Edgar Paltzer is a Swiss-based attorney-at-law who specialises in providing legal advice on wealth structuring services. This article will explore the topic of mandatory mediation and how, with a rise in legal disputes in many countries, court systems around the world are increasingly turning to mediation and other alternative dispute resolution methods to help stem the flow of commercial law disputes appearing before the courts.
Over the course of the last 25 years, technological advancements and the rise of the digital economy have paved the way for commercial globalisation on an unprecedented scale. Nevertheless, this vast increase in cross-border trade has placed additional pressure on court systems in countries around the world, many of which were already struggling to manage their existing caseloads.
Alternative dispute resolution encompasses a variety of techniques that enable aggrieved parties to settle disputes without placing pressure on already overburdened court structures. Different forms of alternative dispute resolution include arbitration, settlement conferences, negotiations, conciliation, neutral evaluation and mediation, the latter being a core method of alternative dispute resolution that differs from traditional litigation-based disputes due to its self-determined and voluntary nature.
Mediation is a form of negotiation conducted between the parties via a neutral third party. This independent mediator has no power to impose a settlement and is simply there to encourage the parties to identify a solution that is mutually acceptable to them. The mediator achieves this by helping the parties to define issues at the crux of the dispute, enabling them to establish priorities, reduce misunderstandings, express emotions, reach points of agreement and ultimately negotiate a mutually satisfactory settlement.
In many jurisdictions, mediation remains a somewhat novel approach, although the concept is not new. Indeed, one of the first documented examples of mediation occurred in Mesopotamia over 4,000 years ago. When parties enter into mediation, they do not forfeit their legal rights. If mediation fails to result in a settlement, each side is free to enforce their rights through the appropriate court or tribunal process.
Lawmakers around the world have passed legislation and even a multilateral convention geared towards increasing the use of mediation. Mandatory mediation is a process of court-ordered mediation that is increasingly being implemented by various jurisdictions, including Turkey and Ontario.
Many court systems around the world are keen to introduce mandatory mediation as part of efforts to reduce adversarial litigation. In addition to reducing the caseloads of already overburdened court systems, mediation can also present significant benefits for the parties themselves, enabling them to self-determine their own agreements and helping them to avoid protracted and costly court cases that could potentially damage their reputation.
