INTRODUCTION
Mediation, also known as conciliation in many parts of the world, has a long history in
the diplomatic arena. In the commercial world, interest in it has increased sharply in
recent years. In part, this growth of interest is attributable to dissatisfaction with the
cost, delays and length of litigation in certain jurisdictions. The growth of interest
results also, however, from the advantages of mediation, particularly its appeal as a
procedure that offers parties full control over both the process to which their dispute
will be submitted and the outcome of the process.
Where mediation has been used, it has enjoyed very high rates of success in achieving a
result acceptable to both sides to a dispute. Because it is a relatively unstructured
procedure, however, some hesitate to use it for fear of not knowing what to expect. This
booklet seeks to allay such fears by explaining simply the main features and advantages of
mediation and how mediation under the RNLPCA
Mediation Rules works in practice.
WHAT IS MEDIATION?
Mediation is first and foremost a non-binding procedure. This means that, even
though parties have agreed to submit a dispute to mediation, they are not obliged to
continue with the mediation process after the first meeting. In this sense, the parties
remain always in control of a mediation. The continuation of the process depends on their
continuing acceptance of it.
The non-binding nature of mediation means also that a decision cannot be imposed on the
parties. In order for any settlement to be concluded, the parties must voluntarily agree
to accept it.
Unlike a judge or an arbitrator, therefore, the mediator is not a
decision-maker. The role of the mediator is rather to assist the parties in reaching their
own decision on a settlement of the dispute.
There are two main ways in which mediators assist parties in reaching their own
decision, which correspond to two types or models of mediation practiced throughout the
world. Under the first model, facilitative mediation, the mediator endeavors to
facilitate communication between the parties and to help each side to understand the
other's perspective, position and interests in relation to the dispute. Under the second
model, evaluative mediation, the mediator provides a non-binding assessment or
evaluation of the dispute, which the parties are then free to accept or reject as the
settlement of the dispute. It is up to the parties to decide which of these two models of
mediation they wish to follow. The RNLPCA Arbitration and Mediation Center ("the
Center") will assist them in identifying a mediator appropriate for the model that
they wish to adopt.
Nothing stated during a mediation procedure may be used against a party during an
arbitration of other judicial proceeding. Absent few exceptions, all statements made
during a mediation are privileged communications of settlement. Mediation is a confidential
procedure. Confidentiality serves to encourage frankness and openness in the process by
assuring the parties that any admissions, proposals or offers for settlement will not have
any consequences beyond the mediation process. They cannot, as a general rule, be used in
subsequent litigation or arbitration. The RNLPCA Mediation Rules contain detailed
provisions directed also at preserving confidentiality in relation to the existence and
outcome of the mediation.
HOW DOES MEDIATION DIFFER FROM ARBITRATION?
The differences between mediation and arbitration all stem from the fact that, in a
mediation, the parties retain responsibility for and control over the dispute and do not
transfer decision-making power to the mediator. The objective is peacemaking and
peacekeeping. In concrete terms, this means two things principally:
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In an arbitration, the outcome is determined in accordance with an objective standard,
the applicable law. In a mediation, any outcome is determined by the will of the parties.
Thus, in deciding upon an outcome, the parties can take into account a broader range of
standards, most notably their respective business interests. Thus, it is often said that
mediation is an interest-based procedure, whereas arbitration is a rights-based procedure.
Taking into account business interests also means that the parties can decide the outcome
by reference to their future relationship, rather than the result being determined only by
reference to their past conduct.
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In an arbitration, a party's task is to convince the arbitral tribunal of its case. It
addresses its arguments to the tribunal and not to the other side. In a mediation, since
the outcome must be accepted by both parties and is not decided by the mediator, a party's
task is to convince, or to negotiate with, the other side. It addresses the other side and
not the mediator, even though the mediator may be the conduit for communications from one
side to the other.
Naturally, in view of these differences, mediation is a more informal procedure than
arbitration. Society suffers greatly when peaceful resolution of disputes is not only the
sole the objective, but also within clear sight at all times:
THE FUNCTION OF RULES IN MEDIATION
The RNLPCA Mediation Rules
Mediation is a relatively unstructured and informal procedure in which continued
participation in the process, as well as the acceptance of any outcome, depends on each
party's agreement. Rules thus have a more limited function in mediation than in binding
arbitration. What is that function?
