Litigation is heavy duty and, according to at least one High Court Judge, arbitration is ’unwigged’ court proceedings: similar in terms of time and cost but the arbitrator doesn’t wear a wig (although some undoubtedly should!).
What then with mediation: the 80:20 rule applies. It has the potential to save about 80% of the costs which would be incurred in litigation or arbitration. Think of it this way: if the overall costs to the end trial are 100% then research shows that in most cases 20% of these costs are spent to acquire about 80% of the evidence and then the remaining 80% of the costs are spent trying to dredge up the remaining 20% of the evidence, which rarely makes any substantive difference to the outcome of the case. Therefore, if you can pick the moment when you have spent the 20% and have enough information and documentation to discuss the case sensibly – there you have the potential to save 80% costs.
Added to that, mediation leaves it open to parties to achieve left-field solutions beyond the powers of any judge or arbitrator to order – a solution which may well reinforce rather than fracture the business relationship between the parties. That is why we mediation enthusiasts speak of ‘win, win’ outcomes!