Module_1

MODULE – 1

INTRODUCTION TO MEDIATION

This module serves as a primer in understanding the concept and process of ‘Mediation’, an
emerging and popular recourse to traditional litigation process. Mediation is gaining significant
popularity both in the domestic and international sphere for the variety of benefits it offers in
comparison to the traditional approach.

The module shall proceed in the following manner:

First, part 1.1 shall explain the background that led to the emergence of mediation and explain
briefly the problems associated with traditional court room litigation. Second, Part 1.2 shall
briefly lay out the alternatives that have developed to court room litigation. Part 1.3 shall
explain what mediation entails and the important features associated with it. Part 1.4 examines
a few global trends associated with mediation.

1.1 BACKGROUND

Dispute Resolution is a process that is familiar to people in people in most walks of life. A
dispute can arise between parties such as individuals, companies, between individuals and
government etc. A dispute is often unavoidable despite the best efforts of parties to avoid it.
The most popular method available to settle disputes is through litigation, i.e., through courts
and this process is often very lengthy. It involves the following major steps.

• The party to a dispute who wishes to approaches a lawyer or a legal practitioner
licensed to practice at courts

• Such a practitioner then appears before the court on behalf of the parties at a date and
time scheduled by the Court.

• The Court hears the other party against whom such a dispute is brought.
• The Court allows both parties to produce evidence and then carefully assesses the

“rights” of the parties.
• The assessment of such rights needs to be in consonance with the applicable laws and

a Court may not deviate from the same.

• The Court finally pronounces it decision after a careful perusal of the rights, issues and
laws involved.

While the above steps may seem simple enough for people to pursue, it has three major
drawbacks. The following paragraphs explain these commonly associated problems with
litigation very briefly.

First, court proceedings are often very lengthy and time consuming. They involve a number of
procedural steps such as sending notices, parties not appearing during scheduled dates and
hence hearings getting postponed, lack of availability of the lawyer on scheduled dates etc.
Such delay can be detrimental in the event of certain issues that require immediate dissolution
such as child custody, family matters and other commercial matters whose course of business
depends on the outcome of disputes and the delay in disputes might result in significant loss of
revenue for such companies.

Second, traditional methods followed through court proceedings can often be very expensive
for the parties. These costs are often referred to as “transactional costs” in economic terms and
refers to the money spent in order to ensure the fruition of their rights. These costs involve the
fees of lawyers which is often fairly high, court fees and ancillary expenditure such as
documentation charges, traveling to courts regularly and bribing the court clerks in the Indian
setting.

Third, the judges at courts are statutorily bound, in that, they have to stick to the applicable law
in the disputes and must apply only the law to solve the disputes. This approach is called the
rights-based approach and will apportion or decide the dispute depending on the legal rights
of the parties involved. Let us understand this through an example. Let us imagine that there
are 2 brothers who are claiming title over an orange fruit. This orange is a co-parcenery
property and both the brothers, being the only heirs, have equal right on the orange. The Court
in this instance will order for the orange to split between the brothers as both brothers have
equal rights in the same.

Lets us contrast the above with a situation where an interest-based approach where the
interests of the parties and not their rights are ascertained. Let us imagine we tried to delve
deeper into why the brothers wanted the orange and on examining we find that one brother
owns a juice manufacturing company and hence requites the pulp of the orange and the other

brother is the organic cosmetics industry that requires the peel of the orange. Therefore, an
economical approach towards splitting the orange between the two brothers is by assessing the
interests and in this case, giving one brother the pulp of the orange and the other, the peel. The
Court does not delve into the interest and apportions the orange equally between them as they
both have rights to half the orange. This is one of the major drawbacks of court room litigation.

1.2 ALTERNATIVES TO COURT ROOM LITIGATION

Given the many drawbacks of traditional court room litigations Alternative Dispute Resolution
Processes (also known as ADR) are now gaining popularity. These processes seek to
circumvent the court processes and allow for settling disputes without litigation. Popular ADR
methods include.

• Arbitration
• Conciliation
• Negotiation
• Mediation
ADR procedures are usually less costly and more expeditious. They are increasingly being
utilized in disputes that would otherwise result in litigation, including high-profile labour
disputes, divorce actions, and personal injury claims. One of the primary reasons as to why
parties turn to ADR proceedings is that, unlike traditional court room litigation, ADR
procedures are often collaborative and allow the parties to understand each other's positions.
ADR also allows the parties to come up with more creative solutions that a court may not be
legally allowed to impose.

