Mediation is an alternative dispute resolution procedure and is suitable for all civil cases where the parties are committed to reaching settlement. It involves the parties meeting in the presence of an independent and neutral third party, the mediator, whose role is to facilitate an agreement by the parties to settle the dispute. Unlike a judge, the mediator has no determinative powers and is not able to make a binding ruling in relation to the dispute. Accordingly, whether the matter settles at mediation and, if so, on what terms is entirely within the parties’ control.
Mediation takes place in a confidential and private setting. All negotiations and discussions at the mediation are carried out on a without prejudice basis and are non-binding on the parties. This helps to encourage the parties to engage in a frank exchange of their positions and expectations. The mediation process is designed to help the parties identify and understand the key areas of dispute, to develop options, to consider the consequences of those options and to reach an agreement which will satisfy the parties’ respective interests.
Mediation provides the parties with an opportunity to reach commercial outcomes that cannot be achieved by the courts. For example, while a court can interpret the meaning of a contract, it cannot help the parties to renegotiate the terms of that contract. Mediation, on the other hand, allows the parties to agree to such a course of action. Mediation is particularly effective where the parties have an ongoing relationship which they would like to preserve as it allows them to formulate their own mutually acceptable solution. Terms of any settlement reached at mediation should be recorded in writing and signed by the parties, at which stage the settlement terms will become binding. Even where the parties do not settle their dispute at mediation, they may find that the process has helped them to narrow the issues which may, in turn, reduce time and costs at any trial or arbitration hearing.
Parties are able to agree to mediate at an early stage in the dispute or litigation process before significant legal costs are incurred and before the parties have become entrenched in their respective positions.