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Negotiation and Mediation

forLegal action can be a useful tool to secure justice, but it is not the only tool to achieve your objectives. Before taking legal action, it is helpful to consider alternative routes to achieving your objectives. Alternatives could be quicker, less costly, and more effective in securing justice in your circumstances.

A common alternative to going to court is reaching an out-of-court settlement. Out-of-court settlements are where the opposing parties in a case (or a potential case) come to a compromise agreement. In these agreements, the party bringing (or about to bring) the case agrees to stop the case or not bring the case in return for something from the other side (e.g. compensation, an apology and/or a change in behaviour).

Out-of-court settlements are often reached through processes called alternative dispute resolution (ADR). There are many different types of ADR, but the main ones are negotiation and mediation.

It’s important to think about these alternatives before and while you take legal action. This page aims to help you do that.

1

What Is Negotiation?

Negotiation is a discussion of issues in a case between opposing parties in order to come to a settlement.

Key Features of Negotiation

The key features of negotiation are:

  • It’s an informal process with no set procedure;
  • It can be in writing or be verbal (in person);
  • It can take place between the parties directly or their lawyers;
  • It generally involves both parties making «concessions» or compromises to reach a solution acceptable to both parties;
  • The parties are in control of the outcome. An agreement can only be reached with their consent;
  • Negotiations are private and confidential. They cannot be used against you in court; and
  • The settlement reached at the end of a negotiation is often a «contract» that is binding on the parties.
2

What Is Mediation?

Mediation is a process where a neutral third person (a mediator) will help the opposing parties reach a negotiated settlement (this process can also be called conciliation). This is like a negotiation but with a third party.

Key Features of Mediation

The key features of mediation are:

  • The parties select an independent third party to be a mediator;
  • The mediator facilitates the negotiation between the parties;
  • The mediator is objective and does not take sides;
  • The mediation is private and confidential. What is discussed cannot be used against you in court;
  • The parties can decide what procedure to follow. It’s a flexible process;
  • The mediation involves a combination of private discussions with the mediator and group discussions with the mediator and the other side; and
  • The objective is to reach a settlement, that will act as a binding contract.

The mediation can be done by a non-professional, a judge, an institution (e.g. the National Contact Point of the OECD), or an ombudsman. It’s important to select a mediator that you can trust and will not be biased.

Example: Mediation with BHP Billiton in Peru
Mediation was used to create dialogue between BHP Billiton and local communities to discuss concerns about pollution and human rights issues.

Example: The New Nigeria Foundation
In Nigeria, the New Nigeria Foundation (a mediator) has helped reach agreements between big oil companies and local communities. This includes the implementation of development projects as a remedy for communities affected by pollution.

3

Is ADR Right for Me?

The goal of negotiation and meditation is to find a solution that suits both parties. Each party makes some compromises and tries to reach a decision that is in the interests of both parties.

While ADR can be a useful tool for securing justice, it may not be the best option in your case. Sometimes the formal legally binding court judgement is needed to achieve your objectives. Consider the following advantages and disadvantages when deciding to use ADR:

ADVANTAGESDISADVANTAGES
ADR is cheaper and quicker than going to courtCosts can increase if lawyers are used
ADR is a flexible and informal process. You can agree to a procedure that suits both sidesIf ADR is unsuccessful, it can delay the process of going to court
The parties have more control over the process and the outcomeADR lacks the clear procedural rules of court that are designed to increase fairness
ADR involves less conflict. It may be possible to maintain a relationship with the other sideIf there's a power imbalance, the stronger party can try to force the weaker party to accept a bad agreement
A wide range of issues (legal and non-legal) can be considered in ADRThere is no formal process of disclosure and interim orders that can be tactically important in court
ADR is confidential. The discussion cannot be used against you in courtADR doesn't set a "legal precedent" that has to be followed in other cases
ADR is focused on problem-solving rather than winningAs ADR involves compromise, you'll usually have to make concessions
ADR can be risky because there's no winner and loser. It's not an all or nothing processIf the other side doesn't respect the settlement, you'll have to go to court anyway
ADR could lead to a binding settlement you can later enforce in courtADR won't usually work if the other side is hostile and willing to compromise

Some of the risks of taking ADR can be avoided with good preparation and planning. However, if the risks outweigh the potential benefits, it may be best to go directly to court or launch a campaign.

4

When Should I Use Negotiation and Mediation?

ADR can be used at different stages.

ADR could be used when you first realise there’s a problem:

  • This has the highest potential to save costs and settle the issue quickly.
  • However, there is a risk that you won’t have enough evidence to be in a strong negotiating position, and you could be caught off-guard by the other side.
  • For this reason, using ADR early could be appropriate if you have a very strong case and the evidence is easy to find, but not if you need to gather more information.

ADR could be used when you notify the other side that you intend to bring a legal case:

  • You are often required to notify the other side before you formally bring a case.
  • At this stage, you should have more information and evidence about your case, and you will still be able to save money/time before formally starting your case.
  • However, in some cases, it may be useful to wait until you know more about the other side’s «defence» or go through the «disclosure process»

ADR could be used after you bring a case but before your trial date:

  • You will have a clearer picture of the facts, evidence and other side’s arguments at this stage, which could make it easier to prepare for ADR. However, your opponent will also know more about your case.
  • You may be able to use court procedures to complement your ADR strategy. For example, you could seek further evidence and information through disclosure that could be important for negotiation or mediation.
  • However, as you will have already started the case, you will save less money and time the longer you wait to try ADR.

