As the year draws to a close, individuals and organisations are in the mode of taking stock of how they have fared in various endeavours and commitments. Have expectations been met? What happened to lofty ideas proposed for implementation within the outgoing year? Where these have not materialised, what went wrong and what lessons have been learnt, going forward? It is customary that in reviewing these activities, people and organisations take steps to make improvements where the need arises. One key area of focus in organisational reviews should be the corporate expenditure on legal challenges such as in litigation and arbitration. In the not too distant past, a legal case file review would entail a process where inhouse counsel or retained consultants’ sort through and analyse the documents and data in each case file to determine which are sensitive and critical to winning or losing the cases in court.
With the contemporary developments in legal practice, it is now inadvisable that only litigators should be assigned to review corporate legal case files. Indeed, it makes better business sense for discerning organisations to retain the services of both litigators and mediation advocates in their dispute resolution teams. A large proportion of corporate legal challenges can be resolved through the alternative dispute resolution process of mediation or conciliation. Notwithstanding this assertion, litigation will remain inevitable where matters defy amicable resolution or have their foundations strictly on the interpretation of law or a finding of guilt and sanction.
It is proposed that for efficiency and cost savings, the start-off point in any legal case file review should be an attempt to sift matters which are amenable to amicable resolution from those which are all-round law. Issues to look out for in considering a case file as suitable for the mediation process is to examine the full relationship between the disputing organisations. It is important to know if the parties have a commercial relationship which will hurt both sides should it be broken. I recall a case in which I participated as a junior counsel. It was a banker-customer law suit. The customer who briefed my boss agonised so much about the likelihood of a break in the relationship between the bank and his organisation. He believed that it was some overzealous helmsman at the branch where he transacted that wanted for whatever reasons to destroy his business. As I write this, I feel a sense of pain because none of us in the legal teams knew of the mediation process. Indeed, formal mediation was unavailable in our jurisdiction at the time. If we seek an excuse on the altar of ignorance, what defence avails financial institutions which today still go through the rigours of litigation in uncomplicated cases of loan default – cases which can be resolved through skilful management at mediation?
An amicable or mediated resolution of a lawsuit will be impracticable where parties are not desirous of a quick resolution of the challenge. The body language of organizational leadership sometimes plays a role in what advice it receives. Where it is obvious that corporate management will hear of no attempts to foster a continuing relationship between the disputing parties, chances are that counsel will not propose a mediated settlement.
Discerning organizations jealously guide their public image in order that investor confidence is not eroded. In more advanced jurisdictions, any image challenges immediately impact the share price of business entities. This is the same reason why organisations sign up for arbitration as a preferred form of adjudication rather than allow for the publicity which litigation in the open court will ordinarily engender.
Another reason to first attempt a mediated resolution before resort to litigation is the well-known fact that litigation drains managerial time and impacts corporate bottom line because of the length of trial. Because of its technical nature which has built up over centuries, it takes painstaking efforts to be able to convince the courts of the rightness of your case. The third-party judge who delivers judgement in the matters which hugely impact freedoms, finances, relationships and even the right to life of certain accused persons must be certain within the limits of human capacity that the decision he makes is not flawed.
Notwithstanding the foregoing, judgements at the first two levels of court may still bear errors that must be resolved at appellate levels. The difference that mediation brings to all these is the fact that those who own the issues are the same persons proffering solutions to them. In the course of such negotiations, they may compromise on certain matters in order to move on with their lives. But where they feel so strongly about some points that they are unable to agree upon, they have the option of submitting to a third-party adjudicator in the person of a judge or arbitrator to make a binding decision.