What is the process of bringing in a neutral third party to settle a dispute?

Mediation is a voluntary process involving a neutral third-party known as the mediator who helps disputing parties reach an amicable resolution in private and without going to court. It enjoys a high settlement rate and, in many instances, is a cheaper and faster alternative to litigation.

Unlike the highly-charged and adversarial environment of litigation, mediation is a facilitative process which resolves disputes in a confidential and non-confrontational manner. This enables disputing parties to preserve their relationship post-mediation.

The flexibility of the process also gives disputing parties an opportunity to identify and communicate their differences effectively. Parties are guided by the mediator to focus on issues that are important to them that need to be resolved and consider pragmatic solutions which are mutually acceptable.

Mediation as a dispute resolution process caters to a wide range of disputants, from individuals who face disagreements with family members, to former employees or customers who need to seek recourse for a commercial transaction, to businesses dealing with issues involving their suppliers, partners or customers.

All types of disputes, no matter the size of the claim, can be mediated. The exceptions are:

• Criminal cases
• Cases which require a precedent (e.g. a class action situation)
• Cases where only the courts can give an appropriate remedy (e.g. an injunction or a personal protection order)
• Disputes involving public policies

SMC’s mediation fees are generally pegged to the sum of the claim and counterclaim, whether it is above $60,000 or less than or equal to $60,000.

There are also various subsidised schemes jointly developed with key industry partners for disputes in these sectors: private education, media freelancers, intellectual property, tenancy, healthcare and sports.

SMC also has Family Mediation Procedure Rules to resolve matrimonial disputes with the help of a third-party mediator.

The rates vary from scheme to scheme. For more information on SMC’s fees, refer to the fee schedules on the respective services pages.

Benefits of mediation

1. Saves time and money

   At SMC, 70% of all disputes referred to mediation reach full and final settlement. Of these cases, almost 90% are settled within one working day. Sessions can be arranged quickly and, in urgent cases, within 24 hours. This is in contrast with litigation which can be expensive and drawn out, stretching to months or even years.

2. Control over outcomes

   SMC’s mediators help disputing parties arrive at creative and sensible ways to end their disputes. Parties will have control over the outcome of the mediation as they can choose to settle only when they are satisfied with the proposed terms. Once the parties enter into a settlement agreement, the terms will be binding and enforceable in a court of law.

3. Preserves relationships

   SMC’s mediators facilitate open communication between parties and help improve relationships where possible. This strategy is especially useful when parties need to continue to work together.

4. Maintains confidentiality

   Mediation is for parties who value their privacy. Matters discussed in the mediation sessions will be kept confidential. Also, because mediation is a “without prejudice” process, matters discussed behind closed doors cannot be used against the parties in court or in arbitration.

How do I apply for mediation?

Businesses or individuals can download the relevant application form for SMC’s mediation services and return the form to us by email, fax or mail. Click here for forms.

All ADR methods have common characteristics – i.e., enabling the parties to find admissible solutions to their conflicts outside of traditional legal / court proceedings, but are governed by different rules. For instance, in negotiation there is no third party who intervenes to help the parties reach an agreement, unlike in mediation and conciliation, where the purpose of the third party is to promote an amicable agreement between the parties. In arbitration, the third party (an arbitrator or several arbitrators) will play an important role as it will render an arbitration award that will be binding on the parties. In comparison, in conciliation and mediation, the third party does not impose any binding decision.

If all the ADR methods are different, they should not be compared and confronted because in practice, the parties combine the use of these different ADRs. For instance, the parties may stipulate in their contracts that in the event of a dispute they will first submit to an attempt at amicable settlement (conciliation/mediation) and only in the event of failure will they resort to a judicial method of settlement, which may be arbitration or recourse to the State justice system. ADRs therefore come into play at different levels and have a complementary character.

The main advantages of ADR are rapidity, confidentiality and flexibility.

Public courts may be asked to review the validity of ADR methods, but they will rarely overturn ADR decisions and awards if the disputing parties formed a valid contract to abide by them.

Overview

Alternative Dispute Resolution ("ADR") refers to any means of settling disputes outside of the courtroom. ADR typically includes early neutral evaluation, negotiation, conciliation, mediation, and arbitration. As burgeoning court queues, rising costs of litigation, and time delays continue to plague litigants, more states have begun experimenting with ADR programs. Some of these programs are voluntary; others are mandatory.

• Negotiation

Negotiation is the preeminent mode of dispute resolution. While the two most known forms of ADR are arbitration and mediation, negotiation is almost always attempted first to resolve a dispute. Negotiation allows the parties to meet in order to settle a dispute. The main advantage of this form of dispute settlement is that it allows the parties themselves to control the process and the solution. Negotiation is much less formal than other types of ADRs and allows for a lot of flexibility.

• Mediation

Mediation is also an informal alternative to litigation. Mediators are individuals trained in negotiations, who bring opposing parties together and attempt to work out a settlement or agreement that both parties accept or reject. Mediation is not binding. Mediation is used for a wide gamut of case-types ranging from juvenile felonies to federal government negotiations with Native American Indian tribes. Mediation has also become a significant method for resolving disputes between investors and their stock brokers. See Securities Dispute Resolution.

• Arbitration

Arbitration is one of the most emblematic and growing forms of ADR. Arbitration is more formal than mediation and has a lot of similarities with traditional court proceedings, involving limited discovery and simplified rules of evidence (ex. hearsay is usually admissible in arbitration).

Different types of arbitration exist: 

• national arbitration: for example American arbitration, French arbitration or German arbitration which are all governed by different rules enacted by the institutions of each country; 
• international commercial arbitration: usually used to settle disputes that arise from commercial contractual relations between buyers and sellers who are in two different states;
• investor-State arbitration: unilateral referral by private individual investors to an arbitral tribunal against a host State of their investment.​

Other types of arbitration and areas of specialization for this ADR exist, such as construction arbitration, post M&A arbitration, etc.

Arbitration relies on the consent of the parties, therefore the arbitration agreement is emblematic because it is the gateway to the particular system that is arbitration. Prior to the dispute occurring, parties usually enter into a binding arbitration agreement or any other form of agreement with an arbitration clause, that allows them to lay out major terms for the arbitration process (number of arbitrators, arbitration forum; arbitration rules; fees etc.). 

If parties still have disputes about certain terms before entering into an arbitration they can petition to a court to resolve a dispute. Arbitration can be held ad hoc or with the administrative support from one of the institutional providers like American Arbitration Association (AAA) or JAMS when the arbitration is national. 

The arbitration is headed and decided by an arbitral panel or a single arbitrator, depending on the agreement of the parties. Arbitrators do not have to be lawyers, parties can select arbitrators from other fields that they consider more suitable for the resolution of the dispute, which usually occurs when the arbitration deals with a very specialized topic such as construction or pharmaceutical issues. Indeed, parties can for example choose an arbitrator with an engineering background to arbitrate a construction dispute. 

To comprise a panel, either both sides agree on one arbitrator, or each side selects one arbitrator and the two arbitrators elect the third. Arbitration hearings usually last between a few days to a week, and the panel only meets for a few hours per day. The panel or a single arbitrator then deliberates and issues a written binding decision or arbitral award. Opinions are not public record. Arbitration has long been used in labor, construction, and securities regulation, but is now gaining popularity in other business disputes. For national arbitration,

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