Why mediation is a good choice

Litigation between parties can be a very time consuming and expensive exercise. It often happens, especially in the High Courts that parties have to wait a long time before their matter is finally heard and resolved. Parties also often have to deal with various variables, out of their control, before obtaining the required relief. This is where mediation can be a quicker and more cost effective solution.

Mediation is the process where an independent third party assists two (or more) parties to reach an agreement on a dispute that has arisen between them. The process is entirely confidential and voluntary. It is important to note that the role of a mediator is always to remain independent and objective and only to assist the parties to reach an agreement. A mediator does not act in an advisory role and does not make a finding or grant a judgment at the end of the mediation but merely act as an assistant to both parties to reach an agreement. Where parties are already represented by attorneys, they are encouraged to let their attorneys accompany them to the mediation proceedings. They can then consult their attorneys for advice during the mediation process.

In mediation proceedings, it is the parties who control the outcome and not a presiding official. This is in contrast with a litigation driven process where the parties are, at the end, subjected to the decision of a presiding official who grants a judgment in favour of one of the parties and against the other. There is no risk of being unsuccessful when mediating due to the fact that the parties are not subjected to a decision by the mediator or the mediator’s opinion or interpretation of the facts and evidence. As stated earlier, the mediation process is conducted confidentially and strictly on a “no-prejudice” basis. It is also completely voluntary, hence the reason why the costs of the mediation is shared between the parties on an equal basis, unless they agree otherwise.

Mediation, however, is a great tool to use, when the parties are litigating against each other, to limit the issues in dispute and thereby reducing the length, and therefore the costs, of the trial. This is especially important when one takes cognisance of the strict requirements of the practice directives of the Pretoria High Court pertaining to Rule 37 when applying for a trial date. In terms of Rule 37(6)(g), the pre-trial minutes must, inter alia, include any admissions made by each party and whether any issue has been referred for mediation. Rule 37(9)(a) furthermore provides that the court shall at the hearing of the matter consider whether or not it is appropriate to make a special order as to costs against a party or his attorney inter alia because he or his attorney failed to promote the effective disposal of the litigation. There is thus clearly a duty on parties engaged in litigation to limit the points in issue where possible.

The benefits of mediation (and duty of attorneys to advise their clients thereof) was clearly described in the so-called Brownlee judgment (MB v NB 2010 (3) SA 220 (GSJ)). The aforesaid judgment was delivered in a case which concerned a dispute between parties to a divorce. The court in giving judgment remarked and found inter alia as follows:

• In a pre-trail conference the parties must consider whether the dispute should be referred for possible settlement by mediation;
• The legal representatives in the present matter had no hesitation to answer this aspect in the negative;
• The court asked the plaintiff during her testimony whether her legal advisers advised her on possible mediation;
• She answered this question in the negative and went on to explain that “mediation would have served no purpose”;
• In considering the Plaintiff’s above answer, the honourable judge had this to say in his judgment:“Though this was her response to a question put by me, it is ultimately a matter on which, not being an expert, she can entertain no informed belief. 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. The success of the process lies in its very nature. Unlike settlement negotiations between legal advisers, in themselves frequently fruitful, the process is conducted by an independent expert who can, under conditions of the strictest confidentiality, isolate underlying interests, 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.”
• Acrimonious emotions between lawyers on opposite sides can lead to an over-identification with a client’s cause and an attitude of win-at-all-costs. This can act as a complete barrier to settlement;
• The advice lawyers provide to their clients is “profoundly influential” and “shapes the demands being made and strategies used to achieve them.”; and
• I am given to understand that in England …. mediation has profoundly improved the process of dispute- resolution. Parties resolve their problems so much more cheaply as a result, and the burden on the court rolls has been considerably lightened. Informed estimates put the success rate of mediation at between 80 and 90 percent. For present purposes it is unnecessary, indeed undesirable, for me to say more about the general imperatives that favour mediation as a means of settling cases.”

Mediation can also assist parties to a commercial dispute, and is not limited to family law. It can, for example, be a very good tool for insurance companies to reach settlement agreements in claims for damages or to reduce trial costs by limiting the issues in dispute and only proceed with the issues which cannot be settled. It can also be a tool which assists parties to business transactions to reach an agreement in respect of future ventures for instance mergers or joint venture negotiations and service level agreements.

The court in the Brownlee-judgment also referred to, and quoted the following (in certain aspects quite humorous), passage from, the English case of Egan v Motor Services (Bath) Ltd [2007] EWCA Civ 1002 where the dispute between the parties was of a commercial nature:

‘What I have found profoundly unsatisfactory, and made my views clear in the course of argument, is the fact that the parties have between them spent in the region of £100,000 arguing over a claim which is worth about £6,000. In the florid language of the argument, I regarded them, one or other, if not both, of them, as completely cuckoo to have engaged in such expensive litigation with so little at stake. At the time of writing this judgment I rightly do not know whether any, or if so, what, attempts have been made to settle this case and the remarks that follow are of general application. I raise that matter again in this judgment to make the point, as firmly as I can, that this is a paradigm case which, if it could not have been settled by the parties themselves, customer and dealer, then it behoved both solicitors to take the firmest grip on the case from the first moment of instruction. That, I appreciate, may not always be easy, but perhaps a copy of this judgment can, at the first meeting, be handed to the client, bristling with righteous indignation, in this case the customer who has paid a small fortune for a motor car which does not meet his satisfaction, and the dealer anxious to preserve the reputation of his prestige product. This case cries out for mediation, should be the advice given to both the claimant and the defendant. Why? Because it is perfectly obvious what can happen. Feelings are running high, early positions are taken, positions become entrenched, the litigation bandwagon will roll on, experts are inevitably involved, and, before one knows it, there will be two/three day trial and even, heaven help them, an appeal. It is on the cards a wholly disproportionate sum, £100,000, will be to fight over a tiny claim, £6,000. And what benefit can mediation bring? It brings an air of reality to negotiations that, I accept, may well have taken place in this case, though, for obvious reasons, we have not sought to enquire further into that at this stage. Mediation can do more for the parties than negotiation. In this case the sheer commercial folly could have been amply demonstrated to both parties sitting at the same table but hearing it come from somebody who is independent. At the time this dispute crystallised, the car was practically brand new. It would not have been vastly different from any demonstration car. The commercial possibilities are endless for finding an acceptable solution which would enable the parties to emerge, one with some satisfaction, perhaps a replacement vehicle and the other with its and Audi’s good name intact and probably enhanced, but perhaps with each of them just a little less wealthy. The cost of such a mediation would be paltry by comparison with the costs that would mount from the moment of the issue of the claim. In so many cases, and this is just another example of one, the best time to mediate is before the litigation begins. It is not a sign of weakness to suggest it. It is the hallmark of commonsense. Mediation is a perfectly proper adjunct to litigation. The skills are now well developed. The results are astonishingly good. Try it more often.’

To summarise, mediation is an excellent way of resolving disputes between parties. It can greatly reduce the costs and risks involved with settling disputes in that the parties are in control of the solution obtained. They are not subjected to the opinions and interpretations of third parties, but rather assisted by an objective person to obtain a solution.

Author:

Andries Stander – 17 February 2015