Mediation avoids the expense, prolonged duration and stress of litigation, and gives parties more control over their own outcomes. By exploring the interests of all parties, the process allows for the development of creative solutions that may not have been considered before.

Even in cases where no final solution is found, partial success can be achieved when certain aspects of the dispute are resolved, making for a simpler process going forward.

A mediator is a facilitator, not an adviser or judge. As such, the mediation process is one of discussion and creative exploration guided by the mediator, with the goal of reaching an optimal, mutually acceptable solution for all parties.

The mediator:

• Does not advise as to the merits of any dispute, but serves as an impartial facilitator
• Listens to each party and helps them examine their position from a neutral standpoint
• Facilitates discussions between the parties
• Encourages each party to honestly and creatively explore options for settlement, investigating the interests and uniqueness of each situation.

Ultimately, the parties themselves (together with their advisers, should they be represented) decide whether to settle or not, and if so, on what terms. Once an agreement is reached, parties document the agreed outcome in an enforceable contract.

The sooner the better. Although mediation can be effective at any stage of a dispute, the earlier mediation is pursued, the more likely it is that a solution can be found to benefit both parties. 

Parties often use mediation to de-escalate emerging disagreements, to rebuild bridges and to re-establish functional working relationships before a dispute is processed through formal channels.

In South Africa, mediation is typically employed in family and labour law issues. However, commercial mediation has been used to great success over the last few decades in Europe, North America and Australia – for very good reason.

Business disputes are mostly about money, but they are never solely about money. Mediation provides an opportunity for parties to not only reach a monetary outcome, but to reach creative solutions that are mutually beneficial and commercially sensical – solutions that allow for restoration of important business relationships. Good relationships are imperative to any successful business.

Official statistics are hard to come by, but it would appear the solve rate for mediated cases is around 85%. Even in more complex matters, where perhaps a reduced success rate of 60% is prudent to apply, mediation still proves worthwhile when considering the cost and time required by alternative options.

In short, litigation is a full and formal court procedure where parties are legally represented by attorneys or advocates before a judge, who ultimately makes a ruling to which parties are bound. It is often a long and expensive process. 

Arbitration is not heard before a judge but an arbitrator, often an expert in a specific field, whose ruling upon the parties is binding. While, in theory, arbitration is less formal, drawn-out and expensive than litigation; in practice, this is not always the case.

In contrast, mediation is a more flexible and creative approach where the parties control the outcome of the dispute. The mediator facilitates the discussions, but the parties are free to suggest new options and solutions right up until the point that an agreement is reached. Parties have to agree to the outcome for the mediation to be successful, and if no agreement is reached, parties are not bound and can revert to litigation if desired.

While mediation is a good consideration for most disputes, it is not always suitable. Possible hindrances to the process include scenarios where:

• One party wants to win at any cost and has money to burn.
• There is a severe lack of trust between the parties or there are emotional blockages.
• Parties have poor negotiating skills.
• Parties are unrealistic about alternative outcomes.
• Parties do not agree on certain objective standards.