Mediation before litigation

Mediation Before Litigation

Abraham Lincoln once said “discourage litigation. Persuade your neighbours to compromise wherever you can”. In addition to being a president he was also a lawyer so he understood that mediation can sometimes be a good alternative to litigation.

Mediation can be as formal as an independent mediator being appointed to work with the warring parties to get them to come to an agreement on a particular date. Each party prepare for a mediation, much like it is an actual hearing. However, people feel a bit free to speak their mind as they are not being cross examined. Things said in mediation are privileged – which means it cannot be used against you in a hearing. For these reasons, mediation is often less stressful than a day in Court. So consider trying mediation before litigation.

Bear in mind that once you commence proceeding, many judges will order parties to attend a mediation. For some types of claim, such as a Family Provisions Act claim, it is compulsory before a hearing. Various types of mediation are also compulsory in Family Law. But note – you cannot be ordered to agree to any offers the other party might make, you are only ordered to attend. It’s important to make sure any agreement to settle is written down, signed and capable of being enforced. For example, if company A owed company B money, you cannot reach a binding agreement that Company C will pay that debt (unless of course company C agrees to it). Your solicitor will include a number of terms that will make your agreement enforceable. If you are already involved in litigation, any agreement can be placed into Orders that the Court will then stamp, acting as though you had a judgment in the matter.

An agreement can also come about in an informal way – such as both lawyers chatting over the phone about a resolution with each call getting closer to agreement. Whichever method is tried, both parties need to be prepared to engage in the mediation process and at least try to resolve their dispute.

One key benefit of mediation is that the parties have agreed on the resolution themselves, so it is often more practical for their own particular circumstances. It is often easier to re-establish a commercial relationship after a mediation, rather than dragging someone through a hearing.

Sometimes people simply cannot agree on anything and mediation will not achieve a resolution. Other times, a dispute is of a highly technical nature requiring expert evidence and novel legal arguments. Again, these matters may not be suitable for mediation. Even though litigation is often expensive and stressful for many businesses it goes hand in hand with doing business, hopefully only on an occasional basis.

Whether or not your dispute is resolved at mediation or you end up running a full blown hearing – you must have legal representation skilled in preparing your evidence and presenting it to the Court to ensure an enforceable outcome.