Litigation 101: Why not mediate? The role and importance of mediation theory in selecting your mediator and resolving disputes

Dilip Ramaswamy
28 Sep 2023
Time to read: 3 minutes

Each mediation model caters for a different purpose and may not be suitable for all types of disputes.

A common misconception about mediations is that the sole objective is to "settle" the dispute. While this may apply for settlement mediations (as described below), this misconceived objective can be antithetical for other mediation models. The role of the mediator will often depend on the type of mediation and the mediation model applied for that mediation.

Whether you are an in-house counsel or commercial lawyer, mediation can be a useful tool to utilise when resolving disputes (see Litigation 101: alternative dispute resolution for other forms of ADR). However, understanding the purpose and motivation behind using mediations is important to ensure you are set up to maximise the benefits of this process. In this article, we consider the importance of mediation theory in creating an effective mediation and appointing an appropriate mediator.

Why mediate?

Sometimes, we mediate because it's cheaper than going to Court. Sometimes, we mediate because the Court has ordered it. Sometimes, we mediate because we need a different perspective.

In all these instances, the prevailing theme is that mediations form an important part of the dispute resolution process. However, mediations must be deployed with careful thought to ensure that they achieve the intended outcome. The benefits to mediation are numerous and well known, and include that they:

  • are confidential;
  • are typically completed in half a day or a day;
  • avoid the costs associated with Court (assuming the matter is resolved);
  • enable the parties to retain control in the dispute resolution process; and
  • can often preserve relationships.

While the benefits are clear, it is important to remember that the benefits may only be realised if the parties carefully consider the nature of their dispute and the type of mediator they wish to appoint. Failure to do this may render the mediation to be ineffective and a waste of time, money and resources.

There are four main mediation models which underpin most mediation.

Settlement mediation

In the commercial disputes context, this the most common type of mediation. The objective of a settlement mediation is contained in the words itself – to effect a settlement and/or compromise between the parties. The mediation often commences with parties setting out their initial positions and then throughout the mediation, the parties (typically) progress closer and closer toward a middle ground.

In a settlement mediation, you would select a mediator who:

  • is able to understand each party's case theories and identify their bottom lines;
  • can encourage parties to move from their initial positions through effective communication skills;
  • has previous experience in similar settlement matters.

Settlement mediators are often former lawyers, barristers and even judges in certain cases, depending on the quantum and importance of the matter.

Evaluative mediation

Evaluative mediation focusses on rights and interests. A mediator often plays a more prominent role in the mediation by identifying the strengths and weaknesses of each case, and may predict how a Court or Tribunal would decide the case. The effect of this is that the parties will obtain a better understanding of their respective positions were they to proceed down a litigious path.

In an evaluative mediation, a mediator should have the following attributes:

  • expertise in the subject matter of the dispute;
  • strong communication skills; and
  • a solid understand of court and tribunal procedure.

The above is why evaluative mediators are often current and former legal practitioners. There is some overlap between a settlement and evaluative mediation, however evaluative mediations often involve reality testing and the mediator providing recommendations to the parties about possible outcomes.

Facilitative mediation

In a facilitative mediation, the role of the mediator is to focus on the parties' interests and encourage a discussion about personal and commercial needs instead of legal rights and duties. The mediator is not ultimately as concerned about negotiating positions but is instead seeking to focus on each party's interests. The mediator will seek to ensure there is constructive discussion between the parties which may ultimately lead to productive negotiations and encourage a settlement.

In a facilitative mediation, you would select a mediator who:

  • is familiar with the mediation process (they may not necessarily need knowledge about the subject matter);
  • is able to work through impasses and can quickly recognise the interests and needs of each party; and
  • is dynamic and understands that each mediation will not follow the same format.

Therapeutic mediation

The objective of this mediation is to understand the root cause of the dispute or conflict between the parties to enable the mediator to identify what steps can be taken to ultimately improve the relationship. Therapeutic mediations are often utilised in the context of family disputes where there may be emotional and relational issues in play.

In a therapeutic mediation, you would select a mediator who:

  • can apply professional therapeutic techniques to identify causes of conflict between the parties; and
  • is ultimately not focused on settlement but rather improving relations between the parties.

Therapeutic mediators are often (but not always) current or former counsellors or psychologists.

Key takeaway

As is clear from the above, each mediation model caters for a different purpose and may not be suitable for all types of disputes. Some key practical tips to consider before commencing the mediation process include:

  • When to mediate – Mediations may not be appropriate at all stages of the dispute resolution life cycle. For example, when a claim is in its infancy, a settlement style mediation may not always achieve an acceptable outcome because the parties have not properly considered their case theories and their bottom lines.
  • Type of dispute – Because all disputes are different, the type of dispute can often determine the choice of mediator. For example, a dispute about amounts owing under a contract is unlikely to require the skills of a therapeutic mediator, while a conflict between family members is unlikely to require the expertise of a mediator specialising in settlement outcomes.

Once you have worked through this, your objective of reaching a resolution becomes that much easier.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.