Practical Tip
Often the best plan is to try negotiation or mediation first (it is faster and cheaper), while being prepared to take legal action if this fails or the agreement is not followed.

5

How Can I Prepare for ADR?

Having a strategy and a plan is key to achieving your objectives in the ADR process. The other side could take advantage of your willingness to negotiate if you aren’t prepared.

10 Tips to Prepare for ADR

Consider the following steps when preparing for ADR:

(1) Identify your objectives: Decide what realistic outcome you want to achieve through ADR.

(2) Identify the key issues: Work out what issues the other side will likely disagree with. These are the issues that you will need to have the strongest arguments.

(3) Gather facts and evidence: Be clear on the facts of the case and have evidence to support your version of events. This will strengthen your negotiating position.

(4) Know the law: Although ADR is not a strict legal process, it’s often taken in the context of a legal case or a potential legal case being brought to court between the two sides. For this reason, it’s important to know the relevant law and how the other could be in breach of the law. It’s important to be able to convince the other side that if the case goes to court, you will win and therefore they should reach a settlement.

(5) Prepare your arguments: When you know the issues, the facts and the law, you will be in a position to prepare your arguments. Decide the main points you want to make in the negotiation or mediation. These should be based on the evidence and the law.

(6) Identify concessionsADR settlements usually involve a compromise. To help reach a settlement, you will often have to make certain concessions (i.e. give things up that you want to achieve). Decide what objectives or issues that you are comfortable to compromise on, and use these concessions to help secure an agreement that meets your main objectives and key issues. Don’t make all your concessions at once. Only make a concession where it’s necessary to break deadlock between the parties and reach an agreement.

(7) Identify a minimum settlement figure or outcome: If you want compensation, decide the minimum amount of compensation you would accept in a settlement and don’t accept a settlement below this figure. However, don’t make this minimum figure with the other side at the beginning as you will want to achieve more than this. Instead, keep the figure in your mind as it will influence what concessions you are comfortable making.

(8) Ensure a fair process is followed: If using mediation, pick an objective and independent third party you trust. Ensure the procedure is not one-sided and allows you to make you arguments, present your evidence and allow participation from anyone you think should attend.

(9) Get a lawyer: If the other side has a legal representative, it’s important that you have a lawyer or representative from a civil society organisation to attend the negotiation with you. This is vital to prevent a power imbalance.

(10) Agree everything with your group: If multiple people will be affected by the ADR process, make sure everyone involved agrees with the objectives, arguments, concessions, minimum figure and process that will be followed. This will help ensure any settlement is accepted.

6

How Can I Enforce a Settlement?

Reaching a settlement through ADR is only the first part of the process. If you want to achieve your objectives, it’s equally important that the agreement is followed by the other side.  As ADR is an informal process, there is no routine mechanism of enforcement. Consider the following strategies when enforcing a settlement.

The first step to enforcing a settlement is ensuring you reach a clear and legally binding settlement. If you reach an agreement, do the following:

  • Ensure the terms of the agreement address the key issues;
  • Ensure both sides understand what the terms of the agreement mean in practice;
  • Record the agreement in writing at the end of the negotiation or mediation; and
  • Ensure both sides sign the agreement. This is key. If both parties sign the agreement, there will be evidence that a contract has been created.

Practical Tip: Draft an Action Plan

The next step is to draft an action plan with the opposing party, and other parties affected by the case (e.g. neighbouring communities), that seeks to resolve the problems created by their actions. This creates a step-by-step plan about how the settlement will be implemented in practice:

  • For example, if a company is polluting a water source, you can agree on an action plan in which the company would commit to stopping the actions that led to the pollution. You would then seek to remedy the damages this pollution caused. Finally, you would agree on measures to monitor the situation to prevent any future pollution. This could include, for instance, an action plan for the company to preserve the environment.

Try to record this in writing and have it signed. This could then be annexed to the initial agreement as a schedule to the contract.

If you have a binding settlement and the other side is still not following the agreement, you can enforce the settlement as a contract in court against the other side. If successful, a court will order the other side to comply with the terms of the agreement and, possibly, the agreed action plan.

It can also be helpful to:

  • Get NGOs and civil society organisations to monitor the implementation of the agreement. They can raise awareness and put pressure on the other side if it doesn’t implement the agreement.
  • Develop a media strategy or campaign could be used to put pressure on the party to implement the agreement.
  • Our Campaigning page gives you more information on these possibilities.
7

What if Mediation and Negotiation Aren't Working?

If you have tried to negotiate and enter into negotiations with the other party, but it has failed, you can still bring a legal action in court.

Sometimes powerful parties, such as companies, will try to make you sign documents to agree to only negotiate and give up your right to take legal action. DO NOT sign this type of commitment.

Make the other party understand that if the mediation fails, you will still consider taking legal action. This can be a form of leverage over a more powerful adversary, making them to enter into meaningful mediation or negotiation.

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