How Mediation is a Preferred, Economical and Time Saving Dispute Resolution Mechanism

During these trying times wherein the world is facing the aftermath of the spread of the Covid-19 virus, people have come to a standstill with their normal day to day activities coming to a sudden halt and them being introduced to the new norm of lockdown induced activities. . While the world as a whole faces a humanitarian, medical and economic crisis, there is also the question of getting things back on track. Things which have been thrown astray by this pandemic and the ensuing crisis. One thing is for sure that in the immediate aftermath of this crisis we will be faced with a new set of problems in every field including the judicial and conflict resolution area. This is the issue that we shall be focussing on in the present article. In the field of dispute resolution, the problem has two main facets to it. To start with, there will be the problem of getting things back on track in the immediate aftermath of this crisis which in itself is going to be quite the herculean task. Then there will be the new challenges posed by this pandemic which will require a novel approach as well since the problem will be of a nature which we have never faced before. When we have a novel problem, we need to come up with novel solutions as well. However, before we can identify the solution, we also need to better understand what our challenges are.

Challenges faced due to the Pandemic4

In the Judicial and conflict resolution sphere one of the biggest challenges faced is how to identify disputes which arise directly or indirectly as a consequence of this pandemic and how to resolve such new kinds of disputes. The courts, especially Indian courts, when faced with a new and novel issue would find it very hard and difficult to adjudicate upon them and as a result, the parties will find themselves locked in a long lasting and resources squeezing legal battle with a very uncertain and delayed resolution, if a satisfactory resolution is in fact achieved. The problem is that in many cases, especially those affected by the pandemic, it would be difficult for the courts to decide which party is at fault as all the parties would pray that since they were hit by the pandemic they could not and should not be blamed for any shortcomings on their part which shall become one of the most difficult aspects to adjudicate over in the first place. In fact parties who might not have been hit by the pandemic badly or even at all, will use it as an excuse to evade certain penalties or shortcomings on their behalf. The second and equally large problem is that due to the lockdown and closure of courts and the uncertainty over when they will open as well as the status of the strength with which they shall open , the public at large has come to a standstill with not many avenues left for resolving their legitimate disputes and conflicts legally. This will be one of the greatest challenges before an already overworked and overburdened judiciary where the number of cases, which are still pending adjudication in the judicial system are in the millions. These factors make approaching the judiciary with new cases a very unattractive and an avoidable proposition.

What is the Solution?

Now we are faced with the question of what to do in this current situation of chaos and confusions and how to ensure that we arrive at a solution that is the most profitable for all parties. Now this is a tricky dilemma and to analyse this as openly as possible, g if we were to ask ten different subject matter experts for a solution for the same, we will end up receiving ten very different and confusing answers from them instead of being able to arrive at a consensus. While it wouldn’t be wise to declare these solutions as completely wrong  the  fact of the matter is that each entity, organisation and individual needs to come at a decision for what is best for them.  Having said that, in case of any dispute which needs impartial and fact based legal adjudication, the end result that the parties want is an end to their dispute with minimum expense and in the quickest amount  of time. This is where mediation, as a tool, is the answer to the question and the need of the hour. This is a method by which parties will be able to resolve their disputes in the quickest possible time and at a fraction of the expense that a long drawn litigation shall cost. Most importantly in mediation unlike any other dispute resolution mechanism the final result rests with the parties i.e. the final decision shall be what the parties agree to by mutual consent.

4What is Mediation?

The next, most appropriate question would be to ask about what mediation is. To put it simply mediation is a process in which parties sit across the table and try and reach an amicable and mutually acceptable solution to a dispute. Now how is it different from a simple meeting which you might have conducted with the other party, and failed? Well the difference in mediation is that in this scenario, you have a trained and experienced mediator who guides the discussion and ensures that the parties remain focussed upon the issue at hand and do not digress from the main focus i.e. dispute resolution and run into a tangent or worse even into a confrontation resulting in an unpleasant and unprofessional environment. The mediator explains to both the parties the pros and cons of their case and makes them understand what they may expect to get and what they need to let go of. The mediator can also explain the risks you take by going into litigation. For example, there might be a resolution by which you are getting a smaller amount than you believed you are owed, as a part of the mediation because this is the amount the other side has agreed to pay. Now depending upon the facts and circumstances of the case the mediator might explain to you that by going into litigation/courts this case shall linger on for 8 to 10 years and after that much time too, you might end up getting more or less the same amount due to the nature of the case. There is a flip side to this scenario too in that the other party can be made to understand that they should pay an increased amount, from what they are offering and to which the other party had agreed to while coming down from their original demand as that’s their best option. It’s true that the other party can go into court and thereby avoid paying that amount for a period of 8-10 years however, they  can also end up paying compound interest on the originally demanded amount which the other party shall claim in the courts and end up paying way more than what they are having to pay now. In this case, the mediator can also help the parties in arriving at a payment plan i.e. something like a monthly, quarterly or bi-annual system of payment whereby parties can pay what they agreed to pay without having to go under the duress of paying the whole amount in one go. These are just some of the benefits of mediation. Having said that any mediation completely depends upon the cooperation of the parties and their will to want to end this dispute quickly and effectively. No mediation can be successful without the participation of the parties involved. This is because unlike court cases or arbitrations, in mediation the final resolution is reached upon by parties agreeing to a resolution. Even though the mediator is there to guide the parties with his inputs it’s for the parties to decide their final resolution and that cannot happen without some cooperation. Parties have to understand and agree that while some of their demands will be met there are some things that they would have to let go of in part or completely in return for their demands whichare being met. It has already been explained above as to how a mediator will explain to the parties as to what they should expect and what will be expected of them in return, however, this is only possible if both partes agree to the solution provided in order to save their time, money and resources. It has been seen that in many disputes, which the parties deemed as beyond reproach, mediators have been successful at arriving at an amicable decision agreed to by both the parties through agreeable compromises made, resulting in an ingenious win-win situation.  Mediation is the only dispute resolution mechanism wherein there is a possibility that all parties may return back to their respective corners, not having lost completely. but in fact having gained some points which they might not have in a normal court case as the final decision is what the parties mutually decide unlike a court case of arbitration where there exists a legally binding resolution which is thrust upon both parties by a judge/arbitrator.

