Guide to mediation

What is mediation?

Mediation is a process of negotiation where parties in a dispute come together to discuss the matter with an independent mediator, who helps in identifying and exploring options for a resolution.

The mediator will not hand down a decision. They will help the parties to reach their own agreement. The mediator will be appointed by the Commissioner or the Victorian Small Business Commission (VSBC).

Benefits of mediation

Mediation is an effective way to resolve an issue and has a high success rate. It helps parties to avoid costly litigation and the associated business disruptions.

It can be arranged within a few weeks after the application is submitted, with most mediations taking less than a full day.

The process empowers parties by allowing them to directly engage in the negotiation of their settlement and be in control of the outcome.

Mediation sessions are informal yet structured and are conducted in a meeting room with all parties seated around a table. The mediator doesn’t apply strict rules but adapts the process to best suit the dispute and the people involved. This approach allows for creative and business-driven solutions rather than legal judgements.

At mediation, parties can address and resolve their issues in a less stressful environment and in a non-confrontational way, increasing the likelihood of continuing their business relationship.

How to prepare for your session

It’s essential that you attend your mediation session in person, even if you intend to have legal or other representation with you.

Prepare a short statement that tells your side of the story, avoiding minor issues that often arise in disputes.

Think about the outcome you would like to achieve, your immediate needs and what you’re willing to compromise to reach a resolution.

Consider having a support person and legal or professional representation attend on the day or be available to talk with you by phone during the session. It’s not necessary to have representation during the mediation process, however, some parties feel more comfortable if they are accompanied by a lawyer or another representative.

Interpreters are available no cost. If required, contact the VSBC and ask for an interpreter to be provided at mediation. 

While the average length of mediation is around 3.5 hours, it can sometimes take a full day. Please take this into consideration when making your plans.

If the dispute is resolved, be prepared to sign a written settlement agreement at the end of the mediation session.

What to expect on the day

On arrival at our mediation rooms, go to the reception area to:

  • sign the mediation agreement – these are provided to both parties before the mediation session
  • pay the mediation fee – see question 1 of our mediation FAQs
  • sign the confidentiality form – the mediator will let you know if you are required to sign this form.

This will be followed by the mediation session.

Introductions – the mediator will formally introduce themself and invite the parties into the main mediation room where they will explain the mediation process. In some cases, the mediator might write up an agenda for the mediation.

Parties’ presentations – the mediator will ask each party to present their case and describe the issues in their own words.

Discussion – once each side has had the chance to speak and be heard by all parties, there will be an open discussion of the issues raised. The mediator will help the parties to identify the key issues in dispute and consider possible outcomes.

Private sessions – after the open discussion, the mediator might have private sessions with each party to consider options and possible ways of reaching some agreement. It’s important to remember that the mediator helps the parties to think about their options though does not provide legal advice or make any decisions. All the decisions are made by the parties themselves. Anything said to the mediator in those private sessions is confidential.

Outcomes – after the private sessions, all parties will meet again to finalise the mediation, either by reaching a settlement agreement or by confirming that agreement cannot be reached.

What happens if agreement is reached?

If agreement is reached, a terms of settlement document is drafted, considered and signed by the parties. This is the end of the mediation process. It is important to know that the signed terms of settlement agreement is a binding document and can be enforced by judicial or tribunal proceedings if necessary.

The parties are not obliged to reach an agreement at mediation. They should only enter into a settlement agreement if they feel that the outcome reached is their best option in their particular circumstances.

What happens if an agreement isn’t reached?

If your mediation session was conducted under the Retail Leases Act 2003 or under the Owner Drivers and Forestry Contractors Act 2005, the parties can choose to start proceedings at the Victorian Civil and Administrative Tribunal (VCAT). To do that, either party will need to request and obtain a certificate signed by the Victorian Small Business Commissioner.

If your mediation was conducted under the Small Business Commission Act 2017, there is no certificate procedure after a mediation where settlement isn’t reached. The parties can consider different options of starting judicial or tribunal proceedings.

Can mediation be adjourned?

There are situations when the mediation cannot be finalised on the day. If the mediator believes there is a need for the mediation session to be adjourned, they will advise the parties of this and get their agreement to the adjournment. Mediations can be adjourned to a maximum of 30 days after the initial mediation date.

Client satisfaction survey

After finishing the mediation session, the parties are asked to complete a client satisfaction survey. Your feedback about our mediation services is always appreciated as it helps us to improve our services.

Download our Guide to mediation.


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