Mediation

The following excerpts are taken from the Arbitrators' and Mediators' Institute of New Zealand Inc " Guide to Mediation.

WHAT IS MEDIATION?

Mediation is a consensual process in which an independent and impartial person, the mediator, works with disputing parties to help them explore and, if appropriate, reach a mutually acceptable resolution of some or all of the issues in dispute. The mediator has no decision-making authority regarding the outcome - the mediator therefore has no power to impose a settlement, and should not seek to do so.

Mediation differs significantly from arbitration and litigation. In mediation, neither the parties nor the mediator are limited by what is legally “right” or rules of evidence, and the parties are free to accept or reject terms of settlement suggested during the mediation. By contrast, arbitrators and courts are obliged to decide the particular dispute referred to them according to law, and cannot find a solution elsewhere - they are bound to apply the relevant substantive law and rules of evidence and procedure, and the parties are legally bound by an arbitrator's award or a judgment of the court.

Mediation is especially appropriate where: 

• Relationships between the parties are important and continuing 

• Bad communication and resultant misunderstandings are involved 

• Confidentiality is important 

• The parties need the opportunity to talk openly and frankly 

• Technical or legal uncertainties are involved and warrant discussion 

• The parties wish to determine their own outcome 

• The parties wish to minimise legal costs and save time

  
  

Mediation may involve consideration of the parties’ legal obligations. The emphasis, however, is on minimising the need for formal legal procedures, by involving the parties and their advisers as joint problem-solvers to develop acceptable outcomes and enhance their long-term relationships.

MEDIATION PROCESS

The mediation process is governed by agreement between the parties themselves or by the mediator, taking account of the general circumstances of the dispute, the relationship between the parties, the parties' wishes and the need for a speedy and economical settlement. There may be two or more parties.

A variety of procedures are available and any one of them or a combination of several may be adopted. These include: 

• a preliminary meeting to discuss whether mediation would be helpful in the circumstances and, if so, to agree procedures 

• written submissions on the key issues and facts, exchanged prior to the mediation meeting 

• oral presentations in the presence of both parties at the mediation meeting 

• separate meetings between the mediator and each party (ie private caucus) 

• The mediator may call all the parties together to facilitate agreement where there are many stakeholders 

• the mediator acting as a conduit for the exchange of views and/or proposals

The aim of these procedures is to help the parties reach an agreement which is acceptable to them.

AGREEMENT TO MEDIATE

In the event of a dispute arising between parties, the aggrieved party generally notifies the other party, briefly setting out the nature of the dispute and requesting that it be referred to mediation.

If the other party agrees, a written agreement between the parties and the mediator can then refer this specific dispute to mediation.

A mediator can help the parties to agree on mediation proposals and procedures, prior to appointment of a mediator for the dispute itself. As an independent party coming into a dispute situation, the mediator should be indemnified against any legal liability.

SELECTION OF THE MEDIATOR

The mediator should be chosen by agreement between the parties. Where the parties are unable to agree upon a mediator they may request AMINZ to appoint one. AMINZ recommends the appointment of only those who are professionally trained and qualified as mediators.

MEDIATION MEETINGS

Arrangements for the date, place and time of mediation meetings are for the parties and mediator to agree amongst themselves.

There is no set procedure for conducting mediation meetings. Rather, it is important to adopt a flexible approach. The mediator should have wide freedom to develop and implement a process appropriate to the specific circumstances of the dispute and the wishes of the parties. The process should be informal, but still one that is understood and preferably agreed to by the parties.

Face-to-face meetings of the parties are usual. They help to defuse personal antagonism and promote the communication and understanding toward achieving settlement. In cetain situations there are pre-mediation meetings and sometimes a series of meetings may be needed.

There may be joint sessions with the mediator and all the parties, and separate sessions between the mediator and one or more of the parties. The objective is to narrow and resolve the issues that separate the parties.

The mediator facilitates the joint meetings, at which each party should be present and be ready to make binding agreements. In the case of a corporate party, there should be a management-level representative. The management representative should have authority to agree to a settlement, although this may not always be possible if the representative has to refer back to a governing body.

ROLE OF THE MEDIATOR

The mediator’s role is to guide the process, so that the issues are defined, relevant information is produced and options are explored without undue delay or legalistic procedures. A trained mediator may use a variety of techniques.

The mediator does not have the authority to impose a settlement on the parties, but will attempt to help them to resolve their dispute in a way which is acceptable to each of them. When a solution seems feasible to the mediator, but has not been seen by the parties, the mediator may gently point the way. A mediator may, in a caucus meeting, question the strengths and weaknesses of a party’s case as a way of encouraging them to reach settlement.

PRIVACY

Mediation meetings are private. The parties and/or their nominated representatives attend mediation meetings with the mediator. Other persons may attend only with the consent of all parties.

CONFIDENTIALITY

Mediation is intended to be a “without prejudice” process, which means it is confidential and with limited exception may not be referred to in any subsequent arbitration or court proceedings.

Documents or other evidence produced for the purpose of arbitration or litigation, which are produced at mediation will not be covered by mediation confidentiality. The confidentiality is targeted towards concessions made for the purposes of settlement.

MEDIATED AGREEMENT

So as to avoid future misunderstandings of the agreements reached in the mediation, it is crucial for a mediation to culminate in the parties signing a written agreement which sets out the outcome. Where the parties’ lawyers attend the mediation meetings, it may be preferable for them to take responsibility for this drafting from the outset.

Another possibility is that agreement reached in mediation is simply recorded as a memorandum of understanding or as heads of agreement, and the parties sign these to indicate that they accurately record the agreements reached. Their signatures may not be intended to be legally binding, and if this is so it should be expressly stated. In order to have a formal agreement, they instruct their lawyers to draft a binding agreement incorporating the terms of the memorandum. Once signed, this will bind the parties.

TERMINATION OF MEDIATION

The mediation process may be terminated: 

• when full or partial resolution of the issues has been reached 

• at the suggestion of the mediator, for whatever reason, or 

• if a party advises that it is withdrawing from the mediation proceedings (parties cannot be forced to continue with a mediation against their will).

ENFORCEMENT OF A MEDIATED AGREEMENT

An agreement reached in mediation is as enforceable as it would be if it had been made without the help of a mediator. If the agreement is a contract, it will be subject to the rules of contract.

EXPENSES AND FEES

Mediators generally charge fees on an hourly basis. It is usual for the parties to equally share the costs of the mediator but parties are individually liable for the full fee of the mediator.

The mediator and the parties should agree on a fee before the appointment of the mediator is confirmed.

The parties generally pay their own legal expenses for the mediation.