Litigation and mediation :

Poor communication leads to disputes

Justice L.K. Wimalachandra - Former Judge of the Court of Appeal

Litigation or Court resolution of disputes between parties has increasingly been criticized, especially with regard to the resolution of disputes related to commercial issues, partly because of the costs and delay involved. Very often business disputes develop into fiercely contested, expensive and prolonged lawsuits Part I of this article was published yesterday

When the parties resolve their disputes through mediation they are more satisfied and are likely to comply with agreements.

Another advantage of mediation is that it gives an opportunity for the parties to communicate better. Most disputes arise as a result of poor communication. Mediation very often resolves all-important issues to the parties and not only the dispute between them. Mediation leads to a better understanding of issues affecting them, thus improving future relations between the parties.

Even Judges appreciate mediation for the following reasons;

* Cases are resolved more expeditiously and effectively and thereafter no judicial attention is necessary which results in reduced judicial work;

* Some Judges may be reluctant to make decisions that affect the lives of other people, especially the lives of children, (eg. Matrimonial cases involving the custody of children);

* Research conducted on ADR systems like mediation have confirmed that people are more satisfied and likely to comply with agreements reached by them through a mediation process, as against the determinations of Judges in Court litigation.

In a court case the pleading stage alone may take several months. (The initial filing of the plaint, answer, replication and amendments of pleadings). Then comes the ‘Discovery’ process. The service of interrogatories, application for further pleadings, discovery of documents, inspection of documents, production of documents etc. take years. Once the case is ready for trial, fixing a date for hearing depends on the volume of cases on the trial roll.

Very often it is difficult to get a date convenient to all parties. It depends on the trial Judge’s calendar and the lawyers’ diary. Once the trial commences there is no guarantee that it will be concluded within a given time.

After a protracted trial, one party may appeal against the judgment and the appeal may take years.

It is interesting to note that more and more European countries and the United States in particular, encourage the parties to submit their disputes to mediation. Bitter employment disputes between employers and employees, family disputes, are very often referred to mediation.

English experience

In England, Judges often encourage the parties to mediate and direct them to ‘National Mediation Helpline’ set up by the Courts Service.

ADR Alternative Dispute Resolution had grown in recent years across the world. The contributions it might make to the fair, appropriate and effective resolution of civil disputes were becoming increasingly well-known.

He had recommended in his final report among four relevant recommendations in that, if there was a satisfactory alternative in existence to resolving disputes in Court, the Court should encourage the use of that alternative.

Traditional methods of litigation or Court resolution of disputed has been criticized for the following reasons.

* Very often-complicated commercial issues require expert determination. For an instance disputes in e-commerce involving highly technological issues require expert knowledge. However, most Judges are not familiar with the technological aspects of e-commerce. Expert knowledge is necessary in many of the disputes relating to technical, economic, financial, regulatory and legal issues on the part of the dispute resolving Judges. The Judges are not experts in those fields and they will have to depend on experts summoned before them to give evidence. Very often Judges are not even familiar with the many terms used in modern technology;

* The cost of conventional litigation is prohibitive and costs of expert and cost of data gathering is expensive. The cost of not resolving a dispute must be well below the cost of resolving it or of conventional legal proceedings;

* Conventional Court procedure in most cases involved delay;

* Litigation can be damaging to future business relations and frustrating to the parties.

Dispute resolution

* Flexibility - One of the attractive features of Mediation is flexibility. The ability of the parties to select arbitrators or mediators who are qualified to deal with specific issues is a principal element of flexibility. Procedures can be adopted to fit the dispute.

The arbitrator or mediator need not be an attorney and the parties are permitted to select technical as well as legal experts. Arbitrators or mediators may be selected for their special skill and expertise in the field of commercial law, civil engineering or in intellectual property etc. So that they would be able to grasp the intricate problems in the dispute and this would save parties both time and money. Moreover the parties can expect a sensible solution to their disputes;

* Confidentiality- Unlike in Court litigation privacy and confidentiality is maintained. Conducting proceedings in private is important to the parties because expert systems, agreements often contain highly sensitive, confidential and proprietary information and trade secrets of either or both parties. Accordingly the importance of confidentiality is one of the advantages of arbitration and mediation as opposed to litigation. Mediation is preferable to litigation as neither the hearing nor the award or settlement is made public;

* Less antagonism between the parties - This will preserve the business relationship. Mediation is more informal and relaxed than litigation. Accordingly, mediation offers and opportunity to minimize potential damage to the business relationship;

* Cost saving - Mediation is less costly. As it is faster, the costs involved are considerably reduced. Mediation focuses on issues rather than law’

* Informality - the informal nature of mediation produces several important benefits. Informal proceedings are not burdened by detailed and inflexible rules of procedure and as a result the tension may be lessened. Informal proceedings may therefore increase the possibility of facilitating a solution.

Challenges in mediation process

Most often, the mediation process fails when the parties are not truthful. Truthfulness is the basic element in developing trust among parties. If a party intentionally deceive the other party, the entire mediation process will collapse.

Misleading messages create mistrust. Parties can convey deceptive messages by means of action, inaction or even by keeping silent. If the parties are unable to see and feel the other side’s point of view, mediation may not work.

It is to be noted that mediation is mainly concerned with compromise. However, certain disputes cannot be compromised and there are instances where one party is completely at fault. In such cases a compromise may not work when the relationship between the parties has completely broken down.

Mediation in Sri Lanka

Mediation Boards Act No.72 of 1988 gives statutory recognition to the concept of mediation.

The Act provides for the legal framework for institutionalizing Mediation Boards, which have a duty to endeavor to bring the disputants to an amicable settlement by all lawful means and to remove, with their consent, the real cause of grievance between them so as to prevent a recurrence of the dispute or offence.

Another initiative taken to institutionalize the process of mediation is the Commercial Mediation Centre of Sri Lanka (CMCSL) established under this Act aims to promote mediation and conciliation as means of resolving commercial disputes. The centre which engages in settling commercial disputes by mediation and conciliation also has a Code of Conduct for Mediators.

Mediation is a process to facilitate and agreement between the parties in conflict and to assist them in resolving their disputes. Mediation gives people an easy and quick way to resolve their disputes. Decisions reached in mediation are by the people in conflict themselves.

However, no mediation process can be effective if the parties are not willing to resolve their disputes themselves. In comparison to other methods of dispute resolution, mediation is more effective, more flexible and less expensive and the outcome of mediation gives more satisfaction to the parties than those who resort to litigation. Even if the mediation may not bring about a settlement initially, the meeting of the two hostile parties very often takes away the anger and warlike attitude, which would ultimately leads to a narrowing down of disputed issues and leads to a settlement.

Concluded