Why mediate? What stops businesses from mediating disputes? These were some of the questions posed to an expert panel at the ICC Mediation Rules Launch last week.
The most obvious reason to mediate is because it is efficient. Over 74% of matters filed with the ICC ADR program reach settlement once a mediator has been engaged. Matters are generally resolved within 4 months of the mediator receiving the file, and on average, the cost of mediation is less than 1% of the amount in dispute.
So what is stopping businesses from choosing mediation? Delcy thinks the following misconceptions may play a role:
Mediation is only for “small disputes”
Amicable dispute resolution works for large, small, complex, and simple disputes. The ICC’s mediation program manages disputes ranging from below US$ 20 000 to well above US$ 500 million.
There is no place in mediation for lawyers
Mediation offers the flexibility for parties to be represented by as many (or as few) lawyers as are necessary. Ideally the lawyers will support the parties to tell their story in their own words, and to interact with the other parties to the dispute; however, legal advice is essential to forging settlements that are workable, durable, and satisfying.
Arbitration is the only ADR process available
ADR (short for amicable dispute resolution) processes are as diverse as parties and dispute.
The three most popular processes are Arbitration, Conciliation and Mediation (learn about the differences here); however, with an open, creative outlook, they can be combined and applied in whichever ways suit the parties.
Some parties prefer to set aside one whole day for mediation; others prefer a series of half days or shorter meetings. Some parties decide to mediate first and then, if no settlement is reached, have the facilitator make a binding decision (mediation-arbitration). Some disputes require a determination by an expert on a specific issue – such as the value of property – after which mediation can occur (conciliation-arbitration).
ADR is voluntary and amicable; it need not be constrictive or limiting.
There is no mediation clause in the commercial agreement in dispute
Just because the agreement does not specifically state the parties may or will attend mediation does not mean they are forbidden from doing so.
So long as all parties consent, the dispute can be resolved using any of the processes discussed above.
Mediation means less income for lawyers
There is a false perception that resolving matters through mediation means lower fees for lawyers when compared to arbitration or court trials. In fact when lawyers make good use of ADR processes, referral rates go up and clients keep coming back. Why? Because clients like mediation. They prefer to over any other dispute resolution processes (source: Sacramento News)