Mediation: Resolving disputes in a timely, cost-effective manner

Overcoming challenges is part of what contributes towards the satisfaction of commercial success, but problems and issues that emerge need not be as obstructive as they often appear, if the right solution can be found. Meeting this challenge, reducing the cost of business and improving the business environment for firms operating in the GCC led to the formation of the Bahrain Chamber for Dispute Resolution (BCDR), which was established in 2010 in partnership with the American Arbitration Association (AAA). By offering a one-stop shop for alternative dispute resolution services, the BCDR-AAA is a key pillar of Bahrain’s business and investment environment.

CHAMBER SUPPORT: Currently, the BCDR-AAA is dramatically up-scaling its mediation services, a form of resolution ideally suited to the Gulf region, with the potential to fundamentally change the way that people approach disputes and increase resolution, in the interests of both parties. Disputes are rarely cut and dry, black and white cases. Meditation respects the views of all parties and is focused on the need for a resolution that meets the agreement of all parties, allowing them to move on, maintain relationships and concentrate on the principal aims of their business.

Mediation is in practice a “facilitated negotiation” process. Placing confidentiality at its core, it requires a highly skilled, independent and neutral third party, who meets with the satisfaction of both parties, to assist the disputants in negotiating a mutually agreed upon resolution to their dispute. In essence, mediation is the enlightened approach to dispute resolution, with an emphasis on achieving a result quickly, with minimal cost. In contrast to protracted legal battles that easily extend beyond months into years, the majority of mediation cases are resolved in a single day.

COST SAVINGS: The cost savings are significant. A study into the growth of mediation in the UK, where many senior QCs are now trained in mediation, showed the dramatic impact that mediation is having on the UK economy. By 2010, the value of cases mediated in the UK was estimated at £5.1bn (BD3.07bn, $8.11bn), Moreover, by achieving early resolution of cases that would have otherwise have been litigated, commercial mediation was estimated to have saved the UK economy approximately £1.4bn (BD84m, $221.8m) a year.

So, the business case for mediation is clear, assuming that success can be achieved, and the success rates are equally compelling. Leading alternative dispute resolution organisations agree that mediation success rates are generally within the 75-85% range.

PROCESS: The whole process of mediation should not take more than six weeks, with the session itself lasting just a day. The cost of mediation, far less than any other dispute resolution route, does depend on the time and claim amount involved. Each party must pay a $250 setup fee and cover the costs of the mediator and conference facilities, with expenses also generally borne by all parties involved.

The mediation session begins with a brief outlining the procedures to follow, ground rules and the emphasis on the confidentiality of the proceedings. Each party is given the chance to describe its respective view of the dispute. The mediator, which can come from the BCDR-AAA’s roster or an independent source, will ask questions to clarify issues for each of the disputants while seeking to define the perceptions of the parties and their interests. The mediator may also make use of “caucuses” – private meetings – with each side in order to seek incremental progress by exchanging settlement offers. The mediator then works towards narrowing the differences between the parties. When the parties reach a settlement, the terms are confirmed in writing by the disputants. Where a result is not achieved, arbitration comes into play. The BCDR-AAA offers the opportunity to bring an imposed decision to a dispute in a relatively timely manner should this be required.

OBG would like to thank Qays H. Zu’bi Attorneys & Legal Bahrain 2012.