26 Aug Guest Blog: 3 Reasons To Mediate Before You Litigate by Nicole Davidson
3 reasons to mediate before you litigate by Nicole Davidson. Read more from Nicole here.
Mediation has been on the legal scene for over 30 years in Australia. It is an alternative to having a matter decided at trial and has the scope to deliver better outcomes for parties to a dispute. However, in the commercial world, rather than being seen as an alternative to litigation, mediation is most commonly used as a part of the litigation process. After proceedings have been issued and various formal legal processes have been carried out, the parties may decide to mediate or, increasingly, the courts will order a mediation to try to settle the matter before trial.
For some time now, I have been advocating mediation earlier in the dispute process. Particularly, I believe mediating prior to issuing proceedings can be of significant benefit to the parties. There are several key reasons for this.
Mediation works
In areas such as franchising and retail leasing, statutory provisions have for some time now required that parties mediate their disputes before they issue proceedings. According to statistics from the Office of the Franchising Mediator, between 70-80% of the mediations held prior to litigation were successfully resolved without the need to litigate.
While not every mediation results in a successful settlement, the discussion between the parties can help to clarify the real issues in dispute and narrow down the scope of potential litigation.
Mediation saves money
For a company, issuing proceedings will cost $1,451 in the County Court (Vic) or $2,902 if you want the matter heard in the expedited list. The defendant will pay an equal amount to lodge a defence. And on top of that, both parties will have lawyers fees for the drafting of those documents. So, by the time proceedings are issued, the parties may already have spent $5,000 to $10,000 in legal fees.
In contrast, the parties can mediate the dispute before incurring these costs. Bringing in a private mediator will generally cost the parties around $2,000 to $8,000 (to be split between them) depending on the length of the mediation and the mediator’s rate. This is not to say that some legal fees should not be incurred prior to mediating. A lawyer needs to give the parties an initial estimate of their prospects in court. The prospects of success can often change during proceedings as new evidence comes in to play and the client also needs to know the possible range of costs that could be incurred to get to trial.Mediation is quick
According to the County Court’s last annual report, only 64% of proceedings brought in the expedited list were finalised within 12 months. In this list, trial dates are generally 4-5 months after proceedings are initiated. For other general matters, trial dates can often be more than 12 months after proceedings are initiated. And, if the matter goes to trial, the average wait time for a judgement to be delivered was 6 weeks in 2016-17.
By contrast, I have been appointed to mediations which have commenced within days of the parties agreeing to the process. While some mediations take longer to get off the ground, often due to the need to co-ordinate the availability of multiple parties, the wait times are much less. Even more so if the parties are flexible in their choice of mediator.
For more information about how early intervention mediation can be used in your dispute, call Nicole Davidson on +61 403 523 700 or go to www.growingbeyond.com.au.
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- Mediation and facilitation to assist parties in getting to agreement