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If you've ever thought there has to be a better way to settle a dispute than by spending thousands of pounds on legal fees, months of recrimination, anguish and frustration, and days in court, mediation could be what you seek.

What is mediation?

Quite simply it's a way of resolving disputes without the need to go to court. Sounds fantastic and very simple, and in essence it is. If both parties in a dispute agree to undergo mediation, then a trained mediator, who is an impartial third party, guides the parties to a settlement on which they both agree. The mediator does not impose a decision or attempt to judge the merits of the case.

The difficult bit about mediation is actually getting both parties to agree that mediation is a good idea in the first place. Most disputes become very personal and our legal system is geared to a combative approach - finding fault, picking holes, showing blame or error. People are not inclined to settle. They want their day in court. They want to show the other party that they were in the wrong. These are all very natural thoughts, but they don't really help. Mediation looks at the common ground, the positive aspects and finds the best resolution for both parties.

How does it work?

Mediation requires the consent of all the parties concerned, but if one or more have not indicated willingness, it is possible to approach a mediation organisation or individual mediator to help to negotiate that initial agreement. Once the concept has been accepted, there remains the question of the choice of mediator, but this is generally best left to the mediation organisation to recommend a trained mediator with the relevant experience.

At an agreed time and venue the mediator listens, allows the parties to express their feelings, explores underlying issues, challenging and encouraging where necessary. The mediator spends time with each party, both in joint session and in private meetings (sometimes called 'caucus') helping each party to focus on their interests, and the interests of the other parties, rather than their rights. The mediator will explore the early part of the relationship, drawing out what it was that caused them to work together initially, and what caused the breakdown in trust or confidence between the parties. The mediator will help the parties to examine areas of possible agreement as well as disagreement. The mediator will also help each party to examine their own resolve, testing out their belief in the true strength of their own case and their resolve to fight rather than settle. Some of this process can be difficult if not painful for some parties: for this reason, the mediator will never test parties or try to expose weaknesses in a case in joint session, only ever in private.

All the discussions are completely confidential - the mediator will not repeat or imply to another party anything that one party has said unless or until the mediator has been given express permission to do so. This confidentiality allows the parties to trust the mediator so they can discuss openly all aspects of their case. Eventually, by spending time "shuttling" between the parties, the mediator can help the parties to understand their own and each other's positions in a way quite different to that of the traditional adversarial case and, hopefully, reach an agreement.

If no agreement is reached the parties are not in any way bound by what has been discussed. The agreement becomes binding once it has been drawn up and signed by the parties: if the agreement is not honoured it may be enforced contractually or preferably by a further mediation. Most agreements are honoured though, precisely because the parties have worked hard to achieve a settlement, and upon terms that were always within their control, unlike an imposed court decision.

Why mediate?

There are plenty of very good reasons, such as:

  • The outcome of mediation is always within the control of the parties - with the help of the mediator they decide for themselves upon a settlement they can live with.
  • Parties in mediation avoid the uncertainty and dissatisfaction often experienced in court or at arbitration where they have little choice but to accept the judgment made, which may turn out not to please either party.
  • Mediation resolves disputes fast, usually within a day.
  • Mediation is significantly less expensive than litigation - because months or years of litigation are avoided, as are the consequent fees of lawyers and experts. Parties may of course have legal or other advisors present during the mediation if they wish.
  • Everything said at the mediation is entirely confidential to the parties (unless specifically agreed otherwise) - unlike the potential publicity of court proceedings.
  • The mediation process is 'without prejudice', so that on the rare occasion that a settlement is not reached, litigation may continue without the parties needing to worry about having 'given away' anything that the other could use in court.
  • Mediation works in some 90% of commercial disputes - a settlement is usually reached on the day, or within a few days of the mediation meeting.
  • Mediation is voluntary; any party may withdraw at any time.
  • Nothing is binding upon any party until an agreed settlement is reached. Once a settlement has been drawn up and signed it becomes an enforceable contract between the parties.
  • The mediation is arranged at a venue convenient to the parties, who each have their own room as well as a separate room for joint meetings. The mediator listens to everyone's point of view, talks to the parties privately and together, guiding them towards a settlement.
  • The mediation can take place at any time - it is not limited to ordinary working days or hours. If it suits the parties to negotiate over a weekend, then that's when it happens.

