What to expect and how to prepare for your lawyer-assisted financial mediation

We know that reaching an agreement about the division of property is the hardest part.

Many families choose private financial mediation as a way to resolve these issues in a more amicable, cost-effective, and efficient manner.

What Is Private Financial Mediation?

Private financial mediation is a voluntary, confidential process where an independent third-party mediator helps separating parties come to an agreement on financial matters, such as property division, spousal maintenance, or the division of superannuation. Mediation is typically conducted outside the courtroom and is a more informal alternative to litigation, though is often lawyer-assisted when we are involved.

Financial mediation is often used in family law disputes to help both parties reach an agreement without the need for a judge to make decisions on their behalf. A successful mediation can save time, reduce costs, and avoid the emotional strain of a court battle.

You may have heard about Conciliation, which is a type of mediation. The conciliator’s role is slightly more directive than that of a mediator, in that they can express a view about what a Court might do or lead the parties to options. This is often desired in lawyer-assisted mediation because the parties have already received advice and remain unable to broker a solution.

If you are about to attend a private financial mediation, understanding what to expect and how to prepare can significantly improve the chances of a successful resolution. It will also help you to feel more in control and (hopefully) a little less stressed as the day approaches.

Here are some of our practical tips on how to prepare and what to expect

What to Expect in Private Financial Mediation

1. Exchange of Information

   A key component of financial mediation is the full and frank disclosure of financial information. Each party will need to provide details on assets, liabilities, income, and spending. This often includes bank statements, pay slips, property valuations, tax returns, superannuation balances, and any other financial documents relevant to the case. Honest and transparent disclosure is required, and is often essential for achieving a fair outcome.

2. The Role of the Mediator

   The mediator is an impartial professional, typically a family lawyer, barrister or accredited mediator, who facilitates the conversation between both parties. Their job is not to make decisions or give legal advice, but to help both parties explore possible solutions, communicate effectively, and negotiate a mutually agreeable outcome. They advocate for an agreement being reached, whereas your lawyer is there to advocate for what is best for you.

3. The Setting

   Private financial mediations often take place in a neutral venue, such as at a law firm or mediation centre. The parties may either sit together in the same room or in separate rooms, with the mediator moving between them (a process known as ‘shuttle mediation’). This setting is typically less intimidating than a courtroom, offering a more relaxed environment conducive to productive discussions. In shuttle mediations, you should expect to have a lot of time to yourself while the lawyer/s and mediator are conferring.

4. Opening Statements

   The mediation process usually begins with the mediator explaining the rules and process. Both parties may then have the opportunity to make an opening statement to express their perspectives on the dispute and outline their goals. This is either to the mediator only (in the case of a shuttle) or to all parties in a roundtable setting.

5. Negotiation

   The mediator will help facilitate discussions, guiding both parties through negotiation. They will assist in identifying areas of agreement and disagreement, exploring possible compromises, and helping each party understand the other’s position. This stage may involve back-and-forth negotiations with the mediator shuttling between the two parties.

6. Reaching an Agreement

   If the parties can reach a consensus during the mediation, the lawyers or mediator involved will help draft an agreement. This can be a legally binding document. In family law matters, this is typically done by filing the agreement with the court, where it may be made into Consent Orders. If an agreement cannot be reached, the mediator may recommend other dispute resolution methods or the parties may decide to proceed to court.

How to Prepare for Financial Mediation

Proper preparation can greatly increase the chances of a successful financial mediation. Here are several tips on how to prepare:

1. Pack snacks

   It can be a long day.

2. Gather financial documentation

   Be ready to disclose all relevant financial information, including details of any property, superannuation, debts, income, and expenses. The more thorough your documentation, the better equipped you will be to engage in productive discussions. Be honest and transparent—failure to disclose assets can undermine your case and even have legal consequences.

3. Understand your goals and interests

   Before mediation, take time to consider your financial needs and what you hope to achieve. What is your ideal outcome? What are your non-negotiables? Understanding your financial situation and what you are willing to compromise on will help you navigate negotiations effectively. Try to focus on the bigger picture and your long-term financial wellbeing, rather than emotions tied to specific assets.

4. Get legal advice

   While the mediator is not there to give legal advice, you should seek advice from a family lawyer beforehand. Your lawyer can help you understand your legal rights, the likely outcome of the mediation, and what options may be available to you. Having legal advice can also give you confidence in knowing whether the proposals made during mediation are fair and reasonable.

5. Know your BATNA

   BATNA stands for Best Alternative to a Negotiated Agreement. It is a concept used in negotiation theory to refer to the course of action that a person or party can take if the current negotiations fail and no agreement is reached. In simpler terms, it represents the best option available to someone if they cannot reach a satisfactory agreement through negotiation. Understanding your BATNA is important at mediation because it helps you to quickly evaluate the strength of your position and any offers that are made.

6. Know your limits

   Ensure that you have consulted with financial advisors, such as a mortgage broker, insurance broker, planner and/or accountant. This means knowing what you can borrow and service, and have estimated tax liabilities for any likely transfers of property or superannuation.

7. Be open to compromise

   Mediation is about finding a middle ground, so it’s important to be open-minded and prepared to make compromises. Being too rigid in your position may hinder the mediation process. Approach the session with a willingness to negotiate and consider alternative solutions.

8. Consider how emotion is impacting on your decision

   Even financial matters in family law disputes often carry a great deal of emotional weight. Be prepared for potential moments of tension or discomfort during the mediation – particularly around items that carry sentimental value for you. Focus on remaining calm, patient, and respectful. The goal is to resolve the matter constructively, rather than rehashing past grievances. You may wish to consider bringing a support person if you feel like you will benefit from that.

9. Stay focused on the financial issues

   It can be easy to get sidetracked by personal issues or past conflicts during the mediation. Try to keep the conversation focused on the financial aspects of the dispute and work towards a resolution that works for both parties.

10. Know your options if mediation fails

    While the goal of financial mediation is to reach an agreement, it’s important to be prepared in case mediation does not result in a resolution. If mediation is unsuccessful, you may need to consider taking your case to court (ie. towards your BATNA). Your lawyer can help you understand what steps to take if mediation does not work out.

Private, lawyer-assisted financial mediation in family law matters can be an excellent way to resolve financial disputes in a cost-effective and amicable manner. Remember, mediation is not just about resolving financial issues—it’s about finding solutions that benefit both parties in the long term, with less stress and conflict.

If you’re considering lawyer-assisted financial mediation, ensure that you approach the process with an open mind, a clear understanding of your needs, and the support of an experienced family lawyer. Ensure that you have communicated your goals and limits to your lawyer prior to the mediation. This will help you navigate the process more effectively and give you the best chance of reaching a resolution that works for you and your family.