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What to expect at a commercial dispute mediation?

in Business Law by James Naughton on

If you're involved in a commercial dispute, either as a plaintiff or defendant, you'll probably be required to participate in a mediation. This is an important part of the Court process and while not mandatory, this step is usually required. There's a reason why mediation is so commonly ordered by Courts – it often works.

Mediation is a structured negotiation process. The purpose of a mediation is to seek to resolve the underlying disputes between parties and to attempt to have the parties resolve their differences in a manner that is acceptable to them, as opposed to having a resolution imposed on them by the Court.

Who attends at mediation?

The mediator

The mediator’s role is to assist the parties to negotiate a way to resolve the dispute, or at least a pathway forward. There is no set process to achieve this outcome.  Different mediators can have different styles and can adopt varying methodologies depending on the issues and the objectives of those attending the mediation. The mediator usually tries to get the parties to identify the central issues in dispute and then work on potential outcomes.

Mediators can also act as a facilitator of negotiations between the parties.  The mediator is required to be independent and to act impartially. Mediators are also required to keep anything you say to them confidential, unless you specifically tell them to deliver a message to the other side.

The lawyers

The lawyer’s role is to act as an advocate for their clients. Often lawyers will be asked to make an oral presentation at the mediation outlining the strength of their client’s case and the weaknesses of the other side’s case. The lawyers are also often asked to negotiate with their opposing lawyer, or to discuss potential options for resolution with the mediator.

The litigants

The litigants (or clients) are required to attend at a mediation. Litigants do not need to prepare for mediations (their lawyer should be prepared) but they are often advantaged by listening carefully to the advice of their lawyer and, sometimes the views of the mediator. On occasion, the presentation made by the lawyer from the other side is the first time that a litigant will get a clear view of the position that the other side intends to adopt at trial.

The persons with the ultimate authority for settling a dispute are required to attend. Ultimately, the decision on whether to accept or reject a proposed settlement rests with the litigants, after receiving advice from their lawyers.

Who decides whether mediation should take place?

Mediation can occur through a voluntarily decision between the parties, by virtue of a contractual agreement, at the request of a party or by an order of the Court.

The Court has the power to order that parties attend mediation, irrespective of the complexity of the matter, number of parties involved or whether the parties agree.

Who will be the mediator?

In some cases, the Court will invite parties to consider a list of preferred mediators or arrange for a Court Registrar to act as the mediator. It is also often open to the parties to appoint their own mediator, by agreement. If a decision regarding the appointment of a mediator cannot be agreed, the Court can appoint one.

Organising the mediation

Once a mediator has been agreed, the parties will need to decide on a time and place for the mediation to take place.  A mediation can be hosted at the offices of the law firm of one of the parties, or a neutral mediation venue or conference facility can be agreed.

What happens on the day?

Mediations can take many forms, but a commonly adopted process is as follows:

  1. The litigants and their lawyers arrive at a mediation venue and are shown to separate private rooms, where they can prepare for the mediation and speak confidentially.
  2. The mediator introduces him or herself to the litigants and their lawyers in their separate rooms and then calls the parties and their lawyers together for a joint conference.
  3. At the joint conference, the lawyers for each party present their respective cases. Usually, the presentation will cover the strengths of the parties’ respective claims, the weaknesses of the other side’s position and any pathways for resolving the dispute. There is often an opportunity for the parties’ lawyers and the mediator to ask questions to get a better understanding of the issues in dispute. The litigants are normally present in this open session and are often given an opportunity to participate by the mediator. Litigants should seek legal advice on whether they should participate prior to doing so.
  4. Once the joint session is completed, the parties then retire to their private rooms. The mediator may then often move back and forth between the rooms to communicate messages or offers. From this point on, the conduct of the mediation can take different forms, depending on attitude of the parties and the issues in dispute. It is usually a matter for the mediator to make an assessment of the best process to use to facilitate discussion and the exploration of resolution options. The mediator may for example, call the parties together for further joint discussions, hold confidential discussions with parties on the issues or act as a negotiation ‘shuttle’ between the parties on settlement offers.

It’s not unusual for commercial litigation mediations to last a full business day and sometimes into the evening. It is important for clients to prepare themselves for a potentially protracted process and often stressful process.

If you have any questions about the mediation process, please get in touch today.

James Naughton
Commercial Litigation and Business Law Claims, Senior Associate
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