1.3 WHAT IS MEDIATION

Broadly, ‘Mediation’ can be defined as a dispute resolution process that involves a procedure
where a neutral third-party mediator assists parties to a dispute discuss, negotiate and reach an
amicable solution. The mediator assists in ensuring that the parties come together, in a private
and confidential environment. Each party is given an opportunity to be heard and put forth their
versions of the dispute and they choose to have a lawyer represent them in such cases.
Alternative Dispute resolution methods, particularly Mediation is very nascent in India and in
many jurisdictions across the world and there is a lack of awareness amongst the common
masses regarding the same. This results in them turning to lengthy and expensive court

proceedings as they believe that is the only remedy for their disputes. Mediation, however,
must be an alternative that needs to be explored as it offers significant benefits over other
dispute resolution processes. It is cost-effective, hassle-free and a time saving process that
allows parties decide a mutually beneficial outcome in a co-operative manner with the help of
a neutral third-party mediator. Therefore, in mediation, the decision-making power with respect
to the dispute rests with the parties.
Mediation in India is of two kinds. First, a court referred mediation process where the courts
refer the parties appearing before them for mediation. Most jurisdiction have this sort of
requirement and in India courts refer disputes to Mediation as per Section 89 of the Civil
Procedure Code, 1908, and is often done in cases of matrimonial disputes. Second Private
Mediation, where a mediator is voluntarily appointed by any party such as companies,
individuals and government bodies to help arrive at amicable solutions to their disputes.
Besides being a cost and time effective process, mediation also ensures confidentiality of
proceedings and is hence is also perfectly suited for highly sensitive disputes.

The following are the main features of mediation:

a. Involves two or more parties in dispute over one or more issues.

The parties are referred to as the mediation parties and are the ones that bring the dispute
to a mediator. These parties either have rights-based or interests-based claims in the dispute.
It is important for the parties to stay calm and compose, be open minded and be
collaborative in finding solutions to ensure a better outcome at the Mediation process.

b. Can entirely voluntary or court mandated

Some parties may choose Mediation voluntarily as it offers many benefits to the. A
mediation is often preferred in sensitive issues where parties want to preserve their
relationships after the dispute resolution. They believe that these disputes are often a minor
roadblock in their otherwise successful relationship with other parties. Disputes where
parties voluntarily wish to mediate include where parties have had a long-term business
relationship with one and other, brothers and sisters who want to ascertain shares in co-
parcenery property and other family disputes were parties wish to remain amicable with
one and other after the resolution of the dispute.

As explained previously, courts may also recommend parties to a dispute to first go through
a mediation process before attempting to go to for an adversarial process. The courts may
do so in order to ease the burden on courts or taking into account the sensitive nature of the
issues at dispute.

c. Involves a third-party neutral mediator

Module 5 of this course shall deal extensively with the Mediator’s code of Conduct. This
section shall briefly highlight the importance and nature of role played by the Mediator.

The main feature of mediation is that there is a third party who is neutral and is working
collaboratively with the parties to reach solutions and the mediator by far can take many
steps to ensure this process. One of the fundamental assumptions on which the practice of
mediation is build, is the impartiality of the third-party mediator. The mediator is not supposed to
favour, support, or demonstrate a preference for the position of one party over another. Impartiality
and neutrality are considered the “critical defining characteristics” of an independent mediator.
Mediator is expected to take on an impartial role and facilitate dispute resolution between the
parties, in order to help them reach “a voluntary, mutually acceptable resolution of some or all of
the issues of their dispute”.

Due to this description, the mediator has a very sensitive and difficult job. S/he should do
their best in order to empower, respect and encourage parties and preserve their objectivity
and impartiality, while at the same time carry out their own role effectively. The key is for
the mediator is first make the parties come out from a hostile state of mind that has grown
due to the dispute and move the parties through the mediation process in a rational way
based on self-interests as opposed to their rights. In the event the mediator has any interest
in the outcome of the given dispute, the Mediator must recluse him/herself from the process
and advise the parties to appoint another mediator.

