The term alternative dispute resolution (ADR) refers to a range of methods in resolving a dispute outside the court system. It includes arbitration, adjudication, early neutral evaluation, conciliation, mediation and negotiation. In this article, we will focus on mediation in the form that is most commonly practised in Hong Kong, the US and other common law jurisdictions.
Mediation is conducted by a mediator. In Hong Kong and many jurisdictions, the mediator undergoes special training and official accreditation. It is a precondition that the mediator should be impartial, fair and independent, having no conflict of interest with the parties for the case he/she takes on. In some cases, a mediator is chosen for his/her specialist knowledge and experience, such as construction, insurance, intellectual property, or family law.
The mediator does not adjudicate the dispute. He assists the parties to come to agreement on settling the dispute through identifying the issues and underlying interests, generating options, encouraging the use of objective criteria and data, and helping them to reality-test their thinking and proposals.
Unlike court litigation, which is governed by procedural rules, mediation is a structured process when the mediator meets the parties in joint sessions (usually accompanied by their lawyers and/or technical advisers). He/she also meets the parties separately in private sessions (called caucuses) when he/she analyses with each party the current negotiation dynamics and conditions, and helps the parties to formulate new offers and counter-offers.
What is discussed during a caucus remains confidential, and must not be disclosed to the other side. There are no fixed rules as to how many times the mediator puts the parties into joint meetings, or caucuses. It really depends on the dynamics, and an experienced mediator will be able to use this technique to everyone’s advantage.
Confidentiality. Mediation is a confidential process. Nothing discussed or revealed in mediation may be disclosed to outsiders (including the judge who might hear the case later). Because of this, the parties have less inhibition in opening themselves up to discuss and explore with the other side.
Party autonomy. Mediation upholds the principle of party autonomy and responsibility. Without the parties’ mutual consent, no mediator can be appointed. The parties (in consultation with the mediator) agree on the scope of the dispute to be mediated, the time and venue of meetings, the costs of the mediation, and the terms of settlement. The final outcome of the mediation is determined by the parties. They are the ones who decide if they wish to settle, and upon what terms.
Underlying interest versus position. When a dispute arises, the parties will assess their side of the case, and arrive at a view of how strong or weak their case is and what terms and conditions upon which they are prepared to settle. This is their “position” regarding the case.
However, every party’s interests are considered in light of his/her identity, future aspirations, financial constraints, overall business strategy and other concerns that lie wider and deeper than just his/her position regarding the case. A mediator is trained to delve deeper into the underlying interests of the respective parties, from which common ground may be wrought.
Settlements that satisfy the underlying interests of the parties are the best. The success of a mediation will usually depend on how flexible the parties are in moving away from their position, and focusing on their interests.
Creativity. At trial, the judge looks at the evidence and then gives a judgment based upon the parties’ strict legal rights. He cannot order any relief outside what has been claimed.
Mediation, however, enables parties to bring new things to the table, even if they were not within the original dispute. This gives flexibility in generating new options, with a higher chance of reaching settlement.
Speed and costs. In most cases, spending a few hours or days in mediation is a speedier and cheaper way of achieving a solution than months of going through the court system to trial and judgment. Where the mediation seems not to be useful, it is open to any of the parties to call a stop to the process. Ultimately, if mediation fails, the parties can always go back to the legal process anyway.
Benefits of mediation. Mediation offers the parties a platform to exchange views with the other side through facilitation of a mediator. With creative thinking, and tough reality testing, it strives to build a settlement on common ground while satisfying the parties’ respective underlying interests. It is often less stressful than the court process, with certainty in the outcome. Relationships and goodwill may be established. The end result may be more satisfying than going to court.
In part II of this article, the authors will illustrate the above-mentioned benefits through a case study.
CW Ling, a barrister, is the honorary secretary of Hong Kong Mediation Council (a division of the Hong Kong International Arbitration Centre) and an accredited mediator; Stephanie Cheung, a solicitor, is a council member at Hong Kong Mediation Council and an accredited mediator