Litigation or Mediation

Litigation or Mediation

Litigation or Mediation?

Mediation is a mechanism which puts the awareness of settlement into the consciousness of parties in dispute, it is future-focused and seeks getting the parties beyond their conflict, and it is about finding resolutions and not about proving who is right or wrong. When blame and judgment are removed, resolutions see the light much faster.

Mediation can be used in various disputed matters with a few exceptions. In recent years, the usage of mediation has grown exponentially. Whilst mediation is a concept widely considered and used in common law jurisdictions, it is starting to flow recently within civil law jurisdictions such as the UAE.

Although the benefits of the use of Alternative Dispute Resolution (“ADR”) are recognized and explored within the region, the advantages of mediation are sometimes ignored, and this is due to the possible lack of understanding of the process.

In order to decide on whether or not to mediate a dispute, it is very crucial to understand what the process involves.

Mediation is a Voluntary Process

Mediation is not possible without the express participation and commitment of all parties concerned. That said, mediation will cease if one or all parties choose to exercise their right of walking out. Therefore, all parties must agree to commence the process with the right attitude.

Mediation is a Confidential Dispute Resolution Process

One of the key features of Mediation is that it is both “without prejudice” and “confidential.” In other words, the discussions and/or any documents submitted during the process cannot be used against the party who made or produced them in any following proceedings. A mediator is bound by a duty of confidentiality to each party both during and after the mediation and, therefore, the position of either party is not compromised in any way if the mediation fails and some other dispute resolution route is pursued.

Non-Binding till the Point of the Settlement Agreement

The mediation process does not bind the parties until a settlement is reached and the parties with authority undergoing the mediation process sign the settlement agreement which is binding and enforceable. The mediator does not make any binding resolutions or orders and if the parties choose not to agree on a settlement at the end of the mediation, then the underlying matter can simply move onto the next stage of legal proceedings.

The Third-Party Mediator is Neutral

The mediator must be a completely neutral person and is not associated with any of the parties and should have no interest in the outcome. It is very critical that all parties trust the mediator and entrust authority in him/her.

One of the major roles of a mediator is to facilitate the discussions between the parties, allowing them to explore options, which they may or may not have previously considered. The mediator focuses the parties on their aims and requests for settlement. It is very important to note that the mediator is not a judge, and is not there to give opinions or impose a decision, rather, the mediator creates the conditions for dialogue between the parties, and in doing that, the mediator operates with a non-adversarial and non-partisan approach. This being the case, the outcome of mediation is, at all times, decided and agreed by the parties, not the mediator.

The Parties Negotiate a Settlement

The process of mediation is entirely flexible. This means that the parties remain in control of both cost and outcome whilst being guided by the mediator. The parties are responsible for their own decisions and accountable for the terms of any settlement that they may agree upon.

Albeit the parties may run their mediation in whatever manner they chose, there is, however, a developed classic mediation pattern. This pattern involves the mediator opening the mediation session with the parties. During this opening session, the mediator explains the process in detail, flagging out the rights of the parties and the characteristics of mediation discussed in this article. The mediator may then answer the parties’ queries pertaining to the procedure. At this stage, each party makes an opening statement, and thereafter, the mediator usually separates the parties into private rooms and spends time with each party in turn (known as private caucus or private sessions). During the private caucuses, the mediator usually discusses the dispute and tries to explore the challenges and understand the required aims of the parties and evaluates the attitude

of each party towards settlement. The private sessions are an essential part of the mediation process. These sessions provide the opportunity for the parties to express their own viewpoints, “clear the air”, vent feelings and say what they want whilst abiding by standards of ethics and morality.

Mediation aims to resolve a dispute by increasing all parties’ interests and to achieve, as much as possibly feasible, a “win-win” outcome. In all events, the parties must agree to the terms of the settlement themselves which makes the outcomes so creative that a court or tribunal may never consider or impose. Whilst a judge or a tribunal would simply review available evidence and apply the applicable legislation to a dispute, parties in mediation must agree their own terms of the settlement which allows for originality and extra-legal solutions.

The Strength of the Mediation Process

One of the most salient tools of mediation is unlocking the potential for settlement as it addresses the underlying causes of conflict or controversy. Skilled mediators investigate the potential for mutual gains in resolving disputes and strive to get an eagle’s eye view of the conflict by exploring the pertinent values, needs and priorities of the parties.

Mediation enables the parties in a dispute to focus their minds on the reality of the dispute and possible negative outcomes rather than detailed legal arguments. It encourages the parties to realize the value of avoiding legal proceedings where the merits of the case are argued thus providing extralegal solutions which could not be considered by a court or tribunal.

It is very important to note that mediation has a very high rate of success. It is a quick and

considered an inexpensive process when compared to arbitration and/or litigation. The average mediation will last one day enabling the parties to rapidly finalize a dispute and move on. At any rate, and in the cases where settlement is not reached, and this is in the minority of the cases, the mediation process may help to reduce the number of disputed issues between the parties thus saving exorbitant costs of litigation preparation. Money, time and energy are wisely spent in the mediation process and the opportunity for rebuilding trust, where relationships have broken down, is proffered.

When is Mediation not Suitable?

Mediation is especially useful at an early stage when a legal claim is anticipated but not yet filed. However, mediation can also occur after litigation. Examples of cases suitable for mediation include personal injury matters, business disputes, real estate disputes, breach of contract, etc.

Mediation may not be suitable when there is no bona fide dispute. In other words, when one side’s position is devoid of merit. This often happens when one party believes to have a strong case on the merits, while the fact implies this not to be true. Mediation may also not be suitable if a solution is needed that needs a court order including injunctions or other court compulsory or prohibitory orders.

Emotional Issues

Many people have a difficult time with conflict, and emotions can skyrocket, which makes it even harder for parties to communicate. This stress generates a limbic response in one’s brain associated with fight or flight. When this part of one’s brain gets activated, the rational and genius part of the brain is shut down, which makes it harder to find answers. Mediators can provide a safe space for conversation making it easier for the parties to find bridges for resolution. When limbic response is activated, parties may struggle to understand what damages they are entitled to recover, the cost of litigation, the emotional toll of litigation, the length of litigation and the possibility of appeals, and the fact that they may lose and recover no damages.

Recent Developments in the UAE

The UAE is impressive in progressing the implementation of different forms of mediation such as the Center of Amicable Settlement of Disputes in Dubai and the DIFC Courts’ own ADR rules. It is noticeable that the mediation process is becoming more and more available; however, it may take time for mindsets to change in order to accept mediation notions, which may not have been considered in the past.

Summary

Mediation has numerous advantages, it is affordable (costing less than litigation), efficient, effective (settling over 85% of initiated disputes), informal (attorney’s representation is not mandatory), empowering (the parties of the dispute take the driver’s seat in deciding the destiny of their dispute), confidential and without prejudice, is an opportunity and not a challenge, and makes the “unpalatable palatable…”

It is hoped that the process would gain even more impetus through the promotion of mediation by mediation service providers and continued professional trainings.