Introduction to mediation

Mediation is one of the most effective ways of resolving disputes.  It is becoming an integral part of our judicial process.

Civil litigation is costly, time-consuming, stressful and uncertain.  These disadvantages are becoming more apparent at a time when few businesses can really afford to be involved in protracted litigation.

Mediation can solve problems which do not involve legal issues.  It can be used to find a way forward in cases of conflict, impasse or uncertainty.

This article outlines the mediation process and explains why it is so successful.

What is mediation?

The AMINZ website describes mediation as

a confidential and consensual dispute resolution process in which an independent and impartial mediator facilitates negotiation between the parties to assist them to resolve their dispute. Mediation differs significantly from arbitration and litigation in that neither the parties nor the mediator are limited by rules of evidence. The mediator is not a decision-maker, and the process is based on achieving co-operation between the parties. The mediator assists the parties to make their own decisions and agreements. The mediator’s role is to guide the process so that the issues can be defined, the relevant information produced and options explored without undue delay or legalistic procedures. When a dispute is resolved in mediation, a written agreement which sets out the outcomes of the issues that have been resolved at the mediation is signed by the parties[1]

What can be mediated?

There are very few disputes that cannot be mediated.

• Mediation can be used in most civil disputes including contractual issues, leases, partnership or other joint venture issues, employment and building disputes.
• Mediation is often used in resource management cases but not usually until the case reaches the Environment Court. Many resource management disputes could be resolved by reference to mediation before the matter is heard by the territorial authority. If an application was referred to mediation before a hearing, I have no doubt that the complexity, time and cost of a hearing (if one became necessary) would be substantially reduced if the local authority referred the matter to mediation before hand.
• Mediation can assist families sort out all manner of family issues including
• Child custody and access arrangements,
• Relationship property and similar disputes.
• Trust administration
• Disputes over Wills

A dispute does not necessarily have to be about legal rights.  Mediation can provide a solution when the courts cannot.

• Mediation can assist in the formulation of business plans where the parties appear to be heading in different directions.
• Mediation can help with the formulation of policy
• Mediation can assist where there is a clash of cultural values
• Mediation can assist in sorting out neighbourhood issues

Advantages of mediation.

Mediation is quicker than most other forms of dispute resolution.

Parties are able to avoid the protracted time delays associated with litigation.

Mediation is much less expensive than other forms of dispute resolution such as litigation.

Mediation succeeds because it helps the parties reach agreement. Mediation is, effectively, assisted negotiation between the parties.  There is no formal presentation of evidence or cross-examination.  The meeting is usually only attended by the parties themselves, their advisers and the mediator.  Third parties can be brought in to help with the consent of the parties.  For example, an expert might be brought in to help resolve a specific issue.

Where the parties litigate a dispute, a third party makes a determination which may not necessarily suit or satisfy the needs of either party. By mediating, the parties are able to come up with an outcome that best satisfies their needs.

The parties can engage in lateral thinking and come up with something outside the square. The result may well be one that a court cannot impose.

Parties often approach negotiation as a matter of carving up and distributing an existing resource. Mediation creates the opportunity to create value and expand the resource.

Mediation can produce an outcome not expected by either party at the outset.  The New Zealand Law Journal[2] gives the following example of a mediation fable

Two employees attended mediation at the behest of their employer. The mediator was advised prior to the mediation that the relationship between the two employees had broken down and the purpose of the mediation was to negotiate an exit package for one of the parties.

At mediation each employee was asked to provide an overview of the problem as they saw it at the time.

The first was relatively new to the place of employment and held a managerial role, senior to the other. His primary issue was a perception that he was not respected by the other employee who was his junior, although he was a long established employee and was part of a long standing and loyal team. He also had an issue of disrespect.

After some conversation about what each perceived as respectful behaviour and the reasons why each felt that the other was not respectful, it became clear that each was relying on hearsay or gossip from others in the workplace. The mediation worked towards clarification of the way each would like to be communicated with and ended with an agreement as to future relationship.

The advisers to each employee commented as they left that they had expected a negotiation about exiting for one of them and were surprised at the outcome. Neither employee had mentioned an intention to leave so exit packages did not form part of the conversation.

Mediators take the problem as presented to them by the parties and in some cases the parties can reach an outcome neither anticipated before entering into the process.

Mediation is voluntary

Mediation is a voluntary process.  Parties cannot be compelled to come to an agreement if they do not feel that an agreement is in their best interests.  Because a successful outcome is one to which the parties voluntarily commit themselves, it is more likely to be an enduring outcome. This makes mediation ideal when there is likely to be an ongoing relationship.

Mediation overcomes posturing and position taking

Negotiations between parties, particularly party is assisted by the solicitors, frequently revert to posturing and position taking.  Litigation solicitors work in a system that is primarily adversarial rather than problem-solving.

An adversarial approach is often the least effective way of sorting out a dispute.

If the parties lack negotiation skills, the entire negotiation process can fall apart.  A mediator can keep the parties focused on looking for common ground and exploring productive avenues of settlement.

Confidentiality

Mediation is a confidential process.  What is said in mediation stays in mediation.  Settlements are confidential.  If the mediation does not provide a complete solution, none of the parties can use any of the concessions made in mediation in subsequent litigation.

