1. Alternative Dispute Resolution (“ADR”) provides an extended range of options to those who wish to avoid being locked into the traditional adversarial litigation or negotiation processes.
2. ADR defines the method by which a dispute might be resolved other than by a binding process imposed by someone other than the parties themselves. There are various ADR processes “arbitration, early neutral evaluation, expert determination, mediation and conciliation”. Strictly speaking, arbitration is not true ADR as it is basically a trial presided over by an arbitrator, or, in the case of most ICC arbitrations, three arbitrators instead of a judge.
3. ADR is not a new phenomenon. Mediation and Conciliation are by far the most commonly used processes. Mediation has been used in the East for centuries. It is a natural part of the eastern social order. Equally Greece has used mediators throughout history to resolve international and domestic disputes.
4. In the field of industrial relations in the UK, conciliation has been in existence since the middle of the 19th The attempts by Pitt the Younger to introduce a regime to avoid industrial disputes or their resolution by industrial action by a series of statutes between 1867 and 1872 were ridiculed as the ‘pretentious legislation’. In America ADR has developed because of the economic pressures of the cost of litigation. It has seen its greatest advances in America, Canada, Australia and New Zealand, where ADR in general and mediation in particular has been part of the legal landscape for decades, and, in some jurisdictions, mediation schemes have now become mandatory. More recently ADR has been introduced into most common law countries, and, as a result of the EU Directive, in all the civil law countries of the European Union as well.
5. However, mediation has still has not made a great impact upon the resolution of those commercial disputes which have traditionally resorted to international arbitration. Mediation generally is still regarded with considerable suspicion by many lawyers and with profound ignorance by some commercial organisations. Nevertheless it has become increasingly more popular as it comes to be used more regularly as part of the litigation process and by businesses as a way of resolving disputes without recourse to litigation.
6. In fact, a 2013 survey published in the Harvard Negotiation Law Review in 2013 of the use of mediation, arbitration and conflict management in Fortune 1000 Corporations, shows mediation as the most frequently used form of ADR amongst the survey respondents. Even in 1997, 87% of respondents indicated they had used mediation in the prior 3 years. This rose to 98% in 2011. By way of comparison, the figures for arbitration were 80% and 83% in 1997 and 2011, respectively.
7. In the UK the Woolf Reforms gave a great impulse towards ADR in general and mediation in particular. Currently there are more civil and commercial disputes being resolved through some form of ADR than there are being litigated. Insurers have embraced mediation in most cases in preference to the traditional method of ‘litigating until the last minute’ as a quicker and more sensible way of resolving all claims with minimal legal cost.
8. The European Directive on Mediation has been implemented by all member States since the 21st May 2011. That directive applies to all cross border civil and commercial disputes and applies equally to disputes traditionally submitted to arbitration as it does to those which are normally dealt with in the courts. As far as international arbitration is concerned there is slow but growing awareness that perhaps mediation offers a quicker, and dare one say, less expensive route to resolving disputes. A comparison of some of the advantages and features of each might provide a reason why disputants may prefer to mediate their disputes rather than arbitrate them.
9. The following Table is a simple guide to the essential differences between Litigation, Arbitration and Mediation as a means of resolving commercial disputes Need to Advise Clients on ADR
10. The Court of Appeal in England said that all members of the legal profession who conduct litigation should now routinely consider with their clients whether their disputes are suitable for ADR. It is my view that for some years legal advisers should have made themselves fully aware of mediation in order to advise their clients about its benefits and suitability for the dispute, and, as a matter of professional obligation, ought to give appropriate advice at every stage of litigation. However, there remains considerable ignorance about the subject. As a result of the Court of Appeal judgment, legal advisers must ensure that they not only know about mediation but that they are able to and do advise their clients before and during litigation (including arbitration) whether to use mediation and, if so, when to do so. Equally legal advisers must be in a position to protect their clients (and themselves!) against an adverse costs order or suit if they decide not to try to resolve the dispute by mediation. The Bar Council of England and Wales, as well as the Law Society have made it a matter of professional obligation for litigators to be able to advise their clients properly on mediation.
11. I suspect it is only a matter of time before other Member States enact similar provisions, and all lawyers need to be prepared. I note with interest that the Italian lawyers’ (advocates, notaries and judges!) reaction to their Government’s decision to make mediation compulsory in all civil and commercial disputes was to go on strike for a week! The fact that the strike encompassed a public holiday was, I am sure, purely coincidental!