By agreeing to submit a dispute to RNLPCA mediation, the parties adopt the RNLPCA
Mediation Rules as part of their agreement to mediate. Those Rules have the following main
functions:
- They establish the non-binding nature of the procedure (Articles 13(a) and 18(iii))
- They define the way in which the mediator will be appointed (Article 6)
- They guide the parties as to the way in which the mediation can be commenced and the
process can be established (Articles 3 to 5 and 12)
- They provide the parties with assurances about the confidentiality of the process and
the disclosures made during the process (Articles 14 to 17)
- They determine how the costs of the procedure will be borne by the parties (Article
24)
FOR WHICH DISPUTES IS MEDIATION APPROPRIATE AND WHAT ARE ITS ADVANTAGES?
Mediation is not a suitable procedure for settling disputes in all cases. Where
deliberate, bad-faith conduct is involved, mediation, which requires the cooperation of
both sides, is unlikely to be appropriate. Similarly, where a party is certain that it has
a clear-cut case, or where the objective of the parties or one of them is to obtain a
neutral opinion on a question of genuine difference, to establish a precedent or to be
vindicated publicly on an issue in dispute, mediation may not be the appropriate
procedure.
On the other hand, mediation is an attractive alternative where any of the following
are important priorities of either or both of the parties:
- minimizing the cost-exposure entailed in settling the dispute;
- the maintenance of control over the dispute-settlement process;
- a speedy settlement;
- the maintenance of confidentiality concerning the dispute; or
- the preservation or development of an underlying business relationship between the
parties to the dispute.
The last-mentioned priority, in particular, makes mediation especially suitable where
the dispute occurs between parties to a continuing contractual relationship, such as a
license, distribution agreement or joint research and development (R&D) contract,
since, as mentioned above, mediation provides an opportunity for finding a solution by
reference also to business interests and not just to the strict legal rights and
obligations of the parties.
AT WHICH STAGES OF A DISPUTE CAN MEDIATION BE USED?
Mediation can be used at any stage of a dispute. Thus, it can be chosen as the first
step towards seeking a resolution of the dispute after any negotiations conducted by the
parties alone have failed. Mediation can also be used at any time during litigation or
arbitration where the parties wish to interrupt the litigation or arbitration to explore
the possibility of settlement. Another common use of mediation is more akin to dispute
prevention than dispute resolution. Parties may seek the assistance of a mediator in the
course of negotiations for an agreement where the negotiations have reached an impasse,
but where the parties consider it to be clearly in their economic interests to conclude
the agreement (for example, negotiations on the royalty rate to apply on the renewal of a
license).
WHAT TYPES OF DISPUTE CAN BE MEDIATED AT RNLPCA?
The Center offers services for mediation of many different forms of disputes, that is,
disputes exploring the spectrum from local, regional and national environmental disputes
to property or commercial transactions and relationships. Common examples of such
environmental relationships involves industrial property use balanced against the health
of a community. Commercial transactions and relationships include patent, know how and
trademark licenses, franchises, computer contracts, multimedia contracts, distribution
contracts, joint ventures,
R & D contracts, technology-sensitive employment contracts, mergers and
acquisitions where intellectual property assets assume importance, and publishing, music
and film contracts.
It should be noted, however, that there is no limitation on the competence of mediators
appointed under the RNLPCA Mediation Rules to deal with different classes of subject
matter. A mediator appointed under the RNLPCA Mediation Rules is competent to deal with
all aspects of any dispute. It is up to the parties to decide whether they consider the
subject matter suitable for RNLPCA mediation.
WHY CHOOSE RNLPCA MEDIATION?
The choice of RNLPCA mediation offers the following advantages:
- no registration fee
- an internationally based independent administering authority with specialized expertise
in the revealed Divine law, ecclesiastical law and its relationship with secular laws,
ordinances and statutes upon a local community, regional, state and national body politic,
- an international list of mediators including persons with specialized knowledge and
experience in the technical, business, environmental and legal subject matters, as well as
experience in international commercial mediation
- flexible Rules with provisions sensitive to the need for the protection of
confidentiality
- where the mediation takes place in Austin, Texas, hearing rooms provided free of charge
where there are two parties and less than five witnesses.
