In a mediation procedure, a neutral intermediary, the mediator, helps the parties to reach a mutually satisfactory settlement of their dispute. Any settlement is recorded in an enforceable contract.
Mediation is an efficient and cost-effective way of achieving that result while preserving, and at times even enhancing, the relationship of the parties.
The principal characteristics of mediation are:
Mediation is a non-binding procedure controlled by the parties
A party to a mediation cannot be forced to accept an outcome that it does not like. Unlike an arbitrator or a judge, the mediator is not a decision-maker. The mediator's role is, rather, to assist the parties in reaching a settlement of the dispute.
Indeed, even when the parties have agreed to submit a dispute to mediation, they are free to abandon the process at any time after the first meeting if they find that its continuation does not meet their interests.
However, parties usually participate actively in mediations once they begin.
If they decide to proceed with the mediation, the parties decide on how it should be conducted with the mediator.
Mediation is a confidential procedure
In a mediation, the parties cannot be compelled to disclose information that they prefer to keep confidential. If, in order to promote resolution of the dispute, a party chooses to disclose confidential information or make admissions, that information cannot, under the WIPO Mediation Rules, be provided to anyone - including in subsequent court litigation or arbitration - outside the context of the mediation.
Under the WIPO Mediation Rules, the existence and outcome of the mediation are also confidential.
Mediation's confidentiality allows the parties to negotiate more freely and productively, without fear of publicity.
Mediation is an interest-based procedure
In court litigation or arbitration, the outcome of a case is determined by the facts of the dispute and the applicable law. In a mediation, the parties can also be guided by their business interests. As such, the parties are free to choose an outcome that is oriented as much to the future of their business relationship as to their past conduct.
When the parties refer to their interests and engage in dialogue, mediation often results in a settlement that creates more value than would have been created if the underlying dispute had not occurred.
Because mediation is non-binding and confidential, it involves minimal risk for the parties and generates significant benefits. Indeed, one could say that, even when a settlement is not achieved, mediation never fails, as it causes the parties to define the facts and issues of the dispute, thus in any event preparing the ground for subsequent arbitration or court proceedings.
