Formal Mediation with a Trained Mediator is More Effective in Dispute Resolution
Formal mediation is a mediation conducted by a trained mediator. They are an expert in their field and their role is to help the parties facilitate discussions of settlement. In a formal mediation the parties must be prepared to put their hand in their pocket to resolve the dispute. But is spending that money always worth it?
What is the Difference?
An informal mediation is a meeting run by a mutual connection or a third party who is not a mediator. They are not trained in how to conduct mediations or in the art of negotiation. Rather, they are there because they are known and trusted by the parties. They are seen as someone who can help keep the peace.
The setting in an informal mediation is also less foreign. Often the mediation is held at one of the party’s premises or via telephone. This is a familiar location and can make the parties feel more comfortable. In some instances, this can make the parties feel too at ease and not appreciate the seriousness of the dispute.
There are often no lawyers or advisors involved in an informal mediation.
Disadvantages of Informal Mediation
The greatest disadvantage of informal mediation is that the parties do not have access to someone who is trained in mediation. This can affect the whole mediation, from its structure through to the parties’ attitudes.
In our experience, a formal mediation is more likely to resolve the dispute. The mediator plays a significant role in helping resolve the dispute by differentiating between a position and an interest. A position could be asking for $50,000 whereas an interest is the reason behind why that person is asking for $50,0000. The more entrenched that party becomes in their position, the harder it is to reach a resolution and to turn the focus on their interest.
Once the interests of both parties are explained and understood, a settlement is far more likely.
Which is Binding?
A settlement reached at a formal mediation is more likely to be binding than one reached at an informal mediation. At a formal mediation, the parties will sign a Deed of Settlement which they intend to be bound by. This is a written document evidencing the agreement reached in very clear terms. They are often crafted by lawyers with many years of experience.
On the other hand, a settlement at an informal mediation may not be documented at all. If it is documented, it may not be signed or may be ambiguous and open to interpretation. These outcomes may not be legally binding. If they are, it will be far harder and costly to enforce. Whilst an informal mediation contains less upfront costs, the enforcement of any settlement agreement will absorb those costs within 1-2 weeks.
You can view our video on the steps involved when deciding to litigate here.
If you need assistance resolving a dispute or attending a mediation, please contact one of our expert litigation lawyers at Taurus Legal Management on (03) 9481 2000 or email@example.com.