The Gazette 1994

GAZETTE

AUGUST/SEPTEMBER

1994

Mediation may take place:

(a) following agreement by the

parties to submit an existing

dispute to mediation or

(b) pursuant to a mediation clause, in

addition to, or instead of, an

arbitration clause in a written

agreement or contract by which

the parties agree in advance to

firstly refer disputes to mediation

(see Appendix for sample clause).

Mediation is similar to a settlement

meeting between the parties and

their lawyers, but with the added

presence of a trained third party,

the mediator.

The Mediation Process

Following agreement to mediate, the

mediation itself is then scheduled for

a time and place convenient to all the

parties and their advisers. The parties

initially meet for a joint session at

which each side summarises its case.

The mediator may then define and

clarify the differences and issues

between them. Thereafter the mediator

may meet each party with their

advisers, in confidential private

meetings or "caucuses", at which

movement towards settlement begins.

Some mediators, especially in the area

of family law, employ a model of

mediation which does not include

private meetings or caucuses.

At these private meetings the mediator

further clarifies the issues and begins

analysing and questioning (without

giving his/her opinion on) the

positions, claims and assumptions of

each party. The object of this analysis

is to lower resistance to settlement by

engaging in reality testing. He/she

may ask the parties to put themselves

into their opponent's position and

analyse the case from their stand-

point. The mediator gauges the

differences that lie between the parties

in a way that negotiators, who only

know their own side, cannot.

Mediation succeeds by combining two

integral factors in any negotiation:

communication and trust. The parties

must trust the skill and integrity of the

mediator sufficiently to communicate

their real interests and positions to

him or her, rather than engage in the

normal posturing of traditional

negotiation. Communications with the

mediator in private meetings are

strictly confidential. The mediator

agrees not to disclose what he/she is

told without the consent of the party

telling him. The parties also sign an

agreement prior to the mediation

confirming that all communications

with the mediator will be confidential,

that he or she will not be subpoenaed

in any subsequent litigation and that

the discussions will be deemed to be

without prejudice.

The mediator encourages the parties

to speak freely to him/her and, if they

wish, to vent their feelings and

frustrations about the dispute, thus

meeting their often strongly-felt need

to "tell their story" to an outsider who

will listen, and to confront their

adversary, as a prerequisite to

settlement.

As private meetings continue with

each party, the mediator may engage

in a form of "shuttle diplomacy",

developing the basic elements of a

settlement in the process. Often,

significant movement towards

settlement occurs during the time that

the mediator is in "caucus" with the

other party, when the participants and

their advisers carry out their own risk

analysis. By focusing hard on the

reality of the case, resistance to

settlement may diminish and real

movement occur.

One of the advantages of using a

mediator is that parties can

confidentially explore and test

settlement options without making an

offer and appearing to give in.

Because of the mediator's unique

position as a confidant of both sides,

they may entrust him with best

settlement offers. The mediator agrees

in writing beforehand that if the case

i does not settle, these figures will

never be disclosed.

Why Use Mediation?

(a) Client involvement and control: if

any party is not satisfied with the

procedure, he or she is free to

terminate it

at any time

and to

pursue or continue arbitration or

litigation.

(b) Increased client satisfaction and

client referrals: by using

mediation a solicitor can be seen

by his/her client to have

vigorously taken all reasonable

steps to bring the case to a speedy

conclusion, thus reducing

uncertainty, stress and delay for

the client. The mediation process

itself offers an excellent

opportunity for solicitors to

impress their clients with their

advocacy skills in the opening

session, and with the quality of

their advice throughout the

process.

I (c) Increased profitability: clearly the

quicker a case settles, the sooner

the fee for processing it is earned

by the solicitor - an important

consideration in these days of

cash-flow pressures and escalating

overheads. Early settlement of

cases is very often more profitable

than fighting them in court or

settling on the court door-step.

(d) ADR - a new service to our

clients: in jurisdictions such as the

U.S., Australia and the U.K.,

ADR techniques are emerging as

areas of progressive legal

specialisation for solicitors for the

1990s. Many solicitors there have

undertaken training in the

techniques of representing their

clients at mediation. In the U.S.

over 500 blue chip U.S.

corporations have subscribed to a

policy statement pledging

themselves to use ADR

techniques before resorting to

;

litigation. Many U.S. insurance

companies have established ADR

departments and guidelines, and

require their claims handlers to

submit a minimum percentage of

their claims to mediation, prior to

litigation. Examples include: The

Travellers, The Hartford, CIGNA,

Nationwide, Maryland Casualty,

Chubb Insurance Group and

others.

(e) Avoidance of negligence claims:

because the client

participates

actively in the settlement, engages

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