12. This need to advise clients on ADR is, I understand, also very relevant in Singapore where the Rules of Court provide for the Court to consider in awarding costs “the parties’ conduct in relation to any attempt at resolving the cause or matter by mediation or any other means of dispute resolution” (O 59 r 5 (c) of the Rules of Court).
13. I note that in one Singapore Court of Appeal decision – HSBC Institutional Trust Services (Singapore) Ltd (trustee of Starhill Global Real Estate Investment Trust) v Toshin Development Singapore Pte Ltd  4 SLR 738 – the Court of Appeal observed that in their view, the parties’ dispute “ought to have been resolved by the application of commercial common sense in good faith through the mediation process, rather than through the adversarial curial process”. In dismissing the appeal, the Court of Appeal then ordered that each of the parties bear their own costs for the proceedings before it and below “in the light of the questionable conduct of both of the [p]arties that has in turn stoked sterile litigation”.
14. Brooke LJ in Dunnett v Railtrack  1WLR 2434 observed:
“Skilled mediators are now able to achieve results satisfactory to both parties in many cases which are quite beyond the power of lawyers and courts to achieve. This court has knowledge of cases where intense feelings have arisen, for instance in relation to clinical negligence claims. But when the parties are brought together on neutral soil with a skilled mediator to help them resolve their differences, it may very well be that the mediator is able to achieve a result by which the parties shake hands at the end and feel that they have gone away having settled the dispute on terms with which they are happy to live. A mediator may be able to provide solutions which are beyond the powers of the court to provide.”
15. In similar vein, Jacob LJ in Reed Executive plc v Reed Business Information Ltd  EWCA (Civ) 887 said:
“… RBI refused a number of offers to go to mediation. Mr Howe told us there were serious settlement discussions, but they are not the same as mediation. A good and tough mediator can bring about a sense of commercial reality to both sides which their own lawyers, however good, may not be able to convey.”
16. The Court of Appeal in Halsey identified two crucial advantages of mediation over litigation. First, that it is usually less expensive than litigation which ends in judgment. Second, that it provides litigants with a wider range of solutions than those available in litigation e.g. an apology, an explanation, the continuation of an existing professional or business relationship, perhaps on new terms, and an agreement by one party to do something without any existing legal obligation to do so. Both observations apply equally to international arbitration.
17. There are other advantages of mediation which those experienced in mediation will appreciate. For example, a mediation can be arranged at short notice, it is usually resolved in a day, it is informal, it involves the lay clients and it can involve those who are not yet (or who might never be) parties to existing litigation. For the other advantages I refer to the table at paragraph 8 above.
18. In terms of international disputes there needs to be awareness among lawyers that global and national organisations are gradually coming to the conclusion that expensive and protracted litigation or arbitration is not the only way to resolve disputes and mediation often provides a quicker, less expensive and more imaginative route to an acceptable solution.
19. In my experience even the most intractable disputes have resulted in a settlement once those in dispute recognise the advantage of being able to fashion a solution which litigation or arbitration may not be able to grant. Cost alone is often a driver towards a consensual solution. Time before obtaining judgment or the final Award and desire to preserve a continuing relationship are others. However, in many cases the ‘real’ causes of the dispute can be addressed.
20. It is quite common in my experience for parties in dispute to use a combination of litigation or arbitration and mediation. I have mediated disputes prior to the commencement of arbitration, after arbitration pending an appeal and sometimes in combination or ‘med/arb’. It is not uncommon for me to be appointed to act as arbitrator to determine any disputes arising out of a settlement agreement especially where part of the settlement agreement requires the parties to enter into other agreements or documents to give effect to the settlement. In several major construction disputes, which traditionally have been the subject of arbitration, I have held ‘mini-mediations’ with the experts under mediation terms of confidentiality, which have produced agreed positions for the purposes of the mediation which have then enabled the clients to mediate and achieve resolution in a day or two’s mediation.
21. One further observation. In February of 2003, the American Arbitration Association (AAA) undertook a major research study aimed at examining the attitudes and experiences associated with the use of non-judicial dispute resolution. The study examined how these techniques and practices are employed by a broad sample of businesses, one that included Fortune 1000 companies, mid-size public companies, and privately-held businesses.
