Mediation has been around in Australia for decades. The Victorian County Court began referring proceedings to mediation in 1983 and the Victorian Supreme Court introduced it as part of the “Spring Offensive” in the early 90s when hundreds of cases listed and waiting for trial were referred to mediation. Though seen as a bit experimental back then, mediation is now widely accepted as an effective, alternative method to resolve disputes. The benefits are obvious – it saves time, cost and the stress of litigation for all involved.

When to mediate?

All disputes have key risks – money, time, relationships and reputation.

We know that 97% of commercial cases are settled before trial, and that the cost of litigation continues to increase. Why wait for the door of the court to settle if that can be achieved much earlier through mediation?

In deciding whether to refer your dispute to mediation, ask yourself:

is the cost of this dispute both in time and money disproportionate to the risk and value involved?
is this dispute jeopardising a commercial relationship the business wants or needs to sustain?
is the continuation of this dispute causing harm to the reputation of the organisation?

If the answer is yes to any of those questions, these are disputes for which you should be considering early mediation. Proposing a mediation before litigation is not a sign of weakness. It makes good, commercial sense. Depending on the business in which you are involved, it also makes good, commercial sense to have a clause in your standard contracts or terms of engagement, obliging parties to mediate any dispute before it is litigated.

By Janet Lambrou