ABSTRACT
Introduction There are, besides arbitration, other types of alternative dispute resolution (ADR) 1 that are binding on the parties, such as expert determination and ombudsman schemes. In expert determination, a third party, an expert chosen by the parties, is used to consider the particular matter raised by the parties. The decision of the expert is normally binding. Expert determination clauses are often found in construction contracts 2 and information technology contracts. Cost-effective and quick, the use of ombudsmen is another popular alternative frequently used worldwide for complaints by individuals against particular sectors, such as insurance 3 and banking. In contrast, a non-binding type of ADR 4 that has caused a stir on the domestic and international commercial scene is mediation, or conciliation, as a mode of dispute resolution. 5
Use of a third (neutral) party to aid the contracting parties to iron out their differences and arrive at an amicable solution is the distinctive feature of mediation. Although the terms ‘mediation’ and ‘conciliation’ are used interchangeably here, there is some suggestion that in mediation the third party plays an evaluative role (i.e., by expressing his opinion), whereas in conciliation the role is a facilitative one (i.e., the third party does not advise parties of his own opinion). 6 This distinction is by no means well settled, neither is it widely accepted. For instance, an American writer 7 describes the processes thus:
The Centre for Effective Dispute Resolution (CEDR), 8 a major provider of commercial mediation in England, adopts the term ‘mediation’ to refer to both evaluative and facilitative mediation, 9 even though it promotes facilitative mediation. 10
Since the mediation process does not share the trappings of the judicial or arbitral process (e.g., handing down of awards or judgments, the adjudicative role of the arbitrator or judge), it is not acrimonious in nature. It helps focus the parties’ minds on the nature of the differences, to try to see if they can come to some agreeable arrangement, thus preserving their business relationship. This positive aspect of mediation has contributed to its enthusiastic reception by businessmen, academics and practitioners alike. As The Rt Hon Lord Goff of Chieveley colourfully observed:
Mediation, however, has its fair share of criticisms. For instance, it has been said that prejudice, power imbalance and bigotry are rife in mediation and that most mediations go against the grain of rule of law. 12 It is also said that mediator neutrality is a myth and that the sex 13 and ethnic backgrounds of the mediator and of the participants affect the outcomes. 14 Although it may be the case that exhibition of raw emotion and the making of infl ammatory statements by the parties in the course of mediation (e.g., during their opening statements, or when the parties have been brought together by the mediator for further discussion and problem solving) may not conform to the familiar trappings of legal discourse, in most cases, parties are aware of and informed by the framework of available legal solutions. In most cases involving commercial disputes, parties are
accompanied by their legal advisers. Moreover, the advantage of mediation is its fl exibility, its ability to arrive at a solution acceptable to both parties even if it does not strictly adhere to positive law. Informality and unusual turns of phrase in some mediations should not lead to the belief that ‘anything goes’. As for the view that sex and ethnicity contribute to the outcome, the premise is based on a limited number of case studies; like all empirical surveys, the framework, the interpretation and the results are open to debate.
