The Civil Justice Reform, which encourages parties to consider in every case whether or not to use mediation in resolving dispute, will come into force on 2 April 2009. It is anticipated that following the introduction of the Civil Justice Reform, mediation will soon become an essential part of our legal system.

What is Mediation?

Mediation is a voluntary, non-binding private dispute resolution process in which a trained and impartial third party, a mediator, will be appointed to help the parties to identify and narrow down the issues in dispute, and ideally reach an amicable settlement. The mediator does not impose a decision on the parties. Instead, the mediator merely acts as a facilitator and advisor in helping the parties to discuss, understand and make attempts to end their disagreement in a private and constructive environment.

The Mediation Process

         Stage 1                          Stage 2                                                Stage 3

Mediation and Arbitration

In a nutshell, arbitration is another voluntary dispute resolution process in which a neutral arbitrator will be appointed to decide a case whereas a mediator merely acts as a facilitator and will not impose a decision on the parties.

The arbitrator’s decision i.e. an arbitration award, will be final and binding on the parties. The status of such award is very much like a court judgment and can only be challenged in very exceptional circumstances. Conversely, a Mediation Settlement is binding on the parties as a matter of contract only. A party could only sue upon it if the other party is in breach of its terms.

Advantages of Mediation

Experience has shown that mediation facilitates a high settlement rate and most people are satisfied with the outcome of mediation. The advantages of mediation are many and include the followings :-

Ø   Time-saving and Cost effective – some cases might conclude within a relatively short period of time. Not only will it help the parties to save time, it will also save costs for resolving the dispute by legal actions.

Ø   Facilitate communication and settlement – during the mediation process, the parties are free to suggest ways to resolve their dispute.  It encourages the parties to negotiate and settle on terms most favourable to them, which in some cases, might go beyond legal remedies that the Court is empowered to grant.

Ø   High degree of confidentiality – it is a fundamental principle that the mediation process shall be strictly confidential. All parties and the mediator shall sign and abide by an undertaking of confidentiality. Things said and documents disclosed in the mediation process shall not be used by or divulged to anyone for any purpose in any court proceedings.

Suitability for mediation

Mediation is suitable in many (but not every) cases. It is now generally considered that there are three categories of disputes which are not suitable for mediation, namely where :-

(1)  there is urgency and injunctive relief of some kind is required;

(2)  the parties wishes to create a legal precedent or clarify some aspect of the law; or

(3)  one of the parties has behaved with extreme bad faith and/or is engaged in delaying tactics.

In the premises, instituting proceedings in Court may be the only viable option available to the parties.