In this article, we highlight the advantages and disadvantages of mediation.

Advantages

  1. Quick & Flexible
    Mediation is quick and flexible, as it can be conducted anywhere and at any time suitable for the parties. Since the process involves the mediator assisting parties to reach a common goal, the process can be quicker and more flexible compared to other methods of dispute resolution.
  2. Joint Objective to Settle
    Parties agree to mediate with a joint objective to settle.  When parties agree to mediate, they have agreed in principle that an amicable settlement is a possibility. Negotiations can then be based on parties’ interests and needs, rather than about the merits of the case which are usually very contentious.
  3. Cost Saving
    Mediation can save parties’ cost, since it is much cheaper than having to litigate a dispute to finality.
  4. Closure
    After mediation, can walk away and leave with closure, allowing them to move on to other things without the trouble of a dispute hanging over their head for years to come.  In business, time is money, so the closure of a dispute is beneficial to all parties.
  5. Saving Judicial time
    As the mediation process does not require parties to litigate, it would save judicial time.  If cases are settled early through mediation, there will be fewer cases before the Courts, which will reduce backlog and allow smoother administration of justice.

Disadvantages

  1. Results are not guaranteed
    As mediation involves a process of negotiation, parties may not agree to the proposed terms and the entire mediation process may fall apart. This would leave parties having to incur time and expense without having any positive results. 
  2. Withholding of Information
    A party may not be transparent during the mediation by withholding important information. The truth of a certain fact or matter may not be revealed, unlike in a court or arbitration process where there are disclosure requirements and assessment of evidence is key.
  3. No discovery process
    Further to the above, if one party cannot address the case / assess the remedies it needs without first receiving information from the other party, there is no way to compel disclosure of such information. The party seeking disclosure must rely instead on the other party’s good faith, which might be sufficient.
  4. No formal process
    As mediation is informal, the lack of such formal rules can be a disadvantage as much as an advantage.  The disadvantage of informality is that it is often difficult to predict how a mediation will turn out. Further, if the mediator is not skilled or experienced, he could make the process cumbersome and unhelpful.
  5. No Consideration of Merits
    A mediator makes no findings or rulings on the merits. If parties are seeking “vindication” (ie: being proven right in a ‘court of law’) on moral grounds or based on principle, a mediation will not achieve this goal.

Mediation remains a key alternative in resolving disputes. Its benefits can outweigh its limitations, as parties have a chance to settle the dispute without getting entangled in protracted court or arbitration proceedings. However, it is equally important to consult a professional’s opinion on your dispute before agreeing to mediate a matter.

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This article was written by Lim Zi-Han (Senior Associate) from Donovan & Ho’s dispute resolution practice. 

Donovan & Ho is a law firm in Malaysia. Our dispute resolution provides advice and legal representation in the civil and industrial courts. We also represent clients in both domestic and international arbitration, as well as other forms of alternative dispute resolution. Our experienced lawyers are also able to assist in commercial and civil disputes (such as debt recovery, shareholders’ or directors’ disputes, breach of contract and claims for injunctive relief), constructive disputes (arbitration and/or adjudication proceedings, disputes relating to delays, liquidated damages, defects and rectification work) and employment disputes (unfair dismissal claims, judicial review proceedings, and employment-related civil claims). Have a question? Please contact us.

 

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