The What, Why and How of Mediation

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Mediation is a term often bandied about in the context of disputes – sometimes as a threat sometimes as a sort of magical panacea.  People go to mediation in the hope that it will be can be a circuit breaker – a way out of a dispute with as close to a happy ending as can be achieved.

But what is a mediation actually like? What can you do to best prepare for it?  Where do things go wrong? And when you are both so far apart, is it worth even bothering?

We talked to high profile mediator Tony Lendrum[1] in episode 4 of the Divorce Café podcast, to find out how he goes about mediating a dispute, why he thinks it’s worth doing, and what are its the limits or risks.

What is mediation?

Mediation is a dispute resolution process that provides an alternative to going to Court, whereby parties engage in a structured and semi-formal discussion with an independent mediator who assists them to resolve their dispute.

If parties can reach an agreed settlement of their dispute, at the end of the mediation an agreement is prepared documenting its terms, and is signed by the parties and the lawyers.

Why mediate?

There’s a lot to like about mediation:

  • it is one of the most efficient forms of dispute resolution, and can enable parties to avoid the stress and expense associated with court proceedings.
  • it is a confidential process, which enables parties to deal with important and sensitive issues privately.
  • there is no obligation to settle – it is a voluntary process – meaning that the parties decide whether any of the proposed solutions meet their needs.

Mediation lacks many of the adversarial parts of litigation – for example you will have an opportunity to speak if you would like to, and you will not be cross examined.  Because it is voluntary and aims to reach a consensus, mediation can also improve relationships in a way that litigation rarely can.

An effective mediator can also bring the interests of children into the mediation, including in certain instances hearing from the children in advance.  Tony Lendrum says that he will sometimes use the following approach:

“[I] ask the parents to imagine that their children are, for the day’s purposes, all between 14-16 years old and that they will be listening closely to what their parents say to each other, and more importantly, how they say it over the course of the day.”

Tony’s top tip for people preparing to go to mediation is not to “anchor” to a particular position, but to be open-minded to a range of outcomes. Crucially, parties should consult their legal representative and ensure they have all the information they need to make in informed choice to settle, or not.

A mediated agreement is binding

Among the many benefits of a mediation for resolving a dispute, are risks that arise from the fact that people are different, in their priorities and the power they wield in the relationship.  These are factors discussed in the Court of Appeal’s decision in what Tony Lendrum considers a pivotal case: Hildred v Strong[2]Hildred confirms that in the absence of some fairly extreme bad conduct, the parties will be considered to be “able, adult parties who are separately represented” and the agreement will stand.

Hildred v Strong confirms that that agreement is a contract that is effective to alter what would otherwise be the legal rights of the parties – even if:

  • the parties later change their minds,
  • the agreement isn’t what a Court might have given them, or
  • they later consider they didn’t have all the information they needed from the other to properly agree anything.

People have different reasons for agreeing to a settlement in a mediation, such as a pressing tax bill, guilt, the financial uncertainty of a large settlement, securing the right to keep the family home, an end to crushing ongoing conflict.  The Court in Hildred said that as long as the parties are separately represented, they can make the decision to settle for their own reasons and the Court will not later second guess those.  The Court said:

Parties ought not lightly to be able to resile from a settlement.  There is a public interest in the finality in dispute resolution processes, which must also be given weight.”[3]

The case should bring confidence to mediating parties that the agreement they reach on the day will be binding even if the other party subsequently changes their mind.  But it also usefully raises matters that are essential to a fair process – which is not the same as achieving a settlement at any cost.

Mediators and lawyers have an important role to play

Mediators and lawyers do however need to be sensitive to the parties’ reasons for settling.  Power imbalances, the extent to which a party can resist the pressure of the other, and exhaustion as a factor in a settlement have the ability to destabilise an agreement.  There is a very high threshold for duress or unconscionability (two factors that may get a contract overturned), but these are still elements to which careful attention must be paid in a mediation:

Some parties will be more willing to compromise than others.  These factors must be borne in mind in applying the principles which are relevant to the vitiation of contracts…

…The parties are not free agents in the sense of deciding whether to deal with each other or not.  Mediation must be seen as a voluntary alternative to an otherwise compulsory process.”[4]

Either party may walk out of a mediation without an agreement if the process isn’t serving them.  That’s important because if a party does stay, they will be considered to have stayed and settled for their own rational reasons.

Hildred confirms the importance of getting all of the information you need before you walk in the door.  “Mistake” and “misrepresentation” as grounds for overturning a mediated agreement are hard to establish and a remedy can be unavailable because both parties had lawyers and had the ability to seek disclosure and to correct misunderstandings/information before they walked in the door.

Unless issues such as duress or undue pressure arise and can be proven to the requisite threshold, the outcome will be binding on all parties.

Alternative but binding

Overall, mediation remains one of the most efficient resolution processes and can create solutions that aid both parties. But “mediation is not a court proceeding in mufti[5] – it is an alternative method of resolving a dispute, but while decisions are not imposed upon the parties by a third party you will still be bound by the agreement you reach.

If you’d like to hear some great tales of the mediations Tony has been involved in or just to be better prepared for your mediation, listen to our conversation on the Divorce Café podcast, by clicking here, also available on Spotify, Apple Podcasts, Google Podcasts, and Youtube!

Taina Henderson is a director and relationship property lawyer at Henderson Reeves specialising in helping people into and out of relationships and can be contacted at tainahenderson@hendersonreeves.co.nz.

 


[1] www.tonylendrum.co.nz
[2] [2007] NZCA 475
[3] At para 23 citing MacKenzie J at para [47] of the High Court judgement
[4] As note 2
[5] Hildred v Strong [2007] NZCA 475 at para 16

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