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Mediation and Arbitration

The Alternative Dispute Resolutions (ADR) to Litigation is Mediation, Arbitration and Conciliation.

Mediation, Arbitration and Conciliation

MEDIATION:

Mediation is the processes whereby two parties who are in a legal dispute with one another use an impartial third party (mediator) to assist in resolving the dispute in the best interest of both parties. The mediator will assist in identifying the disputed issues, develop options, consider alternative and endeavor to reach an agreement. Mediation may be undertaken voluntarily, under a court order or subject to an existing contractual agreement.

Some of the most important advantages of mediation are:

  • The relatively high rate of settlement
  • The high level of compliance with the terms of the settlement agreements
  • Great cost savings
  • The speed by which a settlement can be reached
  • The dispute remains confidential
  • It preserves an ongoing working relationship
  • The terms of the settlement are optimal

Some of the factors that favour mediation are:

  • A good ongoing working relationship between the parties is of importance
  • Both parties want to retain control over the outcome of the settlement
  • Both sides believe that they have a good case
  • There is no great disparity in power between the parties
  • A speedy resolution is of importance
  • Both communication and misunderstanding are largely to blame for the dispute
  • Highly complex technical issues are involved
  • Adverse publicity is not desired by either party
  • Confidentiality is of importance to the parties
  • The case will in all probability be settled out of court anyway
  • Neither side really wants to litigate.

What can be mediated?
Nearly any dispute can be mediated, provided the opposing party is ready for mediation. Where a settlement is possible in principle, mediation is often the most effective process to achieve it in terms suitable to both parties.

Matters that cannot be mediated are:

  • Where a precedent needs to be set (this can only be done by a court)
  • There is no bona fide dispute
  • There is no need for a remedy that mediation could not achieve such as an interdict, mandatory order, divorce, criminal matters or liquidation of a company
  • It would not be in the public interest for a person to compromise his / her rights e.g. determining a person’s sanity

ARBITRATION:

Arbitration is the process by which the parties to a dispute submit their differences to the judgment of an impartial person or group, appointed by mutual consent or statutory provisions. Arbitration is a technique for resolution of disputes outside the courts.

Generally the proceedings are very similar to trial proceedings. Arbitrations are governed by the Arbitration Act 42 of 1965.

An arbitration award is binding to the parties to the arbitration. It can also be made an order of court, in which case the arbitration award will then be enforced in the usual manner that court judgments are enforced.

Some of the advantages of Arbitration:

  • An arbitrator with specialized knowledge may be appointed. This is especially important in technical matters.
  • Arbitration is a much faster process than litigation. The waiting time for a trial date may be up to two years, whereas arbitration can start soon after pleadings have closed.
  • The arbitrator and the parties choose the dates of the hearing (as to having dates allocated) and thus ensure that the parties’ legal teams are available to argue the matter.
  • Arbitration is private and confidential. There are no public notices.
  • Arbitration is more flexible than court procedures that are determined by law.
  • In general, arbitration awards are final and binding. Should the parties agree to an appeal, the appeal to a bench of three arbitrators can be heard expeditiously.

Some of the disadvantages are:

  • It does not lend itself as well to a good mutual working relationship as mediation does.
  • Arbitration does not allow for a third party to be joint to the proceedings without consent
  • Parties can agree to an appeal procedure in their arbitration agreement. The remedy for a party who is dissatisfied with the arbitration award is limited. The arbitration award of an appeal panel of arbitrators is final.

Matters that cannot be arbitrated are:

  • Any matrimonial cause or any matter incidental to any such cause
  • Any matter relating to status
  • Where a precedent needs to be set (this can only be done by a court)
  • There is no bona fide dispute
  • There is no need for a remedy that arbitration could not achieve such as an interdict or mandatory order
  • It would not be in the public interest for a person to compromise his / her rights

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