Five benefits of mediation

This topic is a well-trodden path in other jurisdictions but perhaps a useful reminder for disputes in Switzerland. Mediation just makes sense. It allows for the parties to be involved in their own settled outcome rather than leaving it to a third-party adjudicator. A third-party adjudicator can, even with the best intentions in the world, come to a decision that is not acceptable or even understandable, leaving parties necessarily considering appeal options and the further aggregation of legal expenses.

As litigation practitioners are well aware, it is difficult to foster long term clients taking matters to trial. The expenses, uncertainties and uncontrollable factors make it difficult to manage the good relationship with the client. Naturally, if there is an odd decision or loss, clients do not look at themselves when it comes to blame, it usually falls on the helpful practitioner. You can avoid that with mediation.

Sometimes being a party to your own outcome can have a beneficial effect of allowing parties to move on. I have even witnessed cases where the forum of mediation allowed corporate business partners to air matters in a structured and effective environment, leading to a resolution and continued business together.

Regardless of whether the dispute lies in a common law or code jurisdiction, mediation offers a universal solution to resolving dispute. There are several compelling advantages to attending mediation for companies in dispute, making it an effective alternative to traditional litigation.

Interestingly, in Switzerland:

• Article 213 of the Swiss Civil Procedure Code (CPC) allows the parties to attend a mediation instead of the mandatory conciliation hearing before the formal commencement of litigation proceedings. This can be good news where court conciliators may not have the expertise or experience to understand the nature of the issues or be skilled in dispute resolution.
• Mediation can also be ordered during the court proceeding under Article 214 of the CPC similar to that of common law jurisdiction proceedings.
• If the parties do attend mediation, under Article 217 of the CPC, an approved settlement agreement has the same effect as a legally binding decision and is enforceable.

Here are the five best reasons why companies should consider mediation:

1. Cost-Effective Resolution

Mediation is typically more cost-effective than going to court. Often a mediation can, with appropriate preparatory work by the parties, discuss and resolve disputes in a single day. Legal proceedings involve substantial expenses, including fees for lawyers, court fees, and other litigation-related costs. Mediation can lead to a faster and more affordable resolution, as it requires fewer resources and often results in mutually agreeable settlements. A result that may be more flexible and appropriate than the confines of damages or other such remedies under the law.

2. Time-Efficient Process

Mediation usually takes less time than litigation. A lot less. Court cases can drag on for months or even years, causing disruptions to business operations and increasing stress. In contrast, mediation can be scheduled promptly, and the process is driven by the parties involved, allowing for a quicker resolution of disputes. A single-day mediation ending in a settlement versus a 2-year court case with an uncertain result – it is simple math.

3. Control and Flexibility

Mediation empowers the disputing parties to maintain control over the outcome. In court, decisions are made by third parties, leaving little room for customisation. Through mediation, companies can negotiate and craft solutions tailored to their unique needs and interests, fostering a sense of ownership in the final agreement.

4. Preserving Relationships

Mediation is conducive to preserving important business relationships. Litigation often escalates tensions and can lead to long-lasting adversarial relationships. Mediators facilitate open and constructive communication, helping parties find common ground and potentially strengthening their future collaborations.

5. Confidentiality

Mediation proceedings are typically confidential, ensuring that sensitive information and trade secrets are not exposed in a public forum. This is particularly helpful where there are client sensitivities to the other litigants seeing information or information being viewed by third parties, i.e. litigation between trade rivals, intellectual property cases or reputational considerations. This confidentiality encourages parties to be more candid and open during negotiations, as they can discuss issues freely without fear of harming their reputation or divulging proprietary information.

Conclusion

Mediation offers a cost-effective, time-efficient, and flexible approach to resolving disputes that prioritises the parties' control, relationship preservation, and confidentiality.