Assisted negotiation can be a time- and cost-effective way of solving business disputes outside of court, writes Fiona Reddan

MEDIATION IS increasingly being used to resolve Irish business disputes, as it can save money, sustain important business relationships and preserve reputations.

"Solving disputes outside of court is time- and cost-effective and reduces the reputational impact a drawn-out legal dispute can have for companies," says Joe Kelly, a partner in the AL Goodbody litigation and dispute resolution department.

Mediation is essentially a form of assisted negotiation, and involves the two parties to the dispute agreeing to participate in mediation run by a qualified mediator.

According to Kelly, although alternative dispute resolution and mediation methods are already being embraced by Irish business, they still have some way to go. The number of international disputes in which Irish companies are involved, and which are resolved here by way of mediation, is still small by international standards, although it is growing.

Nevertheless, mediation is becoming more mainstream than it used to be and is increasingly used to solve disputes with regards to big commercial and small consumer claims, family breakdown, industrial disputes, medical claims and property disputes (especially boundary disputes).

Earlier this year, broadcaster Pat Kenny and his neighbours Gerard and Maeve Charlton used mediation to resolve their land dispute.

Similarly, in 2006 a case between The Dubliners and their record label EMI was settled by mediation two days after it was first listed in the commercial list of the High Court.

"People have taken encouragement from events such as the Belfast Agreement, which has been important in terms of shaping people's thinking," says Kelly. "People now think that, 'If they were able to work it out using George Mitchell as a mediator, why can't we?' "

When the Commercial Court was established in January 2004, its rules provided for mediation, and while the use of mediation took some time to get traction, it is now used more frequently.

"Most significantly, lawyers disputing cases in the Commercial Court have developed an understanding of mediation partly because Mr Justice Kelly so frequently 'suggests' that it is an option which should be tried as an alternative to a case going to trial. The practice has now developed such that any company considering its options by reference to the Commercial Court will, as a matter of course, be advised on the merits of mediation," says Kelly.

Most cases are suitable for mediation, he says, although he rules out both judicial review cases and criminal cases. The court can either suggest that parties seek mediation, or they can look for it themselves. Some contracts now state that "in the event of a dispute, parties must go to mediation".

Mediation also suits people who want to put forward their case themselves. "You can speak for yourself at mediation. Rather than have lawyers do all the talking, it's the business people who have the opportunity to do so," Kelly continues.

"Clients can get involved in crafting their own solutions in the mediation process, and those solutions are generally more creative than with litigation, where options available to the judge are restricted.

"What is encouraging is the readiness of Irish business people to embrace new methods of resolving disputes. That openness has been encouraged by Government recognition and support of arbitration and mediation in legislation," says Kelly.

In July, the Law Reform Commission published a consultation paper on alternative dispute resolution, as part of its efforts to reform the main processes of alternative dispute resolution.

The main recommendations of the paper include the need for a general statutory framework that defines clearly what is meant by mediation as well as conciliation, and the ability of a court to enforce an agreement made at mediation or conciliation.

The first case to go to mediation was a commercial property dispute in 2005. Kelly worked on the case, and he says that mediation helped bring a long-running dispute to an end in just three weeks.

This speedy resolution is a major advantage of mediation versus the traditional route of bringing a case to court. In the High Court, cases take over a year to be heard, while the waiting period in the Commercial Court is 11-12 weeks. Another advantage is the lower costs associated with mediation - a mediator typically charges about €6,000 a day - and the confidentiality such an agreement offers.

"Mediation isn't a public forum, so you can craft a resolution by means of a binding agreement which doesn't need to be published," says Kelly.

In addition, parties involved in the dispute can get a mediator skilled in their particular area.

For example, if the dispute relates to trademark/intellectual property issues, then a mediator skilled in this area can be appointed.

It should be remembered, however, that not all meditations end with a settlement, and the case may be referred back to court. If the parties do reach an agreement, the terms of that agreement then becomes final and binding on the parties.