The following article has been submitted by guest contributors Brian Finn and Paul Finn, Nationally Accredited Mediators and Members of JJL Mediators & Conciliators (www.johnjarndyceslist.com)

 

Happily, most commercial arrangements work as intended – and so they should. A few arrangements go badly wrong.  They’re either ripped up or addressed through drawn out litigation. One way or another, they’re costly and often not only in terms of money – attention is diverted to the dispute, rather than to running the business and there is also the inevitable stress of dealing with lawyers and courts.

What can you do when a contractual arrangement isn’t performing as expected? It might well be an arrangement you need to work properly rather than terminate.  Perhaps it’s not a big enough issue to call in the lawyers. Perhaps the other party is a key supplier or customer, or perhaps much bigger, with more financial resources.  None of that means you have to – or should – simply put up with the situation.

Mediation

In mediation, parties put their concerns directly to each other and, with the help of a mediator, try to reach a mutually acceptable resolution of their dispute.  It is a collaborative, well-proven process that is effective, quick and costs far less than going to court.  Even the Federal Court of Australia says, “Mediation offers many benefits over a trial by a judge.”

Mediation is direct, so it can be quick and relatively inexpensive – taking a couple of weeks or less and costing as little as $5,000 for each party. Where the parties reach an agreement, it is because they’re prepared to go forward together.  So, in a sense, there are no losers in mediation.

In contrast, litigation usually results in a loser and a winner. Sometimes there are two losers, if a previously valuable arrangement or relationship is lost.

How Mediation works

Mediation is a structured negotiation process in which an independent mediator helps the parties clarify their differences, identify and assess options and negotiate an agreement to resolve their dispute.

The process is designed to reach an outcome that is acceptable to both parties. It is not intended to determine any rights or wrongs and unlike court proceedings, it does not focus on legal issues and mediators don’t offer legal advice.

The process is entirely voluntary and the parties select the mediator of their choice and agree on the venue and timing for mediation. Costs are usually split equally between the parties.  In many cases the core mediation meeting can be completed in a single day.

The mediator will arrange an initial confidential discussion with each party. Following this, the mediator will arrange a joint meeting with the parties, with the understanding that those attending are familiar with the facts of the dispute and – importantly – have the authority to make a binding decision on any agreement reached.

The mediation begins with the mediator explaining the process before each party sets out the background of the matter and the issues they feel need to be discussed and resolved. In the most matters, the mediator’s role may be limited to ensuring the process is followed. Where the parties agree that more input might be useful, they can choose to use a process known as conciliation. This involves an expanded role for the mediator, who may then assist negotiations by asking questions, encouraging open discussion, offering different perspectives, expressing issues in alternative ways and suggesting potential solutions.

Agreements reached are documented and signed by the parties and the parties may opt to make the agreements legally binding.

What Mediation Costs

As a rough guide: $5,000-$7,500 split equally between the parties to cover the mediator’s preparation including a private introductory meeting with each party, plus a full day of mediation. Add to that any material out-of-pocket expenses and, of course, GST. Like many professional services, terms of the mediation including the mediator’s charges can be negotiated.

Next Steps

It might be a surprise to learn there are national principles for resolving disputes. They’re published by the Attorney General’s Department in “Your Guide to Dispute Resolution” which can be found on the Attorney General’s website at www.ag.gov.au. The Principles set out a straightforward, common sense approach. For example, self-responsibility is the first step; early resolution is good resolution; use Alternative Dispute Resolution (ADR) then the courts.

You can also find the current list of nationally accredited mediators through the Mediator Standards Board at www.msb.org.au/mediators.