Mediation in context — overviewAdvantages and disadvantages of mediation

Mediation is the best known and most popular form of ADR. CEDR defines it as:

'a flexible process conducted confidentially in which a neutral person actively assists parties in working towards a negotiated agreement of a dispute or difference, with the parties in ultimate control of the decision to settle and the terms of resolution.'

Advantages of mediation over litigation/arbitration can include; lower costs, speed of resolution, flexibility, confidentiality, the voluntary nature of the process and the level of client involvement.

Disadvantages include; inability to secure an urgent remedy, lack of legal enforceability (depending on how the settlement is documented), the lack of a legal precedent or early disclosure of strengths and weaknesses and higher costs overall if no resolution.

Differences between mediation and other types of DR

There are a number of differences between mediation and other forms of dispute resolution, such as litigation and arbitration, for example:

• privacy/confidentiality - mediation is confidential

• procedure - mediation is informal/flexible

• fees - a mediator's fees are paid by the parties

• costs - the cost of a mediation is relatively low compared to a full trial

• powers of the presiding mediator, judge, tribunal or expert

• enforcement - a mediation is not easily enforceable unless there is provision in the contract or the parties enter into a Tomlin order

• right of appeal - a mediation is not subject to a right of appeal

Mediation Directive

Practitioners should be aware that there is an EU Directive on mediation. The aim of the directive, as set out in article 1, is to facilitate access to alternative dispute resolution and promote the amicable settlement of disputes by encouraging the use of mediation and ensuring a balanced relationship between mediation and judicial proceedings. Member States are required to enact national legislation to comply with the Directive before 21 May 2011. Denmark has opted out of the Directive and all the other Member States are at different stages of the process in implementing the Directive; four of the Member States have completed implementation.

England Wales have made progress in their action to implement the Directive with the introduction of a new Section III in CPR 78 (CPR 78.23-78.28) which deals with the enforceability of mediation settlement agreements and protecting the use of mediation evidence. It has yet to introduce provision to protect limitation defences from being prejudiced during the currency of a mediation process. Scotland has introduced a statutory instrument protecting the confidentiality of mediation evidence and protecting limitation and prescription defences. The new rules in both England and Wales and Scotland will take effect as from 6 April 2011.