What is Mediation?

What is Mediation?

Mediation is the process whereby a neutral third-party is appointed to help parties negotiate a solution to their dispute. This is regarded as the first step in the alternate dispute resolution process. In this, the third party appointed is called a mediator and has no decision making power. Rather, their duty is solely to identify and assess all options, with the ultimate goal of assisting parties in resolving the dispute.

When Is Mediation Necessary?

Mediation is available for all cases, regardless of its complexity or the number of parties involved. Additionally, mediation is an extremely cost and time efficient process. It also allows for flexibility and is highly confidential. Therefore, mediation is necessary when:

  • parties are willing to participate in the mediation process.
  • parties need to maintain a business relationship.
  • parties would rather negotiate terms that best suits their needs opposed to leaving it to a judge.
  • parties are ordered by the court to attend mediation prior to going to court

Why Mediate?

Mediation offers many benefits compared to going to court, including: 

Time 

More often than not, settling a dispute through mediation can be more time effective compared to going through the courts. This is because there are no court delays or lengthy waiting periods to appear in front of a judge or formal court procedures that must be followed. 

Cost

If a dispute can be resolved through mediation, the costs of going to court for litigation can be avoided. This means you will avoid paying excessive legal and court costs. 

Keep in mind as well, the majority of court ordered mediations are conducted by Judicial Registrars, however parties can agree to use their own mediator at their own expense

Stress

Mediation is a more informal process and is less intimidating than appearing in court. This gives both parties a stress free environment where they can attempt to settle a business dispute.

Confidentiality 

Mediation is a private confidential process, anything that is said during the mediation is usually made unable to be used in court if the case goes to trial.

Finality

Settlement agreements can usually only be modified with the agreement of all parties. The court can grant both parties an order recognising the validity of your agreement that was reached during mediation.

Do I have to go to mediation? 

It is always wise to attempt to settle disputes outside of court and attending mediation is an effective way to do so. Mediation can sometimes settle the case in full, or partly resolve a business dispute. If an agreement is reached during mediation the agreement will usually be drafted and signed by both parties at the end.

Also, mediation can sometimes be ordered by courts and tribunals in Australia, before a trial can proceed. In some circumstances if a party refuses to attend mediation a court can make an order for the attending parties cost to be paid. Also refusal to go to mediation can look unfavourable if your dispute comes before a judge. Thus, it is advisable that you attend mediation as a first step to resolve your dispute and avoid the repercussions.

What happens at mediation?

Before commencing mediation the mediator will take suggestions from both parties and consider the best way to resolve the dispute. The mediator will explain the process and briefly summarise the background and issues to do with your matter. They will encourage an open forum for discussion between both parties and make suggestions to help resolve the issue. It is also common for the mediator to meet with both parties separately as well as together given the nature of the dispute. This is a flexible process and can change on a case by case basis.

To Sum Up

  • It is a common first step in the dispute resolution process
  • It is available in a large context of commercial and civil matters, regardless of complexity or the number of parties involved
  • It can be an extremely cost and time efficient process
  • If an agreement is reached during mediation the agreement will usually be drafted and signed by both parties at the conclusion of the process

If you need any help preparing for mediation, or have any business disputes which need to be settled, contact our business lawyers for help or call us on 1300 337 997.

About Phillip Salakas

Phillip is completing his law degree at the University of Technology (Sydney). He worked previously with Lawpath, and Justice Action. His interests are with construction and technology law.