HOW IT WORKS: THE PRINCIPAL STAGES IN A RNLPCA MEDIATION
There are few formalities associated with a mediation. The structure that a mediation
follows is decided by the parties with the mediator, who together work out, and agree
upon, the procedure that is to be followed.
As mentioned above, the somewhat unstructured nature of a mediation can be
disconcerting to those who may be entertaining the idea of submitting a dispute to
mediation, but who may not be sure what to expect. For such persons, some guidance is set
out in the following paragraphs, which outline the main steps in the conduct of a RNLPCA
mediation. The procedure outlined should, however, be understood as being for
guidance only, since the parties may always decide to modify the procedure and to proceed
in a different way.
Getting to the Table: The Agreement to Mediate
The starting point of a mediation is the agreement of the parties to submit a dispute
to mediation. Such an agreement may be contained either in a contract governing a business
relationship between the parties, such as a license, a town, city or county charter in
which the parties provide that any disputes occurring under the contract will be submitted
to mediation; or it may be specially drawn up in relation to a particular dispute after
the dispute has occurred.
The last section of this the accompanying publication entitled "The Center
and Its Services in More Detail" contains recommended clauses for both
situations, which provide a choice between agreeing to mediation alone or agreeing to
mediation followed, in the event that a settlement is not reached through the mediation,
by arbitration.
Starting the Mediation
Once a dispute has occurred and the parties have agreed to submit it to mediation, the
process is commenced by one of the parties sending to the Center a Request for
Mediation. This Request should set out summary details concerning the dispute,
including the names and communication references of the parties and their representatives,
a copy of the agreement to mediate and a brief description of the dispute. These details
are not intended to perform the legal function of defining arguments and issues and
limiting the requesting party's case. They are intended simply to supply the Center with
sufficient details to enable it to proceed to set up the mediation process. Thus, the
Center will need to know who is involved and what the subject matter of the dispute is in
order to be able to assist the parties in selecting a mediator appropriate for the
dispute.
The Appointment of the Mediator
Following receipt of the Request for Mediation, the Center will contact the parties (or
their representatives) to commence discussions on the appointment of the mediator (unless
the parties have already decided who the mediator will be). The mediator must enjoy the
confidence of both parties and it is crucial, therefore, that both parties be in full
agreement with the appointment of the person proposed as mediator.
Typically, the Center would discuss the various matters described in the box opposite
in order to be in a position to propose the names of suitable candidates for the
consideration of the parties.
Following these discussions (which may take place by telephone or in person), the
Center will usually propose several names of prospective mediators, together with the
biographical details of those prospective mediators, to the parties for their
consideration. If necessary, further names can be proposed until such time as the parties
agree upon the appointment of a mediator.
At this stage also, the Center will commence discussions with the parties concerning
the physical arrangements for the mediation: where it is to take place (which will usually
have been specified in the agreement to mediate), a meeting room and any other support
facilities needed.
The Center will also fix, in consultation with the mediator and the parties, an
estimate of raw costs of the mediation. The Center does not charge for the Mediation
Service. However, if any meeting, mediation or arbitration is, at the parties' request,
scheduled to take place outside Austin, Texas, the travel and subsistence expenses of the
Center must be paid, in advance of the meeting, by the parties in equal shares (unless
they agree on some other division of those costs between themselves). Raw costs such
as any translators, stenographers, reporters, copying or other clerical paperwork
including postage, courier services where requested are assessed and paid in advance.
Except in extraordinary circumstances, these raw costs are set forth on the Request for
Mediation Form [See attached].
Initial Contacts Between the Mediator and the Parties
Following appointment, the mediator will conduct a series of initial discussions with
the parties, which typically will take place by telephone. The purpose of these initial
contacts will be to set a schedule for the subsequent process. The mediator will indicate
what documentation, if any, he or she considers should be provided by the parties prior to
their first meeting and set the timetable for the supply of any such documentation and the
holding of the first meeting.