The mediator must be skilled verbally to ensure s/he is being able to guide parties without
appearing to be coercive towards outcomes and must be cognitively trained to understand
and then make the parties realize their interest. Therefore, in mediation, parties begin by
providing their own account or frame of the dispute. The mediator then uses the technique
of reframing to “alter the language used to describe the dispute” as well as the
“perceptions, and current frames of the behaviour, attitudes or issues in the dispute”

Further, it is an accepted trend for mediators use a variety of tools and techniques to impose
direct and indirect pressure on the parties to settle. To bring the parties to settle the dispute,
the mediator has to get them to accept that a settlement is a better option than litigation, in
which the parties incur significant costs in time and expenses. To achieve this goal, the
mediator has the power to direct the parties by “focusing discussion, procedurally and
substantively, toward settlement”

One more powerful tool that a mediator has is the right to call for a caucus. A caucus is a
private discussion that a Mediator has with one of the parties to be able to better understand
the real interests of the parties. Sometimes parties are hesitant to reveal their real underlying
interests during the mediation process in front of the other party. Therefore, a private caucus
is often very beneficial for the mediator to understand the same.

The duty to maintain confidentiality is perhaps the foremost and most important obligation
that the mediator has. The mediator must remain confidential about the information
obtained in the caucus from one party and generally refrain from discussing any details
about the mediation process with people outside the mediation process.

d. The presence of legal representatives is optional

Unlike traditional court room litigation, the presence of legal representatives is optional as
mediation does not necessarily involve the determination of rights of a party as is primarily
focussed on determining the interest of the parties. Therefore, clients take an active role in
such dispute resolution and the presence of legal representatives is optional. Even present,
the legal representatives simply offer assistance on legal problem or issue that may arise in
the process of mediation. Further, parties to a mediation can choose the rules of mediation
that govern them or ensue the process on their own rules. This minimizes the role and costs
associated with legal representatives.

e. The decision of the mediator is not binding

This feature of mediation is a double-edged sword. Parties are at their will to walk out of a
mediation process if they believe that is outcome is unfair or is not economically beneficial
for them. Therefore, the non-binding nature of the mediation process often attracts parties
to try this method before resorting to court litigation.

It may be a drawback as some parties may then look at this process as inefficient and as an
unnecessary step as the parties may walk out at any point in the process.

f. The procedure confidential

The main allure of this process is that it is confidential in nature. The presence of a dispute
may cause unnecessary loss of reputation and irreversible damage to a company’s brand
image or to families. The confidential nature of this process therefore allows parties to settle
such disputes without risking the loss of such reputation.

g. Mediation cannot be done in cases involving crimes and penal consequences

Crimes are generally regarded as offences against the society as whole and it is one of the
sovereign functions of the State to prevent and punish such crimes. Therefore, this function
cannot be delegated to mediators.

Therefore, mediation is largely undertaken in civil disputes that involve personal injury or
monetary and property claims.

1.3 GLOBAL TRENDS IN MEDIATION

Mediation is nascent in most countries, jurisdictions across the world grapple with difficulties
with respect to mediation issues such as jurisdictional claims, enforcement and
implementation. While many jurisdictions have legislations or statutory provisions and rules
regarding mediation, these cannot cater effectively to international mediations. These involve
jurisdictional barriers and therefore may not serve as the most efficient recourse especially in
situations where there can be more than two parties to a dispute. Therefore, many global forums
are emerging in order to facilitate and offer assistance with respect to mediation specifically
commercial mediation which are international in nature. Parties submit to the rules and
jurisdiction of these forums and a mediator is thus appointed by the forum to assist the
resolution of the dispute. A fee is paid to the institute/forum by both parties for the service
rendered. Some of these global forums include

• The International Chamber of Commerce
• The Singapore International Arbitration Centre
• International Mediation Institute

• Indian Institute of Arbitration and Mediation.
Mediation is growing to be extremely popular and the WIPO (World Intellectual Property
organisation) in its survey has concluded the same. The following is an extract of the survey
that documents the reasons for its popularity.

Therefore, it is evident that Mediation as a dispute resolution process is emerging as an
attractive option for parties that are interested in quicker and more efficient outcomes of the
disputes. This module served as an introductory chapter to mediation. The following modules
shall address other important issues associated with International Mediation in a detailed
manner.