The efficacy of Mediation – Is it worth it?

Our team at PGC Legal has extensive experience assisting our clients with the difficulties and complexities of the litigation process. No client wants to engage in protracted litigation – and who could blame them? One of the common mechanisms to avoid protracted litigation is mediation.

Mediation is a form of alternative dispute resolution. It is a process by which parties involved in Court proceedings come together and attempt to resolve the dispute by agreement. Mediation is conducted with the assistance of a mediator, an independent third-party trained to conduct mediations, who attempts to bring the parties together and facilitate settlement discussions.

When mediation is suggested, one of the most common questions we get asked is whether mediation is worthwhile. This article discusses how parties get to a mediation, who usually pays for it andthe advantages of coming together with the other parties in a mediation setting.

In our next article, we will discuss the nuts-and-bolts of mediation: how it works, what you can expect and what you can do as a mediation participant to increase your chance of obtaining a successful outcome.

When should a mediation occur?

It is often useful to have a mediation as early as possible in the litigation process, because it offers the parties an opportunity to engage in discussions before incurring extensive legal costs in litigation. If the matter doesn’t resolve entirely, it is common that the scope of the dispute (that is, the things you are arguing about) can be reduced.

In most circumstances, by the time parties have entered the Court process, they have already attempted to engage in settlement discussions through a ‘Pre-Action Meeting’ under the Uniform Civil Rules 2020.[1]

Who organises a mediation?

Anyone involved in a dispute can propose a mediation under the Uniform Civil Rules (being the rules that govern disputes in the state Courts in South Australia), the parties can organise a mediation or a Court may order a mediation to occur.[2] Often, parties organise a mediation without the need for a Court order – but this is not always the case. The Court may appoint a mediator, however parties usually choose the mediator who will conduct the mediation.

When a mediator is agreed, the next question is, who pays the costs of the mediator? Under Uniform Civil Rule 131.3 (7), both parties are liable to pay for the mediator fees. In practice, it often occurs that the parties agree on an even split of the mediator’s fees.

Is mediation worth it?

The Uniform Civil Rules place a strong emphasis on bringing parties together early to try to resolve their dispute.[3]  This is because very few matters proceed to trial. For example, in the Supreme Court of South Australia, 773 cases were lodged in the 2020/21 financial year. Of those cases, only 10 proceeded to trial. This means that only 1.3% of cases lodged in the Supreme Court are resolved by a trial.

Because most matters resolve without a trial, it is often beneficial for mediation to occur sooner rather than later to avoid incurring legal fees unnecessarily.

So, is mediation worth it? In our experience, there are five main reasons why we recommend mediation to our clients in appropriate matters. Those reasons are:

  1. Increased efficiency – in terms of time and money
  2. Greater control in the outcome
  3. Narrowing of issues
  4. Accessibility
  5. Informality

Increased efficiency – in terms of time and money
Litigation is not only costly but is also a drain on the parties’ time and energy. Mediation offers a way to mitigate this. The costs incurred in appointing a mediator and preparing for mediation are far less than preparing a matter for trial.

Similarly, if your dispute does not settle at mediation, there is a greater chance that parties will narrow the issues in the dispute, paving a way forward which will assist in an overall reduction in legal fees in the long term.

Greater control in the outcome
When a dispute goes to trial, a Judge may make a favourable judgment or an unfavourable judgment. Either way, the decision is not in your hands.

Mediation offers an opportunity to control how your dispute is resolved – the decision to settle your dispute is in the parties’ hands, not the Judges. You can state your position, have a voice in settlement negotiations, and put forward a position to resolve the dispute. Mediation also offers the opportunity to enter settlement agreements that a Court may not be able to order. For example:

  • In estate disputes, part of the settlement agreement may include gifts of specific property, such as family heirlooms;
  • In defamation disputes, part of the settlement agreement may include an apology to the defamed party;
  • In employment disputes, part of the settlement agreement may be relocating to a different worksite or office.

The discussions that occur during a mediation take place on a ‘without prejudice’ basis.[4] This means that those discussions cannot be relied upon as evidence at a trial. Parties can speak freely without being concerned that those discussions will be used against them during legal proceedings.

Narrowing of issues
The reality is that not all matters settle at mediation. However, the goals of mediation extend beyond resolving all disputes. It provides opportunity to parties to narrow the issues in dispute. It provides a foundation and framework for potential future discussions to take place. In matters with multiple disputes, mediation allows parties to determine what issues are more important than others and, in some cases, can mean that, once parties have time to reflect on the mediation, a settlement will be imminent through a later exchange between parties.

Accessibility
Parties can elect to engage in mediation at any point during litigation. There are no direct barriers for a party to suggest mediation, or to seek an Order from a Court to mediate. Parties have the ability to seek a mediation to negotiate a settlement as early as possible and do not have to satisfy certain pre-conditions.

Informality
Mediation is an informal and flexible process. That does not mean that mediation is not structured. For example, there are certain documents that should be exchanged, including those which set out a parties’ position (“position papers”) prior to a mediation. Because of its informality, mediation provides a forum that allows parties to express their positions openly. This informal approach can facilitate settlement agreements that enable all parties to achieve an acceptable outcome.

Can we assist you?

PGC Legal has substantial experience in assisting clients throughout the mediation process, including compiling position papers, opening statements, advice on offers and counter-offers and how to navigate settlement discussions.

If you are currently involved in a dispute, whether it is in Court or not, and require assistance in organising a mediation, PGC Legal can assist you through the entire process. Contact our offices for further information on how we can help you navigate the mediation process.

[1] For more information on ‘Pre-Action Meeting’ and the Pre-Action Protocols, our article ‘Can I sue you?’ explains what must occur before a party can issue legal proceedings.
[2] See Uniform Civil Rule 131.3.
[3] See Uniform Civil Rule 3.1 – Overarching obligations.
[4] For more information on what is meant by without prejudice, our article ‘Settlement Communications’ explains the types of communications which occur during settlement.