Court proceedings rely on a Judge to listen to the evidence and then make a judgment. Usually that judgment will result in one party “winning” and the losing party being ordered to pay a sum of money. At a mediation, unlike court proceedings, the parties can agree between themselves how to resolve the dispute. This is something a Judge is not be able to do.
So, for example, take a dispute involving a property developer instructing a specialist architect to design a cricket pitch. The work was undertaken by a specialist landscape contractor. Issues arose toward the end of the contract when it was discovered that the netting designed by the architect was not preventing the cricket balls from leaving the ground and thereby causing damage to neighbouring properties. The architect blamed the contractors for not placing the netting in the correct location. The property developers issued a claim in court against the architect for professional negligence and against the contractor for breach of contract. The contractor was struggling financially and the architect did not want a “black mark” against his professional indemnity insurance. If the court proceedings had continued, there was every chance that a successful claim against the contractor would not have been worth a candle as the contractor would have most likely slip into insolvency. The claim against the architect was not a guaranteed success. The matter proceeded to mediation and the dispute was resolved on the basis that the architect would work free of charge on the developer’s next project if the developer dropped their claim. This is the sort of resolution the parties can achieve in mediation. It is not something, however that a Court could order. The parties’ solution just required flexibility and a little thinking outside the box.
The benefits of trying mediation as a method of dispute resolution are now actively recognised by the Courts. Indeed, the Court may even penalise a party who has refused to participate in mediation even if that party is success in their case at trial. The risk is that a Court may not award the successful party all of their costs if it turns out that party unreasonably refused to go to mediation.
In the context of construction disputes many tend to be referred to adjudication which itself offers a swift way of having a dispute reviewed quickly (usually within 28 days). By its nature, however, an adjudication carries its own inherent risk in the same way as any form of court proceeding. An adjudication involves a legally binding decision although it can be opened up and reviewed in a subsequent court or arbitration proceedings. If engaged at an early stage, mediation can help avoid a duplication of legal costs and result in a final decision thereby avoiding the risk and costs associated with an adjudication process .