Alternative Dispute Resolution (ADR) offers a way for commercial disputes to be resolved without the need for costly litigation. A common type of ADR is mediation.

Mediation involves an independent trained mediator who facilitates communication between the two parties having the dispute, with the aim of achieving a settlement or resolution.

What is the procedure?

Once the parties in dispute have agreed to a mediation process, an independent mediator will be appointed, by a mediation organisation such as CDRL or the parties can collectively agree to appoint independently or from a panel.

The mediator will discuss the issues and try to help the parties reach an agreement but will not offer their own opinions or assessment. In commercial disputes, lawyers may advise their clients during the mediation process.

A successful mediation may result in a settlement or a conclusion of the dispute. Any agreement can then be put into writing to become legally binding. It is important to note that the mediation process is entirely voluntary; a successful outcome depends on a mutual agreement and either party is free to walk away at any stage.

A mediator does not need to undergo any specific training, but some do have legal experience which can be helpful in certain disputes. The job of a mediator is primarily to facilitate communication between the parties having a dispute and steer them towards an agreement. CDRL mediators are experts in their field of which they facilitate discussion on but if preferred parties can elect to have a mediator with no background or expertise on the subject in dispute, which can sometimes help remove the limitations or constraints encountered within that industry, ensuring the mediator thinks outside the box to achieve a successful resolution or compromise that the parties can live with.

If an agreement is reached during the course of mediation, in order for it to be legally binding it must be set out in writing as a contract.

Arbitration is a more formal type of ADR, with a tribunal process and a decision being made by the arbitrator. Mediation and conciliation are less formal procedures and focus on the facilitation of communication with a view to resolving a dispute; conciliation involves evaluative methods and recommendations whereas mediators tend not to make any proposals for settlement.

Mediation is particularly useful for resolving disputes where parties are on speaking terms. It can also help out with business disputes where the two sides are willing to use ADR – particularly when cross-border issues are at stake (i.e. which would otherwise require determination of jurisdiction etc).