A step-by-step guide to the mediation process

Mediation is an informal meeting, which follows a standard plan. Knowing these stages often makes participants more relaxed about the process. When you have arranged mediation, these are the stages that you should expect:

Stage One: An Individual meeting

You will first be introduced to your mediator to discuss your concerns and learn more about the mediation. This meeting usually lasts sixty to ninety minutes and is mostly spent discussing your issues of the case. If at the end of this you think you want to meet the other party, then the mediator will tell them.

Stage Two: Meeting the other party

The mediators will contact the other party and request that they take part in the mediation. If they don’t want to, then you should discuss alternatives. The other party will talk to the mediators about their own thoughts and concerns, while receiving information about the process. The mediators will not tell the other party any of this information and will act in a completely objective manner. If both parties are willing then a joint meeting will be planned.

Step Three: Joint mediation

The parties will meet the each other beforehand to ensure that they both enter the room at the same time. The meeting will be a frank discussion of the relevant topics and barriers to agreement, and the mediator will generally lead the conversation. How the meeting will operate will be explained. It may seem that proceedings are laborious at the beginning, but the mediation will quickly pick up as time passes. You may wish for a private meeting with the mediators during the mediation. When this occurs both mediators will go with you to another room, while the other party will remain. Anything said in private will remain private, unless you say so.

Stage Four: Conclusion

The mediators will take down notes during the mediation which you may ask to view at any time, and they will be disposed of at the end of the session.The mediators will endeavor to aid the two parties in drawing up an agreement to outline the main agreed areas, which will needed to be signed and dated by the parties and the mediators. After this has been accomplished the mediators will remind you that anything said or done during the mediation cannot be discussed outside the meetings, unless both parties wish to talk about this to the manager.

Stage Five: Post Mediation

The mediators will talk to both sides after three months to see how things are going.

Forms of alternative dispute resolution

Mediation is but one manifestation of the phenomenon known as alternative dispute resolution (ADR), a variety of approaches designed to prevent disputes from escalating to the point of litigation. ADR in its many forms can help sort out your problem and even aid in a compensation claim. It is particularly useful when it comes to consumer disputes, where there are many different types of ADR you can use.

There are several schemes set up to deal with consumer disputes; arbitration, mediation, conciliation and Ombudsman schemes. You should make sure the supplier of these schemes is a member of the trade association and that they offer arbitration and conciliation services. Some of the schemes may get you to fill in the supplier’s complaints form before the resolution can begin; this may come with a fee that is totally refundable if your claim is successful.

Most schemes are legally binding which means that you will not be able to take the supplier to court once the issue has been resolved. If your claim is under £5,000 you may wish to evaluate using an ADR and other small claims options to discover which direction would suit you the best.

  • Arbitration scheme

Arbitration ensures that both parties will have to accept and agree to the arbitrator’s legally binding decision. This means that you won’t be able to take the supplier to court. If the supplier doesn’t pay you can still take them to court but you may have to pay for these costs. The arbitrator will make a judgement based on the written information that you and the supplier provide.

  • Mediation scheme

The mediator’s aim is to resolve any disputes and to reach a reasonable agreement. Acting as a third party, a mediator will be able to negotiate with both parties in order to reach a reasonable settlement. It will be worth looking for a mediator who specialises or has a good understanding of shareholder disputes and be able to work well between the parties involved. The more skilled your mediator the more likely you will be able to reach the best outcome. Mediation can improve the communication between the parties in dispute and progress towards a concrete solution.

They will even meet the supplier if you don’t want to have contact with them personally. Both parties will have to sign a mediation agreement and supply the mediator with evidence and information. The mediator will then be able to advise you on the success of the case and attempt to reach an agreement. Once an agreement is reached you may have to attend a meeting with the supplier to sort out the legally binding settlement.

  • Conciliation scheme

The conciliation is the starting point of the arbitration scheme, when a conciliator will be appointed to you from the trade association. This process will not cost you a penny. You and the supplier will have to provide relevant written information about the situation. The conciliator will then advise you towards the most effective resolution. This is merely advice so it wont disqualify you from going to court, if you do not agree with their resolution then you will able to move onto the arbitration scheme or advance towards suing.

  • Ombudsman scheme

The Financial Ombudsman Service (FOS) is a free solution provided by many companies and businesses. If you would like to receive advice from here you will need to fill in the supplier’s complaints assessment. Again you will need to provide written information and evidence about your claim. The Ombudsman will then suggest a ruling that the supplier will often agree to. This is not legally binding and you can still take the supplier to court if need be. The only problem in this situation is that the court will also take note of the Ombudsman's suggested ruling when assessing your claim.

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