22. The study suggests two critical new findings:
22.1 First, it is possible to identify companies that can be described as “dispute-wise.” The composite picture of a dispute-wise company’s legal department is outlined by an eight-item index of key characteristics. Its legal group is more likely to be:
(i) highly integrated into the general corporate planning process, understanding of the broader business issues facing its company and industry,
(ii) spending a lot of time on highly complex and technical issues,
(iii) involved in cross- border, international disputes (the apparent goal being to avoid the risk involved in the uncertainty of judicial processes outside borders of the home country), and
(iv) working in an environment where senior management is focused on preserving relationships and settling disputes rather than just on winning cases and, therefore, less concerned about aggressively litigating every case.
That same dispute-wise legal department is less likely to view its role as:
(v) being focused primarily on reviewing contracts and agreements,
(vi) being part of a culture that favours litigation over ADR, and
(vii) aggressively litigating every case.
22.2 Second, the survey results make it quite clear that dispute-wise business management practices appear to be associated with positive business outcomes. Among the key benefits of dispute-wise business management techniques, the study found that the “most dispute-wise” companies are more likely to:
(i) have stronger relationships with customers, suppliers, employees, and partners, describing these relationships as excellent/very good,
(ii) appreciate and value the fairness and speed of ADR processes in resolving disputes with customers and suppliers while turning away from what, in many instances, had become a single-minded focus on litigating at almost any cost approach,
(iii) experience lower legal department budgets (with “least dispute-wise” companies having significantly higher legal department expenses) and manage their in-house legal costs with a higher degree of efficiency, and
(iv) utilise legal resources well (A common complaint heard from legal departments is a feeling of being forced to operate lean and being stretched to the limit. However, despite their lower legal department budgets, highly dispute-wise companies are much less likely to describe their departments as “lean” or “stretched to the limit”
23. Relative to the stronger relationships findings outlined above, it is interesting to note that the price/earnings ratios (often thought of as a measure or indicator of stockholder confidence in the management of a company) for the “most dispute-wise” companies averaged 28% higher than the mean for all the publicly-held companies in this survey and 68% higher than the mean for companies in the “least dispute-wise” category. These outcomes suggest that the “most dispute-wise” companies are particularly concerned with maintaining good relationships with all of their stakeholders.
24. It is important to point out that the “dispute wise” companies were those which preferred to use both arbitration and mediation in preference to litigation. Beyond the dispute-wise indicators identified, the following were among the key findings regarding the use of and attitudes toward mediation and arbitration for the entire group surveyed:
24.1 The overwhelming majority of all companies surveyed say they use both mediation and arbitration, but mediation is favoured somewhat over arbitration.
24.2 “Most dispute-wise” and “moderate dispute-wise” companies tend to use arbitration more than those in the “least dispute-wise” category while the use of mediation is fairly consistent across the three groups.
24.3 There is greater use of mediation and arbitration among Fortune 1000 companies than in mid-size and private companies.
24.4 The primary reasons for using mediation or arbitration include saving money and saving time. Companies also report using mediation because it allows parties to resolve disputes themselves. Arbitration is often used because it is provided for as part of the dispute resolution provisions in contracts between the parties.
25. It is not uncommon nowadays to find that the larger international corporations include a dispute resolution clause in all their contracts which requires the parties to attempt to mediate any dispute before resorting to arbitration or litigation. Such clauses have been held by the English Commercial Court to be binding and enforceable. Similarly, a multi-tiered dispute resolution clause containing a pre-condition to arbitration has been enforced by the Singapore Court of Appeal in International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd and another,  1 SLR 130. The one criticism of such clauses is that they tend to impose strict and unrealistic deadlines which do not give mediation a chance to resolve the dispute. Flexibility is one of the keys to a successful mediation and therefore it would be better for the parties to agree that the time limits which one finds in such clauses could be less rigorously applied. There is a risk of course that any flexibility might be exploited by one side or the other, but nonetheless, given the clear commercial benefits of resolving disputes sooner rather than later, that might be an acceptable risk.
26. Summarising therefore and attempting to list the top five things everyone should know about mediation, I would offer the following List of Top 5 Things Everyone Should Know About Mediation for all those engaged in dispute resolution:
 Halsey v Milton Keynes  EWCA (Civ) 576
Michel Kallipetis QC : email@example.com
© Michel Kallipetis QC
This paper was presented at a Seminar organised by the Singapore International Mediation Centre with the kind support of WongPartnership LLP and the Singapore Corporate Counsel Association on 16 September 2015.