Businesses can save themselves a lot of time, money and heartache if they solve disputes this way, argues Deborah Hart.

When the economic going gets tough, the tough get mediation.

I recently read about an interesting new mediation programme that has been launched in Ohio, in the United States, to help resolve differences between banks and homeowners grappling with issues relating to foreclosures. The new system has reportedly brought substantial relief to many Americans.

Closer to home, we have seen mediation enjoying an increased role in a variety of business contexts. As Attorney-General Chris Finlayson has noted, one context in which mediators "may have an important role to play" is in post-quake Christchurch.

If there's been one thing that has been almost as difficult as rebuilding that damaged city, it has been resolving some of the business-related disputes that have arisen from the catastrophe.


On the other hand, one doesn't need to look far in the business world to see what occurs in cases when people either cannot or will not go down the mediation route. The evidence lies strewn around some of the country's boardrooms, including some funded out of the public purse.

One such instance would be the protracted fight involving former Radio New Zealand news boss Lynne Snowdon and her old employer. This dispute has now dragged on for the better part of a decade and cost the taxpayer hundreds of thousands of dollars and, as the Herald reported, has even had the Court of Appeal insisting that "the procedural music must stop". The point here is not to offer an opinion on the merits of this civil case, but to suggest that a mediated outcome might have saved a great deal.

Of course litigation has its rightful place and is necessary for some disputes. But litigation and its attendant escalation of conflict really ought to be the last resort, whether a dispute involves the Family Court, the Canterbury rebuild or almost any business-related case in these straitened times.

It is not surprising then that many businesses in New Zealand are sending their disputes, both large and small, to mediation. Why? Because mediation - which is the confidential and consensual dispute resolution process in which an independent and impartial accredited mediator facilitates negotiation to assist the parties to resolve their dispute - is more concerned with "win-win" outcomes than judicial procedures that usually entail somebody losing - and often losing badly.

Businesses using mediation will usually be picking themselves up and moving on much more quickly than those caught on the treadmill of litigation.

Another attraction of mediation is the confidential way it usually resolves business related conflict, with the parties signing confidentiality agreements and the inner workings of the business not ending up as a matter of public record. This is not usually the experience with litigation.

Among the sorts of business-related issues this approach is tailor-made for are resolving disputes between principals of an existing business or practice, negotiating an amicable end to a contractual dispute, insurance disputes - and resolving old-fashioned disputes over, well, just about anything.

And why not? If the source of most conflict in life, even in business life, stems from people feeling they are not heard, appreciated or understood, then mediation offers much, because it's precisely these things that it can put back into the equation.

In the case of Christchurch, this is particularly relevant. This isn't a time for "winners and losers", but rather a time for the best outcomes for as many people as possible, as quickly as possible.

Mediation is a process - often the only process - in which conflicts can be resolved rapidly, economically and at an early stage and often with an agreeable outcome for everyone involved.

Mediation with a trained and experienced mediator has the capacity to resolve a dispute on terms that the people involved want. It's confidential and binding.

It empowers people to solve their own disputes. It provides tools to resolve future disputes. And usually it's by far the most cost-effective option. What better recommendation could it have for business?

* Deborah Hart LLB is executive director of the Arbitrators' and Mediators' Institute of NZ.