Mediation is an efficient and cost-effective means of resolving disputes. There are situations, however, when mediation is not suitable to the resolution of the dispute in question.
In a previous post titled Costs and Causes of Business Disputes we discussed a new inquiry by the Australian Business and Family Enterprise Ombudsman (ABFEO) that revealed the massive costs facing businesses using formal pathways to resolve a dispute. They include legal costs and the costs associated with the end of business relationships. Mediation was mentioned as a better way to resolve disputes at much lower cost and with the benefit of potentially preserving a valuable relationship.
Despite the benefits of mediation it may not always be suitable to resolving a dispute. Situations in which mediation may not offer the best solution include the following:
- Where one or all of the disputing parties are not open to mediation or are not capable or willing to participate in mediation;
- Where one of all of the disputants don’t have the will to settle the dispute;
- In which the parties to participate in the mediation don’t have the authority to settle the dispute and in which those with the authority are not available or unwilling to approve settlement;
- There is a significant power imbalance between the potential participants which cannot be adequately dealt with;
- Where there may be issues of mental health, safety or violence that cannot be adequately managed;
- Where there may not be a range of options to discuss and negotiate;
- Where the law has been broken and/or the legal position is very clear;
- Where there is no substantive dispute and/or no relationship that needs to be preserved; and/or
- In which one party’s Best Alternative to a Negotiated Agreement (BATNA) is better than any option available through mediation.
Despite the significant benefits of settling disputes through mediation, including much lower costs and potential preservation of relationships, some situations don’t necessarily lend themselves to the resolution of disputes through mediation. Those situations are best handled in other ways and the mediator, or dispute resolution practitioner, can help design a process that is more suitable. In some situations the formal legal process may be the only way.