Mediation: A Crucial Step Before Court Proceedings in Financial Disputes
Released On 11th Jun 2024
“My Spouse and I are unable to reach an agreement about our finances and now they’re threatening to take me to Court, what options do I have?”
Contrary to common belief, it’s not possible to simply ‘take someone to Court’. In-fact, there are a number of procedural steps that the Parties will need to consider before they see the inside of a Court room.
Unbeknown to many, Mediation has always been a pre-requisite to issuing Court proceedings. This means that no one can apply to issue Court proceedings without first providing evidence, by way of an official document, that they have attempted to settle their dispute via a non-court dispute resolution process, such as Mediation.
Historically, there were several exemptions which, if applicable, allowed the Court to dispense with the requirement of Mediation. However, the law has recently changed and the threshold to qualify for an exemption is much higher. This means it is now much harder to forgo Mediation.
The update is undoubtedly the Courts response to a back log of applications and long delays in the Court system. The uprise in online platforms such as MS Teams and Zoom, and the availability of such, enables Parties to take part in Mediation without leaving the comfort of their own home. The consequence of the changes in the law means that nearly everyone will be required to attend Mediation and very few will fall within the scope of an exemption.
“That’s a relief, but what is Mediation?”
Mediation is a negotiation between the disputing parties with the added benefit of an independent third-party Mediator. The Mediator is jointly appointed by the Parties and the costs are usually shared equally.
The Family Mediation Council regulate mediators. Many Mediators are retired lawyers and specialists in their field.
Mediation can take place anywhere with many now offering online services, anything you discuss with your Mediator is confidential and protected by privilege.
The process is voluntary, and either party can withdraw at any time. However, withdrawal from Mediation may induce cost consequences on the offending Party. This means that, if a Party chooses not to Mediate, they may be Ordered by a Judge to pay the other Party’s legal costs – which can be significant.
The logic of these types of Costs Orders is not to unfairly prejudice the Party who was willing to Mediate, where the dispute may have settled, and that Party has incurred legal fees to attend Court as a direct result of the Party who withdrew from Mediation.
