Much has been written recently about the benefits of ADR in resolving disputes before they end up in court. I attended what seemed like my gazilliionth mediation last month in my capacity as liquidator of a company and came away with the belief that they are extremely beneficial – even though they may not seem like it at the time.
Despite my slight exaggeration on numbers, I have had cause to attend quite a number of mediations and the vast majority has lead to a settlement of the matter. The most recent one was memorable, not because it went for about 10 hours, but because of the first 5 minutes.
The mediator – a very experienced Brisbane SC – gave his opening address and in essence said that this was not a process designed to come out with a win / win result – that would not happen. The result would seem like lose / lose as both side would have to give up more than they expected to reach a middle ground, and that if each side was not agreeable to do that, there was little chance of a resolution. Both sides would leave unhappy and have second thoughts the next day.
But he did say that the lose / lose at mediation would be better that the result at trial. One party would likely lose all and be really unhappy – their unhappiness would reach new levels. The party that won would be happy until they realised the cost of winning as compared to what they won, then they too would be unhappy.
To add one further factor, I was a third party to the dispute. Essentially there was a pool of disputed money and two parties were arguing over who had a better (equitable) security and first rights to that pool. Both sides thought that they should get priority for their debts and the other side should get the balance (if any).
My position was that, in their arguments about why the other security was unenforceable, void, unfair, invalid etc, there was a real chance that the court may decide that neither party had a valid security and the money may come to me.
The end result was that the matter was settled and neither party was happy – I was still neutral. They both gave up more than they expected to or wanted to, but both did so on the realisation that nothing is certain in litigation and the result may have been a lot worse. Certainly, given the amount of money in dispute, three days of litigation in court would have cost more than a proportionate amount of the pool.
The mediator was absolutely correct.