Mediation or arbitration can rapidly settle disputes

Eugene Bester, director in the dispute resolution practice at Cliffe Dekker Hofmeyr, says that one of the benefits of this is that both parties agree on the mediator or arbitrator, who in most instances is a senior counsel or retired High Court judge.

"The decision is usually made fairly quickly, because both parties can present lists of their preferred candidates and, most likely, the list on both sides contains the same people - known experts in the commercial legal sector. However, if the parties can't agree on a mediator or arbitrator, they can either go to the Bar Council of SA or the Arbitration Association of SA, which will appoint the mediator or arbitrator.

"The process of mediation and arbitration is not necessarily cheaper than taking a legal matter to the High Court, because the cost of the mediator or arbitrator and other associated costs must be factored into the equation and this is not the case if the matter is dealt with in the High Court," says Bester.

"However, in the long run the process will in many instances be resolved more quickly, with less instances of appeal, and this has the potential of making it a more cost-effective option.

"A High Court decision can be the subject matter of various appeals in the High Court or the Supreme Court of Appeal, which usually is a costly affair, whereas an appeal in an arbitration goes to the appeal tribunal, if the parties have agreed on a right to appeal. This is a simpler process."

Bester says that parties cannot appeal against a mediation because if it is successful, both parties will have signed a settlement agreement, and have therefore agreed to the resolution of the dispute.

"Mediations are successful 75% of the time, but it depends on the mind-set of the parties. They have to want to resolve the dispute for the mediation process to work, because there will always be a compromise on both sides in the settlement."

Arbitration is more adversarial than a mediation - cross-examination occurs and lawyers can tear into a witness during the process. Arbitration can follow from unsuccessful mediation if the parties have agreed to go that route. If there was already a High Court summons before mediation occurred, then litigation in the High Court will continue.

Source: Business Day via I-Net Bridge