Mediation is more cost-effective and quicker than quarrelling
In litigation, mediation is a quicker alternative than going to court. Most cases of mediation do result in settlement says Asta Siponen, a partner specialised in litigation.
During the coronavirus pandemic, mediation proceedings have many strengths in dispute resolution between companies since court proceedings, even in lower courts, can drag on for a couple of years or even more.
“Settlement and preparations for it can be reached in just a few weeks. Rapid settlement is an enormous benefit for companies, which can clear the matter off their tables,” says Asta Siponen, a partner at Procopé & Hornborg.
Settlement is a considerable cost-saver because, in long court cases, costs can sometimes increase to incredible proportions. The costs of mediation can also be predicted quite accurately, whereas the costs of prolonged court proceedings can be surprisingly high.
Another good side of mediation is that companies participating in it can decide themselves what kind of solution they will accept. When a court decides on a case, there is of course no such privilege. Certainly, for resolution to be possible, you have to be prepared to be flexible in mediation too.
“Another benefit of mediation is that, if it goes well, cooperation between the two parties can be more fruitful than during a dispute that goes on for years. Settlement may also sometimes involve something other than just financial payments,” says Siponen.
A long dispute can weigh on one`s mind
In Finland, mediation is quite a new phenomenon, but it has long traditions in the United States and the United Kingdom. In the United Kingdom, disputes are not even brought to court unless attempts have first been made to settle them through mediation.
In Finland, mediation has grown strongly in litigation cases between private individuals, but companies have been slower to adopt it even though the benefits are clear.
In the preparatory stage, a company considering mediation must present the same questions as one proceeding to court. What is the dispute about, what are the chances of success and what are the risks? It is also worth weighing up the mental costs of the alternatives.
“A dispute that continues for a long time in court may weigh on one´s mind for a long time and with all of the detailed accounts and other reports required to litigate, encumber the normal business of the company throughout the process. This too has financial value,” says Siponen.
Good preparation with risk analyses is important, both for the company itself and the smoothness of the process. If one party has prepared poorly, it will take longer to settle. Well-prepared parties usually succeed in coming to a an agreement after just one or two days. Achieving results can also be fundamentally accelerated if the process is participated by the people who hold the power of decision in the case.
An increase mediation expertise
Mediation expertise has advanced rapidly in Finland. Many district courts have appointed judges specialised in mediation. In the same way, the Finnish Bar Association has trained its members in out-of-court mediation. Higher education and experience in mediation acquired abroad is also available as was thorougly discussed in our breakfast event.
Fundamental to the work of a mediator is not only expertise but also impartiality. The parties must be able to tell confidential things to the mediator who will then guide the process forward with the right questions.
The key thing in terms of success is, however, for the parties to have a genuine desire to reach an agreement and resolve the issue. Experiences both in Finland and abroad indicate that this desire has existed.
“Mediation succeeds in the vast majority of cases, not in all but clearly more than half,” says Asta Siponen.
Mediation in brief:
• Requires an impartial mediator on whom the parties unanimously agree
• Settles many kinds of disputes such as contractual disputes, employment disputes and questions of indemnity
• A quicker and more cost-effective than court proceedings
• Possible in or out of court
• The results of mediation held out of court may be taken to court for confirmation
• Does not constitute a precedent for other disputes
• Requires a genuine desire to negotiate and settle.
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