Mediation
This guide is aimed at readers in the UK. It was last
updated in February 2008.
Introduction
Ninety percent of cases before UK courts are settled before
trial and many disputes are resolved before proceedings are even
issued. Resolution of a dispute by agreement can save legal costs
and settlement also allows the client to focus again on its
business.
The Civil Procedure Rules provide the framework for litigation.
They also oblige the courts (and place lawyers under a duty) to
encourage the appropriate use of Alternative Dispute Resolution
(ADR) and facilitate its use. Parties are actively encouraged to
consider resolving disputes and there may be costs sanctions for
those who do not or who withdraw from the process without good
reason. ADR is now accepted as an integral part of dispute
resolution.
ADR is a generic term that describes a number of techniques that
can be used to promote early and cost effective settlement. Some
rely upon the imposition of a decision upon the parties (through
arbitration, mini-trial, expert determination or otherwise).
However, the most common form of ADR, mediation, is different:
the outcome is consensual. ADR clauses contained in contracts, will
in most instances, be binding.
What is mediation?
Mediation is a voluntary and confidential process using the
services of a neutral third party, a ‘mediator’, who will attempt
to facilitate negotiation of an agreed settlement. Mediation can
take place at the instigation of all or one of the parties or it
can be initiated by a court order. Since agreement to participate
in mediation is essential, it is usually not imposed by the courts
but they can influence by persuasion.
The mediator will generally not offer an opinion on the issues
nor will he or she impose a decision in the event that agreement
cannot be reached. Ownership of the dispute remains with the
parties and it is theirs to settle or not as they choose. A party
may leave the mediation if they so wish. Mediation can happen at
any stage of a dispute and take anything from one hour to several
days, although usually they are completed after one day.
Appointment of a mediator
There are a number of organizations, such as the Centre for
Effective Dispute Resolution (CEDR) and the ADR Group, which
provide the services of a mediator from their panels of trained
mediators (often solicitors or barristers). Mediators can
also be approached directly.
Mediation service providers will provide the names and profiles
of two or three suitable mediators for the parties to select from.
Some parties and lawyers believe that a mediator should have a
similar background to the dispute in question, for example, a
surveyor should mediate in a surveyor's negligence dispute. Others
believe that the professional background of the mediator is
irrelevant and it is the individual qualities of the mediator that
count. Your solicitor and/or the mediator provider can discuss this
with you.
After the mediator has been appointed the parties will enter
into a short agreement with the mediator and each other which
defines the rights, responsibilities and obligations of each to the
other (including the procedure to be followed, confidentiality and
fees).
Preparation for the mediation
Typically the parties will, in conjunction with their legal
representatives, prepare a short summary of their case which will
be exchanged with the other party or parties and copied to the
mediator in advance of the mediation.
Copies of key documents can also be provided to the mediator if
the parties so wish. It may also be necessary to prepare a short
chronology, an overview of the key people involved and a glossary
if the dispute is complex. This will allow the mediator to read
into the case. These documents however should be kept to a minimum.
Documents/information can be provided to the mediator
confidentially, if a party so wishes.
At the mediation
On the day appointed for the mediation the parties and their
lawyers will attend the agreed venue and will each have their own
private room. In an initial ‘open’ session (involving all parties)
the mediator will emphasise his impartiality and the voluntary and
confidential nature of the mediation and lay down any ground
rules.
Each party will be required to confirm that they have
‘authority’ to settle, and make a short oral presentation of its
case. The purpose of the open session is to bring the parties
face-to-face before breaking off into the private sessions that the
mediator will have with each party. The mediator may dispense with
this open session if he believes it would serve no useful
purpose.
After the open session the parties will break off into private
sessions. The mediator will meet with each party separately to
discuss the background to the dispute and then begin a process of
‘shuttle diplomacy’ between the parties. The mediator will seek
to:
- understand each party's respective position and explore issues
arising;
- discuss with each party what it wants out of any
settlement;
- explore with each party what it actually needs from a
settlement, for example, the continuation of a commercial
relationship between the parties;
- seek out any hidden agendas and investigate the consequences
for the parties of not settling; and
- gradually move the parties towards constructive negotiation and
a settlement acceptable to all parties.
After the mediation
If settlement terms are agreed in principle the parties will be
encouraged to sign a formal settlement agreement at the end of the
mediation. The mediator will be reluctant to leave this until
another day. If the case has not settled at the mediation, the
parties are of course at liberty to continue negotiations and
sometimes a settlement will be reached shortly after the
mediation.
Which cases are appropriate for mediation?
The vast majority of cases are appropriate for mediation, even
fraud cases. Mediation should always be considered, but especially
when:
- the cost of litigation will be disproportionate to the
claim;
- the parties are deadlocked in settlement negotiations;
- the complexities of law and/or fact and/or relations are likely
to protract proceedings;
- the issues involved are sensitive or would require the
disclosure of sensitive evidence in court proceedings; or
- the parties wish to settle their dispute in private.
- Mediation is probably not suitable when:
- there is an important point of law to be tested by the courts
or a commercial or a legal precedent needs to be set;
- summary judgment is available quickly and efficiently;
- the parties require emergency injunctive or protective relief –
although the underlying issues could be mediated later;
- settlement discussions are already underway and making
progress; or
- the attitude of one or more party is such that a mediation has
no realistic prospect of success.
What to do if participating in a mediation?
- Ensure that you have full authority to settle on the day. Know
your case thoroughly, including its strengths and its
weaknesses.
- Know what you want and what you need and be realistic.
- Allow enough time and be patient: mediation is a process that
should not be rushed.
Why does mediation work?
The mediator is able to change the dynamics of the traditional
negotiation process away from positional bargaining, and remove the
hostility often associated with it. It also strives to achieve a
‘win, win’ which is usually not possible in the traditional
negotiating process and certainly not possible at trial. Parties
can derive satisfaction from the opportunity to ‘have their say’ in
a face-to-face encounter.
How much does mediation cost?
A one-day mediation with one day of preparation by the mediator
could cost each party approximately £3,000–£4,000 in a reasonably
straightforward case. Court run mediation schemes are substantially
cheaper, for example, in the Central London County Court the
mediation will cost each party £100–£200. though there will be
limited amount of time, say three hours, set aside for the
mediation.
Some organisations run fixed fee mediations whereby irrespective
of the time taken by the mediation the fee remains fixed.
Legal advisers' costs should be factored in, too.
