Mediation is an alternative form of dispute resolution where an independent third party (called a mediator) facilitates a settlement between the parties.
The process is voluntary meaning that it requires the consent and co-operation of both parties to be used.
High Court Rule 41A requires litigants to consider mediation whenever a new action or application is instituted. The introduction of Rule 41A recognises that many lawsuits end up settling before trial and that early mediation could save both parties substantial legal costs and alleviate the burden on the judicial system.
Mediation is different from litigation and arbitration in that the mediator guides the parties towards a resolution of their dispute. The mediator does not have the authority to make any binding judgments, awards or rulings, nor can he force any of the parties to agree to a settlement. While this may seem like a weakness, the reality is that many disputes are caused by emotion, misunderstandings, conflicting perspectives or unfounded fears. A skilled mediator will help the parties look at their dispute from a different perspective or will proactively help them arrive at a win-win solution or a reasonable compromise.
When used correctly, the parties will usually give due consideration to their BATNA (best alternative to a negotiated settlement) and WATNA (worst alternative to a negotiated settlement) and arrive at a meaningful and lasting solution that save costs, removes uncertainty and allow them to avoid the potentially devastating consequences of losing a lawsuit with costs.