Why Mediation?

But why Mediation? Well at the expense of being repetitive, two very obvious and visible reasons are the cost effectiveness and the time bound manner in which its decided. With just a few rounds of meetings, matters have been resolved. Another major positive aspect of mediation in these new and changing times forced upon us by the pandemic, is that it can be done online through video conferencing, thereby making it perfect for parties in lockdown, quarantine and in different cities being able to attend them and in the bargain making the process a little more cost effective and time saving. This leads us to another question of what would happen if mediation does in fact fail. As in any other situation, yes that is a possibility as well but there seems to be no better alternative either.  For entities, organisations and even individuals who are faced with multiple , mediation is perfect because even if they are able to resolve 50% to 60% of their disputes by way of mediation the cost saved is huge and far outweighs the cost and resources that would have been borne on sending all their cases to litigation and further, it is a  small cost paid for failed mediations. Moreover, another important advantage is the time saved due to the process of mediation, which cannot be quantified in monetary terms.  Now if you are an entity or an individual facing a single or very few disputes then it becomes purely a question of what is the value of your single or few disputes and if the value of your disputes’ is high i.e. you believe that someone owes you or you are about to be sued for a considerable amount of money. This is important particularly in the case of high value disputes  where the cost of going into mediation with this small chance that it may fail is negligible compared to the cost you will end up with, through a litigation which may drag from 5 to 10 years. It is an exercise that is cumbersome, tedious and costly as court fees/arbitration fees and advocates fees and other ancillary expenses would be high as we are dealing with a high value case. Whereas mediation will solve the same problem in a fraction of that cost. However, this does not in any way mean that cases that are not of very high value are not fit for mediation. As a matter of fact any case is fit for mediation as long as parties approach the mediation process with an open mind and a will to resolve their disputes. It has been seen and observed that when parties have in fact approached the mediation process with a positive frame of mind and the correct approach, mediations have seen up to 80% success rate in resolving disputes.

ROLE OF THE MEDIATOR :

One of the major differences between a court case/arbitration and mediation is the role of the mediator. Being a trained professional not only is he able to guide, assist and help the parties in manners already discussed. The biggest difference is that unlike a judge or arbitrator the mediator is more like a friend to both the parties who tries and ensures that both parties leave the arbitration table satisfied to the best possible extent. He understands your problems and provides you possible solutions and is not there to force you into doing something or pass a order/award against you. This is one of the most important factors of what makes mediation unique along with the fact that the final decision is what the parties decide by way of mutual consent. Mediators have been known to crack and resolve issues considered beyond repair by sheer diplomacy, smart resolutions and making parties understand the other party’s  view without losing focus of their own requirements. This is not an easy task. But one that has been ably carried out by good mediators throughout the world. 

Lastly all disputes resolved by way of mediation, in India, are finalised under a settlement agreement under section 73 of the Arbitration and Conciliation Act (The Act). Unlike a normal agreement a settlement agreement under section 73 has the same effect as that of an arbitral award passed under section 30 of the Act. Thus such an agreement can be enforced and challenged in the same manner as an arbitral award and has the same legal sanctity as an arbitral award.

Conclusion

One can always argue and say that I will take my chances in court. However, in today’s already complex and uncertain times made worse by the pandemic we need to understand that we cannot have a hard and fast approach towards disputes like we had till now and we should try and resolve them swiftly and amicably so that we can get back to taking care of our businesses and everyday work which shall need our special attention as all businesses have been adversely affected by the crisis and need to get back on their feet again. The idea behind mediation is to get out of a dispute quickly, effectively and in an economically viable manner and that can be achieved with the cooperation of the parties and little will power of wanting to get out of the dispute.