The First Meeting Between the Mediator and the Parties
At the first meeting, the mediator will establish with the parties the ground rules
that are to be followed in the process. In particular, the mediator will:
- discuss with, and obtain the agreement of the parties on, the question whether all
meetings between the mediator and the parties will take place with both parties present,
or whether the mediator may, at various times, hold separate meetings (caucuses) with each
party alone; and
- ensure that the parties understand the rules on confidentiality set out in the RNLPCA
Mediation Rules.
At the first meeting, the mediator will also discuss with the parties what additional
documentation it would be desirable for each to provide and the need for any assistance by
way of experts, if these matters have not already been dealt with in the initial contacts
between the mediator and the parties.
Subsequent Meetings
Depending on the issues involved in the dispute and their complexity, as well as on the
economic importance of the dispute and the distance that separates the parties' respective
positions in relation to the dispute, the mediation may involve meetings held on only one
day, across several days or over a longer period of time. The stages involved in the
meetings held after the first meeting between the mediator and the parties would, where
the mediator is playing a facilitative role, normally involve the following steps:
- the gathering of information concerning the dispute and the identification of the issues
involved;
- the exploration of the respective interests of the parties underlying the positions that
they maintain in respect of the dispute;
- the development of options that might satisfy the respective interests of the parties;
- the evaluation of the options that exist for settling the dispute in the light of the
parties' respective interests and each party's alternatives to settlement in accordance
with one of the options; and
- the conclusion of a settlement and the recording of the settlement in an agreement.
Naturally, not all mediations result in a settlement. However, a settlement should be
achieved where each party considers that an option for settlement exists which better
serves its interests than any alternative option for settlement by way of litigation,
arbitration or other means.
Parties' Private Consultations
Throughout the process of the mediation, naturally each party will wish to undertake,
at various stages, private consultations with its advisors and experts for the purposes of
discussing various aspects of the mediation or of evaluating options. It goes without
saying that such private consultations may occur during the mediation process.
THE MAIN STEPS IN A MEDIATION
The Agreement to Mediate
Commencement: Request for Mediation
Appointment of the Mediator
Initial Contacts Between the Mediator and the Parties
- setting up the first meeting
- agreeing any preliminary exchange of documents
First and Subsequent Meetings
- agreeing the ground rules of the process
- gathering information and identifying issues
- exploring the interests of the parties
- developing options for settlement
- evaluating options
Concluding Meeting
THE LANGUAGE USED IN THE MEDIATION
The parties decide the language in which the mediation will take place. They may choose
a single language or they may choose to use two languages and to have interpretation,
although the latter choice will obviously increase the costs of conducting the process.
SELECTING THE MEDIATOR
Perhaps the most important step in the whole process is the selection of the mediator.
What should the parties consider?
One of the principal functions of the RNLPCA Arbitration and Mediation Center is to
assist the parties in identifying and agreeing upon the mediator. The Center does this
through consultation with the parties and by supplying them with the names and
biographical details of potential candidates for their consideration.
The parties should consider at least the following matters in deciding whom to appoint
as mediator:
-
what role do they want the mediator to play; do they want the mediator to provide
a neutral evaluation of their dispute, or do they want the mediator to act as facilitator
of their negotiations by assisting them in identifying the issues, exploring their
respective underlying interests and developing and evaluating possible options for
settlement?
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do they want a mediator with substantial training and experience in the subject matter
of their dispute, or do they want a mediator more particularly skilled in the process of
mediation? This will depend in part on whether they wish the mediator to play an
evaluative or a facilitative role.
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do they want a single mediator or more than one mediator? In particularly complex
disputes involving very specialized and highly technical subject matter, the parties may
wish to consider having both a subject-matter and a process specialist as co-mediators.
Similarly, where the parties have very different cultural and linguistic backgrounds, they
may wish to envisage two co-mediators.
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what nationality should the mediator have (or what nationalities should the mediator not
have)?
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are the candidates independent, that is, are they free of any past or present business,
financial or other disqualifying connections with either of the parties to the dispute or
with the particular subject matter of the dispute?
