Business Law Is Becoming Increasingly Research Paper

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It in this manner, therefore, that mediation is preferable.



Acting as a bridge between the parties, the mediator, arbitrarily, assumes either a purely facilitative role in which he restrains himself from interfering, or serves as an evaluator where he evaluates the nuances of the case and recommends a basis for settlement. However -- and this is where mediation differs from arbitration -- the mediator is limited from mandating a particular outcome which causes the mediation process to manifest itself as inherently non-binding 14.

A creative mediator practices extremely acute listening skills in order to tease out the interests that are most important to each party. To that end, he or she will identify different preferences amongst the parties and design a package where each party receives what it values most and concedes what it values less than the other party.

Focus will be not only on the interests and relationship of each party but also on cross-interests and cross-relationships that exist within the various departments and divisions of, for instance (taking the case of the oil and gas company), the lesser, as well as the inter-family or other interests that may exist, for instance, amongst the lessee. The mediator looks into the internal organizational processes and identifies potential blockages, bringing these open to the various parties and encouraging them to resolve these issues.


The procedure for mediation, often, differs from one mediator to another depending on the mediator's specific style and personality. On the whole, however, mediation commonly includes the following stages:

There is a controversy between two or more parties and a mediator is brought in to convene, to listen, to help the parties arrive at a mutually agreeable form of solution.

Each of the parties explains and details their story

The issues are identified by a facilitator

Respective interests and objectives are clarified and abundantly specified.

Mediator helps parties perceive subjective evaluations in a more objective manner.

Mediators helps parties arrive at options

The facilitator, too, assists parties in evaluating strengths and weakness of their various options and assess potential effects of these options

Proposed solutions are adjusted and refined

Agreements are finally drawn up and implemented in a formal draft. 15

At times, however, mediation may prove unsatisfactory in that the mediator is considered subjective by one of the parties, or complaints remain unresolved, or other issues emerge. In that case, issues not resolved by mediation are referred in court (via a process called litigation) and addressed by a magistrate, judge, or jury. Similarly, parties demanding a follow-up on mediation can also bring their complaint to court where their issue is addressed in a similar manner.



Not all disputes lend themselves well to mediation.16 Both parties, for instance, have to be open to mediation, as well as each either possessing legal representation or neither possessing legal representation at the time of their meeting a mediator. (if each has a legal representative, both representatives should be present during the sessions).

Finally the legal capacity of the parties must, of course, be considered before mediation is entered upon. Mental illness or disability and, of course, the age of a minor preclude mediation from serving as an option. In such a case, alternatives to mediation consist of the following options each of which will be discussed below17.



Mediation differs from arbitration in that whilst the mediator does not impose a solution on either one of the parties, an arbitrator does, and this decision is recognized by the court and is legally binding.

The arbitrator hones in on the prime issue of the conflict, and, in the event that negotiation and mediation fail, actively steps in to resolve the conflict. He or she then renders a written report presenting her decision, which, then, becomes binding and resilient to appeal or to judicial review.

Arbitration has its advantages in that it offers a more relaxed and, therefore, less-stressful environment than does litigation. Its rules of evidence are more realized than are those, for instance, of mediation or counseling. It is less adversarial than is litigation, and there is more open dialogue between the arbitrator and the respective parties than there is in a litigating environment. More so, since the arbitrator adopts an interventionist approach, the entire program is most effectively slanted to settle disputes in a cost-effective and time-reducing manner, and, in this way, it is similar to that of mediation. Its benefits are auspicious for the underrepresented businessperson who benefits from its relaxed rules of evidence and from its arbitral setting, and he, therefore, has a better opportunity to more fully and confidently present his case. On the other hand, since arbitration is a more structured program than negotiation or mediation, it can be more legally challenging for the individual since arbitration presents more procedures and obstacles than mediation does thus possibly intimidating the untrained business person in communicating her case. Finally, since the arbitrator's decision is binding, this can be both advantageous and disadvantageous for both parties concerned: advantageous in that it provides closure to the case, whilst disadvantageous in that it lacks flexibility to re-open or maneuver if necessary, and the arbitrator's decision may be seen as unjustified and biased to one or more of the parties18.

Although arbitration is valued in that it is generally considered time eliminating, large and complex cases can manifest the same costly and time-consuming characteristics that are manifest in litigation thus arbitration may provide little improvement in that area.

Arbitration (otherwise known as binding arbitration) is generally conducted in front of one or three arbitrators and often resembles a mini-trial with rules of evidence. More formal than mediation, it is less costly and less time-consuming than litigation and generally stands as bridge between the two 19.

Occasionally, mediation and arbitration are conjoined with a different individual representing the part of each.



The conduct and operation of a lawsuit is called litigation. The only manner in which litigation may resemble mediation is that it is a form of dispute resolution, otherwise it is utterly opposite in that mediation seeks to empower parties to arrive at a win-win solution formed between themselves with the aid of a facilitator, whilst litigation involves a third party (the judge, attorney, or jury) intervening and imposing a decision that will be unsatisfactory to, at least, one of the involved members.

Technically, litigation involves procedures where a plaintiff who claims to have incurred damages as a result of a defendant's actions (or has another complaint directed to the plaintiff) demands a legal and equitable remedy. If the plaintiff is proven legally justified, the defendant is compelled to follow the court's decision in redressing the plaintiff's complaint. Litigation involves court orders generally enforcing a right, awarding damages, and imposing an injunction to correct, prevent, or compel a particular act. Finally, a declaratory judgment may be issued to prevent future discords.

Although litigation is conventionally used and accepted, mediation is becoming increasingly accepted as popular and the distinction between the two categories is gradually growing, with the courts often referring parties to mediation20.



Mediation shares close family relationships with a similar term 'conciliation' 21. The difference between the two is that whilst conciliation implies a profound knowledge of the subject with deliberate guidance often included in sessions, mediation simply implies impartial guidance of a third-party who attempts to help involved members understand each other and reach some sort of mutually beneficial practical and lasting agreement. Mediation, therefore, is purely facilitative with no advisory role.

Collaborative law, another option, may serve as transition between mediation and litigation where each side has a counsel representing its needs. This is most often conducted in divorce proceedings, where, rather than break up in an oppositional manner, documents are drawn up consensually and together.

Counseling is another option. Counseling and mediation share certain common characteristics22 but are, fundamentally, divergent in that a mediator is supposed to be impartial and nonadvisory, whereas a counselor may play a more supportive role when necessary. Other differences include the fact that the counselor is focused on self-growth for the various parties; mediation works with both parties, whereas counseling may work with the one member who agrees to proceed; and in that manner, a mediator expects both parties to be present so that they can negotiate face-to-face, whereas a counselor may see each party separately at specific intervals.



The conventional manner in which oil and gas companies have generally settled disputes has been litigation. At its easiest, the industries have often relied on institutions and procedural rules formulated by international bodies such as the Paris-based International Chamber of Commerce, UNCITRAL, the Stockholm Chamber of Commerce, the London Court of International Arbitration or the World Banks International Center for the…

Sources Used in Document:




Barclay, T. New Methods of Adjusting International Disputes and the Future London, Constable, 2008.

Boulle, L. Mediation -- Principles, Process, Practice, Chatswood, LexisNexis Butterworths, 2005

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