by Andy Yeoh Tze-Hwa (5 September 2021)
If you have ever encountered or become involved in a suit in Court, you will probably find it costly and stressful throughout the whole litigation process. Most of the people might think that the only way to resolve the issues between parties is to fight it out in Court. However, before the parties proceed into a full trial or hearing in Court, parties can choose to undergo a mediation process as an alternative method to resolve the dispute between parties. Mediation is an alternative resolution which is voluntary, informal and flexible as compared to a full trial or hearing in Court.
BENEFITS OF HAVING MEDIATION
First thing we need to know when we are involving in a suit in Court is that the one who make the decision of the case will be the Judge. This makes you to have no control over the outcome of your case. However, in mediation, parties are encouraged to negotiate and mutually arrive at an acceptable solution for the resolution of the dispute. In other words, you can decide on the outcome of the case.
Another benefit of having a mediation is that there is the guarantee of confidentiality. All disclosures, concessions, admissions and communication made during the entire process of mediation are strictly “without prejudice”, confidential and remain known only to the parties and the mediator. Hence, any documents, evidence or admissions disclosed or made during mediation by any party will be protected by the without prejudice privilege and cannot be referred to or used against them subsequently if settlement between the parties is failed.
Mediation can really save up a lot of times and costs as compared to going through the whole litigation process ie. The Full Trial.
Mediation is a dispute resolution method that can save time and legal costs. Mediation focuses on the needs and interests of the parties instead of the legal positions and enforceable rights in a litigation process. Upon a successful mediation, there will be no further litigation of the matter. In the case of successful mediation, the decision is made by parties where the terms for the solution are often recorded in the form of a settlement agreement or consent judgment, signed and agreed by the parties. This differs significantly from litigation where a judge is the decision-maker and parties are bound by a judgment delivered by the judge. The terms of the settlement agreement or consent judgment are binding and enforceable between the parties and in the event of breach, the defaulting party can be sued for breach of the settlement agreement or consent judgment. However, a small tip after a successful mediation is not to record an agreement between parties, it is always better to record a consent judgment instead of a settlement agreement. Further, it is always advisable to record the consent judgment on the day of mediation to avoid any party who change their mind after the mediation session.
Section 2(a) of the Mediation Act 2012 allows the mediation to be widely applicable to various personal and commercial disputes except for the following disputes/court proceedings:
- Constitutional law – issues under the Federal Constitution
- Prerogative writs (Courts of Judicature Act 1964)
- Temporary/permanent injunctions
- Election petitions under Election Offences Act 1954
- Proceedings under the Land Acquisition Act 1960
- Judicial review
- Native Court
- Any criminal matter
Save for the above exceptions, parties are encouraged even by the Court to resolve the parties’ disputes by way of mediation instead of litigating the matter in Court.
Parties in a legal suit are more likely to accept and comply with the settlement agreement or consent judgment as mediation focuses on and addresses the needs and interests of the parties. Therefore, the dispute between the parties is more effectively resolved by way of mediation than litigation. In addition, mediation is a method that is more favourable to parties who wish to preserve family or business relationships.
- Any mediation process will start with an introduction by the elected mediator and the explanation of the nature and process of mediation. The mediator must ensure that the parties who are attended the mediation have the authority to enter into a settlement, especially in the case where the disputing parties are companies or organisations. The representatives of companies or organisations must have the authority decide on behalf of their respective companies or organisations. The mediator will also impose certain ground rules on the parties throughout the mediation process. For example, parties are encouraged to speak and address each other with courtesy and only one person is allowed to speak at a time.
- In the first joint session, the mediator will identify the issues at hand and acknowledge the concerns, needs and interests of the respective parties. During this session, parties are encouraged to raise their disagreement/misunderstanding and explore various options and alternatives to resolve their dispute
- After the first joint session, each party will have a private session with the mediator where they can discuss confidential and sensitive issues pertaining to the dispute with the mediator. This is usually when parties will be disclosing some sensitive issues which they are not comfortable expressing or disclosing to the other party in the first joint session. To ensure fairness of the mediation process, parties are given equal time and opportunity with the mediator in each private session.
- At the end of the private session, the mediator will invite both parties to attend the second joint session where options and alternatives solutions will be discussed between parties, focusing on the needs and interests of the parties. The mediator will assist and facilitate the parties to solve their disputes amicably and effectively. In the event parties can resolve their disputes, the mediator will advise parties to enter into a settlement agreement or a consent judgment, which contained all the detailed terms for the settlement. However, if mediation is unsuccessful between parties, the mediator will dismiss the mediation session. In instances where parties only manage to reach a settlement that resolves part of the dispute, parties have the option to resolve the remaining dispute by way of litigation.
- In the event either party breaches any term in the settlement agreement or consent judgment, the non-defaulting party may sue the defaulting party for breach of the settlement agreement or initiate an enforcement action for the consent judgment. In the event the consent judgment contained some terms that required one party to execute certain actions, the non-defaulting party can even file an action for contempt of court which involved imprisonment.
WHEN SHOULD I MEDIATE?
There is no hard and fast rule when it comes to mediation or when should you refer a dispute to a mediator. However, it is always recommended to keep the mediation option open as it will be more cost & time effective to resolve any dispute by way of mediation as compared to litigate the matter in Court. Further, due to the nature of the litigation process, parties usually suffer from an breakdown or ineffective communication and compromised family or business relationships at the end of the litigation process.
You must always remember that it is always the right time to mediate, even at an advanced stage of litigation.
Always keep the mediation option open as the mediation may result in an amicable settlement. There is no harm to go for mediation where at worst, the parties are better aware of their respective positions as they proceed with the dispute resolution process.
Note: This article does not constitute and should not be relied on or treated as legal advice on or with respect to any particular case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.