A recent decision of the Federal Court of Australia highlights that a victory is no guarantee of having to pay significant costs in a litigated matter at the end of the day. As this case demonstrates, there are ways to avoid a situation where you win a case, but remain out of pocket. 

Joe Hockey, our Federal Treasurer, was recently successful in his defamation lawsuit against Fairfax media in response to various misinformed tweets and an advertising poster with the headline "Treasurer for Sale". 

As a successful litigant you are entitled to recover your costs, however the court found Mr Hockey was only entitled to recover 15% of his legal bill. When it has been estimated that both parties spent well over $1 million dollars in legal representation, it leaves that burning question, did Joe Hockey really win his case? Was the shortfall in his legal expenses worth taking the litigation to Court?

For someone who can afford it, maybe the expense is worth having their name cleared, however, for most people they would simply not be able to afford this luxury. Any person thinking about starting litigation, should weigh up the benefit compared to the legal costs, even in the event of a win and a costs order in your favour.  

There are also other ways to resolve legal matters and avoid the significant cost and stress of going to Court, such as mediation. 

Advantages of Mediation

  • Time - mediation can resolve a dispute quicker than the courts.

  • Cost - the costs of having to prepare and run a trial and pay numerous parties can be avoided.

  • Flexibility - The parties have more control over the outcome.

  • Stress - Mediation is less intimidating and less formal than going to court.

  • Confidentiality - Mediation is private and is usually unable to be used against a party if the case goes to trial.

  • Satisfaction - when the parties agree and decide on the outcome, they are more likely to be satisfied with the result and comply with the agreement.

  • Finality - once the parties have agreed on a settlement, modifications to the agreement can only be made if all parties agree.

What happens at mediation?

Prior to a mediation, the mediator will consider the best process for mediating your dispute.  The mediator will set some ground rules for the discussion and explain the process, including the facts and the issues in dispute.

The role of the mediator is to assist negotiations by asking questions and offering different perspectives. They do not decide on the outcome of the dispute. It is not uncommon for the parties to meet privately with the mediator during the mediation. 

What are the possible outcomes of mediation?

The parties may resolve their case in full or in part or in some instances,  they may are unable to reach an agreement.

If the parties reach an agreement in full or in part, the agreement is recorded and signed by all of the parties at the mediation.  If the dispute is settled in full, the judge will be notified by the mediator that the matter has settled.  

If an agreement is not reached at mediation the parties will then consider what needs to be done to prepare for a trial.  The mediator will notify the judge of the outcome, but not the content of the mediation.  Often mediation allows the parties to clarify the issues.  Mediation does not delay the matter going to Court.

It is important to remember that a successful outcome in litigation doesn't have to be made by a Judge in Court.  You should seek sound legal advice in all litigation matters. 

This article contains information of a general nature only and is not specific to your circumstances. This is not legal advice and should not be relied upon without independent legal or financial advice, specific to your circumstances.