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Mediation is an attractive dispute resolution mechanism, here’s why

14 May 2019

If executed using the correct approach, techniques and procedure, mediation can result in a high rate of settlement between the parties, save each side a lot of costs and time, but most importantly, achieve an outcome to the satisfaction of both disputing parties, as highlighted by Brand, Steadman and Todd in their book Commercial Mediation, a user’s guide.

It is possible to resolve a R1 million or even a billion-rand dispute, while saving time and energy, without incurring excessive legal costs. It is even possible to retain a beneficial commercial relationship with the counterparty.

Successful mediation requires a well-educated, knowledgeable and trained driver – the mediator. To achieve a good outcome from mediation, the knowledge of mediation techniques and procedures and how they are applied by the particular mediator will play a crucial role.

Commercial Mediation refers to a South Gauteng High Court matter, MB v NB, which inter alia recognised that:

Mediation can produce remarkable results in the most unpropitious of circumstances, especially when conducted by one of the several hundred people in this country who have been trained in the process.

A strong advantage of mediation is that it can save costs, compared to other dispute resolution procedures contained in standard form construction contracts like adjudication, arbitration or court litigation.

Resolution of a dispute can be achieved in a shorter time period. It is designed and envisaged to be a speedy process compared to other available dispute procedures.

With the mediator aiming to assist and encourage the parties to create and seek resolutive options, the parties can be moved to address their respective interests and needs, including reputation management, which is scarce at best in typical adversarial litigation proceedings.

Mediation can protect business relationships and minimise deterioration between parties. It can even have the effect of strengthening and growing existing relationships over in the long term.

The effective implementation of a favourable settlement outcome is another attractive advantage of mediation. This can easily be achieved when the process is steered by an experienced and well-trained mediator. In addition to that, both disputing parties will need to display a willingness and openness to seek a settlement or resolution. After all, it takes two to tango, as the saying goes.

Another important benefit is that all parties involved, can be bound by strict confidentiality obligations, which would create a safe environment and encourage the parties to make full and honest disclosures.

All in all, mediation is an attractive dispute resolution mechanism when well applied. I conclude with a quote from Commercial Mediation which aptly sums it up:

“The success of the process lies in its very nature. Unlike settlement negotiations between legal advisors, in themselves frequently fruitful, the process is conducted by an independent expert who can, under conditions of the strictest confidentiality, isolate underlying interest, use the information to identify common ground and, by drawing on his or her own legal and other knowledge, sensitively encourage an evaluation of the prospects of success in the litigation and an appreciation of the costs and practical consequences of continued litigation, particularly if the case is a loser.
Author: Barry Herholdt, Senior Associate: MDA Construction and Technology Attorneys