with limited stress for the parties involved.
What is mediation?
Mediation is a process whereby an independent third party (the mediator) assists parties to a dispute to identify the key issues being disputed, develop options and consider alternatives. The mediator actively attempts to reach an agreement in order to resolve the dispute(s) in question. The mediator has no advisory, or determinative role in the process - but rather facilitates the process required to reach a suitable resolution. The process is confidential and involves a number of stages which aim to make the mediation session more effective and successful overall (of course, this is subject to the parties negotiating in good faith and working towards a mutually acceptable outcome).
Benefits of mediation
Many clients ask me about the benefits of mediation, and why they should consider mediating a dispute that they are involved in, either before litigation has commenced or whilst they are involved in litigation. Mediation has countless benefits, and provides ample opportunity for parties involved in a dispute to agree on a resolution. However, in my view, the five primary benefits of mediation are outlined below:
- Flexibility: The mediation process allows those involved the ability to tailor proceedings to the specific needs of the parties, and gives the parties control of the outcome or resolution reached. This takes the guess work out of the litigation process. Mediation also provides an opportunity for participation by people who are not direct parties to the dispute, but who are involved in some way.
- Faster and cheaper: Mediation can resolve a dispute much more swiftly than litigation, and provides the parties an opportunity to pursue a sensible outcome without investing money in legal fees.
- Confidentiality: Mediation is a confidential process, and as such, it provides parties with a sense of security - which in turn enables them to negotiate in an open, honest and secure environment. Generally speaking, this allows for any underlying interests behind a dispute to be considered and explained, and for realistic options for resolution to be generated.
- Maintains relationships: Mediation provides a forum where disputes can be resolved while still maintaining existing relationships between parties.
- Meets aims of disputants: The most frequent remedy available in litigation is monetary compensation. However, studies have found that money actually has little to do with a dispute, as the primary drivers of disputants were based on issues of principle. Mediation can achieve principle-based goals together with financial settlements.
Mediation can promote the early resolution of disputes, and provides a forum for parties to identify and explore their competing objectives. If you are involved in a dispute, I highly suggest that you consider mediation for the reasons outlined above.
Case study - mediation in action
I recently acted for a client who was being sued for damages in the Supreme Court of New South Wales after being accused of breaching a construction contract. My client denied the allegations and claimed that its obligations pursuant to the construction contract had been fulfilled. The proceedings were commenced in January 2018, with the final hearing anticipated to take place in December 2019 due to various interlocutory applications being made in the proceedings, which combined with the congestion of the court, had delayed the progress of the matter.
Understandably, my client was becoming increasingly frustrated due to the proceedings dragging on. Time was being spent with me rather than being spent on their business, and the legal fees were continuing to climb as time went on.
The parties agreed to participate in a private mediation in good faith, and were able to discuss the disputed issues in a secured forum. The legal representatives for the parties were able to comment on the legal aspects of the matter and work together to construct possible solutions to resolve the dispute, whilst also meeting the needs of the parties. The mediator was able to facilitate the mediation process, gain an understanding of the issues in dispute, and assist the parties in generating a range of suitable options and offers.
All the contributions made by each party involved at the mediation led to a successful outcome for the parties. Ultimately, the mediation was a success, the proceedings had come to an end and my client went back to focusing on its business. The mediation not only resolved the dispute between the parties and the proceedings overall, but it also gave my client certainty as to the outcome of the dispute at a much quicker and cheaper rate as compared with the court process.
If you have a query relating to any of the information in this piece, or you would like to speak with a lawyer in Coleman Greig's Litigation and Dispute Resolution team to discuss whether your dispute might be suitable for mediation, please don't hesitate to get in touch today: