Through handling countless mediations every year, I understand that not all disputes are created equal – from divorce to business rescue, unruly neighbours, workplace disputes, commercial, insurance and property disagreements – the magnitude, complexity, sector and type can vary greatly and so can your legal fees, which is where Fixed-Fee Mediation makes complete financial sense.
While clients very often will request a cost estimate in litigation matters, it’s very difficult to assess, and the adage of ‘how long is a piece of string?’ comes to mind. Unfortunately, in litigation, whether you are acting for the plaintiff or for the defendant, you are not in control of all the variables which may include delays occasioned by either party, interlocutory applications – this is any application brought before a matter is heard, for things like trial particulars, applications to compel discovery, further and better discovery, delays caused by availability of courts and a general backlog in cases.
In contrast, mediation can be dealt with in most cases within 14 to 30 days and a mediator is in a position to provide a fixed fee quotation for these services, giving certainty to both parties involved as to the expenditure to be incurred. As mentioned in previous blogs and articles, the benefit of mediation, even if it doesn’t result in a settlement between the parties, is that the issues are crystallised and fully ventilated, leaving the parties in no doubt as to what they may be required to prove (and who their witnesses would have to be in any subsequent litigation), and also what the likely costs and process of the litigation will be.
The mediator will not only canvass possible settlements, but will advise that if an agreement is not reached, the likely cost of proceeding to litigation would be R300 000 or R400 000. Added to which, there may be an appeal process – perhaps to a full bench in Cape Town, perhaps then to the Supreme Court of Appeal; a recalcitrant debtor might try to find a constitutional angle which may end up in the Constitutional Court, which will find you many many, years and many, many hundreds of thousands of rands from a settlement. This is what we in the trade call a reality check!
Simply put, the binary system of ligitation is a win/lose situation, whereas with mediation it’s all about how you are going to sort the matter out – and save yourself a whole lot of stress and hundreds of thousands of rand in the process.