What are the costs of litigation compared to mediation?


The benefits of resolving a dispute through mediation rather than pursuing it in court are numerous and – in many instances – extend beyond the monetary cost savings. These advantages can vary from dispute to dispute depending on the complexity of the issue and the parties involved.

Often driving incentive for parties involved in a dispute is that mediation is cheaper. Anyone who has been involved in protracted litigation knows that at the end of the case, be it settled or adjudicated upon by a Court, the bill of costs can be “eye watering.”

Whilst the costs of mediations will vary according to the complexity of the dispute and the time required to have the mediation, the cost will be fixed at the outset in an entirely transparent way and there will be no surprises. Mediation is nearly always a cheaper process than litigating a dispute in court, and remote mediation naturally reduces the costs further, given there are no travel costs or room hire costs.

What is often forgotten when weighing up the cost of mediation versus litigation is the personal cost of litigation. The detrimental impact litigation has on the parties often means that business, social and personal relationships cannot be continued following the court hearing. Once you have endured the stress of giving evidence and been cross examined, with the advocate putting the other sides’ case to you, forcefully or not, you are not likely to want to have anything to do with that person again. You are certainly not going to want to work with or for them, buy or rent anything from them, or engage with them in a personal way. The relationship is likely to the irreparably damaged.

So is mediation going to make any difference? Whilst it’s not guaranteed, there’s at least a chance – a very good chance – of preserving the remaining relationship through mediation.

One of the main benefits of any mediation is experienced when all parties involved hear what each feels the dispute, or problem, between them is. Often, disputes between parties arise as a result of poor communication around an issue or problem, or one party feels that the other doesn't understand why they are aggrieved. Mediation can provide a forum for each side to “hear” what the other side is feeling. An apology, or an explanation, can often go a long way towards the resolution of a dispute between parties.

The lack of the traditional adversarial court processes involving rules of evidence and cross examination are not present in mediation. The mediation is normally conducted in a neutral and more relaxed venue, resulting in reduced pressure on the parties, often leading to a more proactive and positive engagement by all involved.

So remember – the real cost analysis for many mediations, is the likely reduction of the monetary cost, or impact, of litigation. The personal cost can be immeasurably reduced. Ideally, the parties can continue in their business or personal relationship with each other following mediation, but sometimes they can just leave the mediation being able to speak to each other – and that can be the real value.

In summary, the advantages to mediation over pursuing a dispute in court can vary from dispute to dispute, but essentially the advantages over court can be highlighted by:

  • Confidentiality
  • Lower costs
  • A quicker process
  • Less conflict
  • The parties are in control

Written by Michael Bready BL, Mediator & Arbitrator


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