Collateral outcomes

Quite aside from the resolving the substantive dispute, mediation has a number of collateral outcomes.

• It can assist overcoming or reducing communication problems.
• Parties gain a much better understanding of their own needs as well as those of the other party. Because the parties have the opportunity to state their case and express their feelings, the other parties to the dispute can get a much better understanding of that party’s position.  This promotes realism.  Communication through solicitors can often lead to a filtered presentation.
• Parties gain confidence from constructive and efficient negotiation.
• The anxiety and other negative effects of the dispute can be avoided or reduced.
• The parties have the opportunity of talking to the mediator in confidence.  This is called caucusing.  The parties can test the water with a proposal by discussing it with the mediator first.  The mediator can get a much better understanding of a party’s position in caucus.  The mediator does not disclose that information to the other party.
• Caucusing is often useful in order to offer a reality test to a particularly obstinate participant.
• Ongoing relationships are improved. Parties gain confidence from successful negotiation.  They are able to work together much more positively in the future.

How the process works

In so many cases, parties cannot even begin to sort out a dispute because they do not have a basic understanding of the problem.

Mediation provides the process and the environment to identify, analyse and resolve the dispute.  There is extensive literature on the mediation process and it is not possible to cover such a wide ranging field in this article.  I will summarise the essential features of the mediation process and why it works.

Approach to resolution.

The mediator helps the parties select the appropriate conflict resolution approach and puts them in the appropriate frame of mind .

This is done by helping the parties understand the process and how the process works.

The mediator may have a number of meetings with parties and/or their advisers and get a commitment from the parties to resolve their differences by agreement.  The commitment is embodied in a mediation agreement.

Defining the problem.

Although the parties will have a basic understanding of the problem before the mediation, there are many instances where they do not understand their own problem they have learned that of the other side.  The mediation process involves collecting the data and defining the problem.

The problem is defined in a way that is acceptable to both sides.

Listing the issues.

Few disputes are so simplistic as to involve a single issue.  The mediator helps the parties identify all of the issues that they would like resolved.  Many negotiated agreements fall over because the parties failed to appreciate the extent of the problem and all of the issues that need to be resolved in order to solve the problem.

The issues are frequently listed on a whiteboard and are prioritised.  By doing this, the parties can see an agenda to work to.  This process often reveals issues in respect of which the parties are in agreement.

By listing the issues, the parties can ensure that all matters necessary to resolve the problem dealt with systematically and in the order of their importance to the parties.

Identifying interests.

Most parties have a preconceived approach towards a desired outcome.  They adopt what we call a “position”.

Very often, this “position” is a misconceived understanding of an outcome that will satisfy a particular party. It is important to go beyond any preconceived positions and identify the interests of the disputants.

Parties have to identify their own interests as well as the interests of the other party.  Interests are the motivators of the disputants and reflect what the parties actually need rather than what they think they want.

Interests are wide ranging.  They may include:

• financial security
• preservation of an ongoing relationship
• sense of appreciation
• fairness or some other value
• the feeling of involvement.

Sometimes a single interest, not previously identified, will create an obstacle to resolution.  For example, I have been involved in a dispute with two parties were suing each other for reasonably significant amounts but the costs of litigation were going to eat up any advantage that the victor, whichever one it might be, might gain.

They wanted to settle but, for some reason, there was an insurmountable stumbling block.

During the course of settlement negotiations, it became apparent that the approach by one of the parties was not motivated by financial considerations.

That party refused to settle because he was worried that any concession made would be an admission of wrongdoing.  It was simply a matter of principle for that particular party.

Once it became apparent that this was the motivating factor, the parties were able to put together a package which involved an ongoing business relationship and a resolution that did not involve any admission of wrongdoing.

This outcome could never have been achieved in litigation which is, essentially, a process that identifies rights and wrongs.

Generating options.

This is where mediation has a distinct advantage over other forms of dispute resolution.

The courts and other adjudicators (such as arbitrators) are limited in the relief that can be provided. Usually, that relief is an order for the payment of a sum of money.

In mediation, the parties can agree on other outcomes.

The process of generating options enables the parties to consider all sorts of alternatives.

Often they go through a brainstorming session where multiple different solutions are listed, considered and developed in the search for the option that best satisfies their interests.

This process is ideal in community, neighbourhood or family disputes.

Preparing the agreement.

The final stage of mediation is putting together the agreement. This is usually done by other parties or their solicitors (if present) although sometimes a mediator will help.

The agreement is owned by the parties. It is not an outcome forced upon them by the mediator. The parties are free to accept or reject the agreement.

The mediator can assist the parties by testing the reality of the agreement and identifying shortcomings which the parties themselves may not necessarily foresee.

The parties may not necessarily reach a settlement on everything.  Where there is multi-issue dispute the parties may well be able to identify and resolve some of those issues.  They may reach an agreement on the way forward on other issues.

Conclusion.

Mediation is about problem solving.  Problems are best solved when the people with the problem solve it themselves.  Mediation promotes that.  It is effective and satisfying.  The outcomes are usually more enduring because they have been tailored to satisfy the long-term interests of the parties

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[1]http://www.aminz.org.nz/disputes/

[2] 2009 NZL J No1 Feb 24