Do you have a mediation clause in your contracts? - 29 July 2010

The cost of litigation can often outweigh the size of the dispute itself.  When drafting contracts or terms, it is advisable to have a mechanism for dispute resolution.  This could include a simple mediation clause.  CEDR (The Centre for Effective Dispute Resolution) reported in its 2010 Mediation Audit that up to 90% of organisations surveyed include a mediation clause in their contracts.

Mediation can be used as soon as a dispute arises.  It is not necessary for court proceedings to have commenced.  Usually, the parties share the costs of the mediation which usually include the venue and mediator's fee.  Each party is generally responsible for their own legal costs of the mediation, if applicable.  A high percentage of mediations settle on the day or very soon after.

For further information about mediation or drafting a clause for your contracts, please contact Sandra Garlick