One of the main selling points of mediation is that it is cost effective, others include; confidentiality; discretionary; the parties control the outcome; quickness of process; opportunities to preserve ongoing relationships and the resolution can include wider interests. Ultimately mediation enables all the parties the opportunity to discuss their issues, clear-up misunderstanding, and find areas of agreement in a way that would never be possible in litigation.

When to mediate can either be a timing question between the parties or decided by the court or tribunal. Mediation is very much an integral stage with court litigation and one party’s refusal to participate can seriously prejudice any cost recoveries. The court may take a dim view of any party
making no effort to reach an out-of-court resolution and purposely wasting the opportunity to reach a settlement before the commencement of the court hearing leading to a cost sanction.

Mediation is an available option at any time where there is a dispute between one or more parties however it would be premature until an investigation into the facts and consideration into the merits has been undertaken. To seek an early resolution without due process may indicate a weak case for one party and an aggressive response by the other party.

Skilled and experienced practitioners should be able to gather information and make a balanced assessment on the merits before costs and fees are an unnecessary expenditure and unlikelihood of recovery become a high risk issue.

It is not unreasonable to estimate that about 80% of available evidence in a dispute will be obtained for about 20% of the total estimated litigation costs which will be incurred up to the day of a court or arbitration tribunal hearing. To incur those costs would be considered to be prudent even though the obtained information may indicate a weak case on liability.

After acquiring that amount of information a party can make an assessment on the merits. The remaining information may take the form of detailed witness statements and expert analysis of data, and seeking disclosure or information from the other party.

Having incurred 20% of potential total costs, both parties have decisions to make: is one party 100% liable so settlement should not require litigation?; is liability unclear – 50/50 or some other proportion; is the 80% future costs worth the additional information; can an amicable settlement be reached without incurring or limiting future cost?

The area of uncertainty is common ground for all disputes and the area where mediation is the most attractive option; to find a resolution and bring certainty in a controlled manner. The process is voluntary so both parties have to recognize the merit. A skilled mediator will be able to work between the parties at a very early stage of mediation to help assess the key issues and help the parties see the benefits without sharing information between the parties.

The area of uncertainty can be altogether diminished and with it litigation risk and additional costs.