With mediation, the neutral third party encourages all the parties involved to consider, not their legal rights, but their commercial interests, and aims to get them to agree to a compromise that will give both sides something. If the negotiations are successful and all parties agree to observe the outcome, their signature to the agreement makes it legally binding. If the negotiations are not successful or are only partially successful, the parties can still take the outstanding issues to arbitration or litigation, if they wish. With arbitration or litigation, all the parties involved are bound by the decision reached by the arbitrator or judge, after they have considered the submissions and the evidence.
In general terms, alternative dispute resolution (ADR) is likely to be both cheaper and quicker than recourse to the courts. Alternative dispute resolution procedures are also confidential, which means that they may be particularly useful in resolving disputes on matters which are themselves confidential - for example, because they involve industrial secrets or commercially-sensitive terms of trade. Mediation is also a very good way of dealing with disputes where the parties want to emerge with a continuing relationship, partly because the object of the exercise is to create an outcome from which all parties benefit, and partly because the confidential nature of the proceedings means that no-one is seen publicly to 'lose'. Under the Civil Procedure Rules, judges now generally expect the parties to have considered the use of ADR, before commencing court proceedings.
It can be difficult to arrange for alternative dispute resolution (ADR) where one or more of the parties refuses to accept that there is a problem, or is reluctant to engage in negotiations. There may also be situations in which the parties are prepared to negotiate, but there is little or no prospect of a successful outcome - for instance, where one of the parties is pursuing a case against the other for the sake of making trouble, or where one is claiming an unreasonably large sum, and is unlikely to be satisfied with much less. Even though the courts are putting increasing pressure on disputants (through the award of costs) to try negotiations before going to law, they may accept that it is reasonable to refuse mediation in such circumstances. ADR is not an effective way of dealing with a situation where one party wants the other to stop immediately - for example, where one party wants to stop another from selling goods with a design and function similar to its own, or where one party wants to stop harassment by the other. And because ADR proceedings are entirely confidential, they will not be suitable where one party wants to give out a message, not just to the other party, but to all other comers: for example, where the holder of intellectual property rights wants to make it plain that they will be defended, and that anyone who infringes them will be sued. Recourse to ADR does not stop time running where there is a limited period within which action has to be taken. So if you were about to run out of time for issuing a claim, ADR would not be suitable.
Use of alternative dispute resolution can speed up settlement, which means less cost, time and stress than would be involved in taking matters to court. Moreover, the parties make the decisions and do not have to hand over control to a judge or arbitrator. When successful, mediation can produce results which, overall, are more satisfactory to the parties than those that could have been achieved through the courts. These results may include outcomes which are not available from litigation - for example, an apology, or a new means of co-operation. And finally, the process is confidential, enabling the parties to avoid unwanted interest from, for example, competitors or the press.
Yes. Settlement is voluntary, so you cannot be certain of getting a result. To obtain a result from mediation, the parties will have to agree to resolve the matter. There is no outside party imposing a solution, and there is a risk of the process being exploited by a cynical opponent. However, even if the parties fail to reach agreement, and go back to court to get the matter settled, the amount of thought that has gone into deciding what the issues are, and where the parties' interests really lie, is likely to make it much easier to reach a solution than it would have been otherwise. Another potential disadvantage is that, although recourse to alternative dispute resolution (ADR) is likely to take less time than recourse to the courts, it will not stop the clock running where there is a limit on the amount of time within which a legal claim can be made. This is something you need to factor into your considerations, if you are thinking of using ADR.
Either party may do so. Or their lawyers might suggest it, particularly in view of the judges' increasing tendency to require alternative dispute resolution (ADR) - in any case that is suitable (see 3 and 4) - ADR should be considered before there is recourse to the courts.
Not necessarily. However, it might be helpful - depending on the kind of lawyers you use - particularly if the issues involved are complex or emotive. If your lawyers are the kind that focus tenaciously on maintaining your strict legal 'rights', you should perhaps leave them out of the mediation process. If they focus on your wider interests, they will probably be useful.
It can take one month or less, on average, to set up the mediation process.
Yes. You are not necessarily looking for 'concessions'; you are looking for an arrangement that will suit you sufficiently well for you to abandon the idea of going to court, and the mediator is there to help you tease out what that might be. You might, for instance, get no 'concessions' at all about the issue(s) in dispute, but come away with a continuing relationship and new (and legally enforceable) payment terms - or new licences, or a new offer of co-operation in product development - that are worth far more to you.
