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Mediation Awareness Week 14th – 20th October 2017

Mediation Awareness Week 14th – 20th October 2017

Use of Mediation in Resolving Litigation

This week marks “Mediation Awareness Week”, and so we thought that we would share with you our own views about the process of mediation in the context of litigation matters.

Background

There is no escaping the fact that litigation can be both time consuming and expensive. As a result, the Courts and the Government have introduced various measures in recent years to try to encourage litigants to seek alternative ways to resolve their disputes. We have seen, for example, the fees payable to the Courts increase sharply together with widespread civil litigation reforms intended to focus attention on resolving disputes in a proportionate and cost effective manner.

The use of all forms of Alternative Dispute Resolution (“ADR”) has therefore increased in recent years. The term “ADR” is generally understood to describe all methods of dispute resolution other than litigation through Court proceedings. It therefore covers adjudication, arbitration, early neutral evaluation, expert determination, mediation and negotiation. Mediation is undoubtedly the most common form of ADR (with the exception of straightforward negotiation) and, given the current focus on proportionality and cost effectiveness, we expect the use of ADR (and mediation in particular) to increase significantly.

Mediation is clearly a process that is encouraged by the Courts, such that parties now face the possibility of having sanctions imposed against them should they unreasonably refuse to consent to mediation.

What is Mediation?

Mediation is a flexible, voluntary and confidential form of ADR. It involves an independent, neutral third party who has been trained to have the necessary skills to act as a mediator.

It should be borne in mind that a mediator does not act as a judge or arbitrator – they do not decide who is right and who is wrong. The primary role of a mediator is to act as a facilitator to enable the parties to discuss their dispute and try to find some common ground upon which to reach a resolution.

Increasingly we are seeing mediators adopt a more evaluative role, whereby they will offer their opinions and views on the merits of the underlying dispute. However, such views are usually made privately to the parties in an effort to help them take a realistic view of the matter.

What are the Benefits?

The cornerstone of the mediation process is the fact that it is conducted in private. All parties will be required to sign a Mediation Agreement in advance, which will confirm that the process is confidential and all discussions will be held on a “without prejudice” basis. This means the parties can be frank and open without fear of prejudicing any litigation. This really is the key to the success of the process as in most litigation the parties become entrenched in their positions and are unwilling to talk openly to each other.

Mediation can be conducted at any time – both before and during Court proceedings. It is without question a quicker and less time consuming process than engaging in Court proceedings, although most mediations do tend to take place whilst proceedings are ongoing.

Another benefit is that mediation allows the parties to explore more creative resolutions. Before a Court, a judge can only decide who is right and who is wrong and, ordinarily, how much money should be paid by one party to the other. In a mediation, a whole number of resolutions can be explored and parties are encouraged to “think outside the box”. We have seen a number of mediations settled on the basis of, for example, a simple apology or a commitment for future orders being placed.

As the mediation process encourages parties to be open and frank with each other, it can also help preserve ongoing business relationships.

What are the Drawbacks?

Many clients worry that being open and frank in a mediation risks revealing their hand to the other side, or are concerned that the other side are simply attending to “go through the motions” and avoid sanctions being made against them. In our experience, parties usually need not worry about such things. In the overwhelming majority of cases, parties attend a mediation in the spirit of trying to achieve a resolution – they do so understanding that the alternative is to commit potentially large amounts of time and money to fighting in Court.

The single biggest drawback to mediation is that achieving a resolution inevitably involves all parties making concessions and agreeing to compromise. Very rarely do parties leave a mediation feeling like they have “won”.

This is a reflection of the manner in which disputes tend to be negotiated and resolved at a mediation. Both sides walk into a mediation with their view of what they should achieve, and these views usually stand some distance apart. By way of a very crude example, in a claim for payment of a disputed debt worth £100,000, one party will expect to be paid £100,000 and the other will expect to pay nothing.

For any resolution to be achieved, each party will have to move from their view of what they think they should achieve and meet somewhere in between. It is the mediator’s role to help facilitate that movement. How far each party moves will be dictated by any number of different factors, which will include an evaluation of the facts, the evidence, the law and other more commercial factors.

Does it Work?

Generally, mediation has a very high “success” rate in that the majority of mediations result in a resolution being reached. Mediators who responded to the Centre for Effective Dispute Resolution’s 7th mediation audit in May 2016 reported that just over 67% of cases had settled on the day of the mediation, with a further 19% settling shortly afterwards.

These statistics support our own experiences. We have acted in numerous mediations over the years and would say that, on average, around 90% of mediations result in a settlement either on the day or shortly afterwards. Those cases that do not settle tend to be the ones that are very complicated and involve a specific question of law that really does need to be decided by the Court.

Even if a matter is not settled at mediation, the parties will almost certainly leave with a better understanding of the other side’s view of the matter and where they stand in relation to any proposed settlement. The issues in dispute should, hopefully, have been narrowed.

Conclusion

Mediation is a very worthwhile process and we will almost always advise clients to attempt it. It can be a quick and cost effective process and almost always results in a resolution being reached, as long as the parties are realistic about what a “successful” outcome might be.

Please contact Richard Tomlinson or Sarah Hickey in our Dispute Resolution team on 0116 212 1000 to book an appointment to discuss your case.

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