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what are the professional qualifications and experience, training and areas of
specialization of the candidates?
THE ROLE OF THE RNLPCA ARBITRATION AND MEDIATION CENTER
The Center performs the following functions as administering authority of a mediation:
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it assists the parties in selecting and appointing the mediator, as described above;
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it fixes, in consultation with parties and the mediator, the fees of the mediator;
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it administers the financial aspects of the mediation by obtaining a deposit from each
party of the estimated costs of the mediation and paying out of the deposit the fees of
the mediator and any other support services or facilities, such as fees for interpreters,
reporters, secretarial, copying and courier where they are required;
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where the mediation takes place at RNLPCA in Austin, Texas, and there are two parties
with less than five witnesses, it provides a meeting room and party retiring rooms free of
charge; where the mediation involves more than two parties, more than five witnesses or
takes place outside Austin, Texas, it assists the parties in organizing appropriate
meeting rooms which are paid for by the parties according to whatever arrangements they
may make;
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it assists the parties in organizing any other support services that may be needed, such
as translation, interpretation, reporter or secretarial services.
WHERE DOES A RNLPCA MEDIATION TAKE PLACE?
The parties decide where they would like the mediation to take place. It is not
necessary for a mediation conducted under the RNLPCA Mediation Rules to take place in
Austin, Texas.
If the parties do decide to conduct their mediation in Austin, Texas, RNLPCA will
provide them with a meeting room and party retiring rooms free of charge where there are
two parties with less than five witnesses. Where the mediation involves more than two
parties, more than five witnesses or takes place outside Austin, Texas, it assists the
parties in organizing appropriate meeting rooms which are paid for by the parties
according to whatever arrangements they may make If the parties choose to conduct their
mediation outside Geneva, the Center will assist them in arranging suitable meeting
facilities.
WHAT DOES IT COST?
No registration fee of the Center is charged for the Mediation Service. However, if any meeting, mediation or arbitration is, at the parties' request, scheduled to take place outside Austin, Texas, the travel and subsistence expenses of the Center must be paid, in advance of the meeting, by the parties in equal shares (unless they agree on some other division of those costs between themselves). Raw costs such as any translators, stenographers, reporters, copying or other clerical paperwork including postage, courier services where requested are assessed and paid in advance. Except in extraordinary circumstances, these raw costs are set forth on the Request for Mediation Form [See attached]
WHO PAYS THE COSTS?
The RNLPCA Mediation Rules (Article 24) provide for the costs and all other
expenses of the mediation) to be borne in equal shares by the parties. The parties are
free to agree to change this allocation of costs.
WHY TRY IT?
For those parties for which mediation is a new procedure and which may wonder what
benefits mediation offers, two factors can usefully be considered:
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Where mediation has been used, it enjoys remarkably high rates of success, given its
non-binding nature. Indeed, on one view, mediation never fails, even if a settlement is
not reached, because the parties will always come away knowing more about the dispute and,
probably, at least having narrowed the issues in question.
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A second factor to be taken into account is that the commitment to mediation involves a low
risk. The parties remain always in control of the dispute. Each party may terminate
the mediation at any stage, if it feels that it is not making any progress, that the
procedure is becoming too costly, or that the other party is not acting in good faith. The
commitment to mediation is thus controllable at all stages.
GETTING A DISPUTE TO MEDIATION: RECOMMENDED CLAUSES
The Center has established a recommended
contract clause for the reference of future disputes under a contract to mediation
under the RNLPCA Mediation Rules. These are attached to the accompanying publication
entitled: "The Center and its Services in More Detail."
The Center has also established a recommended submission agreement
for the reference of an existing dispute to mediation under the RNLPCA Mediation Rules.
These are attached to the accompanying publication entitled: "The Center and
its Services in More Detail."
TRAINING PROGRAMS AND PUBLICATIONS
The Center organizes training programs for mediators, as well as conferences on various
aspects of the resolution of intellectual property disputes. It also has available a
number of publications, including the RNLPCA Mediation Rules, the Guide to
RNLPCA Mediation and the publication of the proceedings of the RNLPCA
Conference on Mediation.