Mediation: Keeping disputes out of court
Last Updated: Sep 15, 2021
To all business owners, managers, and executives. You start your business. You have a dispute. One thing that you will definitely regret in such a case is not having a mandatory Mediation Clause in your agreements.
Singapore is at the forefront of the movement to encourage mediation instead of more abrasive forms of dispute resolution and it makes perfect sense on so many levels. Let’s just look at costs.
I am comparing mediation at the Singapore Mediation Center (SMC) and arbitration at the Singapore International Arbitration Centre (SIAC). Admittedly not apples to apples, given getting to an arbitration hearing usually involves much more work, the point here is before you invest time and money in litigation/ arbitration, consider mediation.
Let us take a S$10m dispute. And let us just consider the costs to be paid to the respective centers. For the sake of simplicity, I will not go into details but give a broad calculation.
Cost at SMC:
Filing fees: $267.50
Mediation Fees: $8,292.50 per party per day
Total = $267.50 + $8,292.50 = $8,560
Cost at SIAC:
Non-refundable filing fees: $2,140 for local parties, $2,000 otherwise
Administration fees: $38,800
Arbitrator’s fees: $161,900
Administration and arbitration fees are shared by parties. Let us assume there are 2 parties.
Total = $2,140 + ($38,800 + $161,900)/2 = $102,490.00
The cost of mediation is about 8% of the cost of arbitration. As I said, they are not the same processes but if the ultimate aim is to resolve a commercial dispute, why not mediation?
Do look at ALL your agreements and please ensure that you have a mandatory Mediation Clause in them. Comparison of contract drafts helps to verify what changes were made or not. The comparison tools feature also helps to adequately describe the types of changes made to the document.
Mediation – You get to choose your mediator.
Another advantage of mediation is that you get to choose your mediator. It is not an advantage over arbitration as you get to choose your arbitrator(s) as well. It would be an advantage over litigation.
Anyone who has followed my posts will know that I am a big fan of litigation at the High Court. If I had to choose between arbitration at the SIAC and litigation at the High Court, my choice would be litigation at the High Court every single time.
Our line-up of the Judges at the High Court is of the very highest quality and has been improving year on year. The Judicial Commissioners that have been coming in and gone on to be appointed as Judges at the High Court consists of many Senior Counsel. However, you do not get to choose your Judge. Judges are assigned.
Problem is, you may not get a Judge who is specialised in disputes.
For mediation, however, you can choose a mediator who is specialised in the area. There are 4 classes of mediators at the SMC: Senior, Principal, Associate and International. In terms of quality, the panel of Principal Mediators is unparalleled. A handful of sitting Senior Judges of the High Court, many Senior Counsel.
If you need a senior, specialised Mediator for your dispute, you will be in good hands.
If for some reason you need to conduct an ad-hoc mediation with a particular mediator, that too can be done.
Please note that this article does not constitute express or implied legal advice, whether in whole or in part. If you require legal advice, please contact us