The process of Mediation always remains available as an alternative mechanism to resolve contractual disputes but, due to the seemingly high failure rate of this process, it became the proverbial lemon among the oranges.  Our standard forms of construction contracts in South Africa recognizes the different dispute resolution mechanisms which include, Adjudication and Arbitration (alternatively Litigation) as the formal mechanisms for the parties to the construction or professional services agreement to have their disputes resolved.

However, nothing ever prevents the contracting parties to “cease fire” in the event of a contractual dispute in an attempt to resolve a dispute amicably.  The challenge is however not the process of Mediation, it has always been the willingness of the parties to participate in such process and the underlying reasons for doing so.  Before Adjudication landed on the shores of South Africa, our industry usually had Mediation as a first step of dispute resolution but this concept lost its flavour as Mediation in the early days were always a form of Adjudication clothed as Mediation, although it was never binding.  The parties almost always insisted upon the Mediator to deliver an Opinion or Determination and then each one could go back to office, consider their options on whether arbitration or litigation would be followed as a next step.  When Adjudication became the next best thing, almost everyone applauded it and the concept of Mediation took the back-seat.

Where did the concept of Mediation then go wrong?  The answer is quite simple.  The concept of Mediation was never wrong, it was just not correctly applied due the insistence of the parties requiring an Opinion or Determination.  This goes straight against what Mediation was intended for in the first place.  The negative perception towards Mediation as an effective dispute resolution process arose as a result of the evaluative approach that have been (and still are) prescribed in some dispute resolution provisions of construction or professional services agreements.  Evaluative mediation is rights based instead of interest based and such provision would usually require the Mediator to provide an Opinion which party should be the successful party and the relief to be awarded to the successful party.

Evaluative mediation is therefore not recommended especially where an Adjudication clause already exists in the construction or professional services agreement. If the Mediator is required to provide an Opinion, then the parties will be better off to resolve their dispute by Adjudication as the outcome will at least be binding on the parties. Also, the concept of evaluative mediation in essence contradicts the whole purpose of “mediation” i.e. to create an environment and facilitate a process where the disputing parties determine the “win-win” outcome without the Mediator expressing an opinion.  Strictly speaking, if Mediation is correctly applied, there are no “winner” or “losers” and moreover, it will also settle the dispute in totality.

Facilitative mediation is an interest based process and requires the Mediator to skilfully exercise wisdom and discernment in such a way that the parties focus on the interests rather than position (or their contractual rights).  As the “mid-wife” in the process, the Mediator will be navigating the parties to arrive at a position where the disputing parties eventually come up with the win-win solution and conclude their own settlement agreement.  It is not for the Mediator to decide what is best for the parties in terms of the outcomes sought.

There is definitely still a very useful place for Mediation as a dispute resolution mechanism provided the disputing parties follow a facilitative approach and participate in the proceedings for the purpose of settlement and not for the reservation of their rights.  A crisp question that should be asked before entering the Mediation arena is whether the parties’ representative’s has a mandate and intention to settle.  If not, go to the meeting, enjoy some tea and biscuits and move on, and then prepare for the next step.