Mediation or Court?

 In Business

What is the issue?

Are you in a legal dispute with someone? There’s a good chance your dispute will be resolved through a mediation with the other side. We all know the threat ‘I’ll see you at court’. While it lacks the same force, in most cases it would be more realistic to say ‘I’ll see you at mediation.’

Getting a court to decide your case is definitely one way of resolving a dispute. However, the vast majority of litigation commenced in court will never reach a final hearing. Most cases will settle beforehand, with the parties coming up with their own solution to their dispute. Commonly, that will be a commercial solution, regardless of legal strengths and weaknesses.

Often, it’s just too dangerous and costly to leave the final decision to a judge, magistrate or tribunal member.

Benefits of mediation?

This is where mediation comes in. In mediation, a mediator facilitates the parties to discuss their dispute and find a way of resolving it. It’s certainly a lot cheaper than paying for fully contested legal proceedings to final trial. It’s generally compulsory for the parties to have first attempted mediation before a trial can commence. While you may think of the trial as the main game, for many cases the mediation will be the place where the issues are fleshed out and resolved.

This means you need to go into a mediation well prepared. Here are some things you should consider before going into mediation:

  • Think about possible outcomes you could achieve at the mediation.
  • Put yourself in the shoes of the other side. What solutions of yours are they likely to find acceptable? What outcomes would be mutually beneficial?
  • Think beyond legal remedies. A court will decide a case on its legal merits, but often the parties will have commercial or personal considerations that are equally important (or perhaps more important), than who’s right or wrong in the eyes of the law.
  • Ask yourself what is your ‘best alternative to a negotiated agreement’ (BATNA). This should be your course of action if there were to be no settlement at mediation. The stronger your BATNA, the more bargaining power you hold.
  • Have a realistic assessment of the other side’s BATNA. The weaker their BATNA, the stronger your position. Conversely, if they have a strong BATNA (e.g. because they have a good legal case), your bargaining position is weaker.
  • Be prepared to argue your position by reference to objective standards that both sides respect. If you can demonstrate the fairness of your position, you are more likely to reach agreement.
  • Know your legal position. The most important of the objective standards you can appeal to is your legal position, because that’s the standard that will apply if the mediation fails and the matter goes to court.
  • The outcome at mediation is in your own keeping. If there’s no settlement at mediation, then the outcome passes out of your keeping and into the keeping of a judge, magistrate or tribunal member. You may or may not like their final decision at trial.

Any Tips

  1. You don’t need to wait until court action starts in order to mediate a dispute, though commencing litigation may be necessary to bring the other side to the table. It can also strengthen your bargaining position, as there’s significant more impetus to come to an agreement when the next step is a trial. Your lawyer will be able to advise you on what is the best strategy to adopt.
  2. Try to settle on an outcome ‘you can live with’ rather than your optimum outcome.
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