Mediation overview and benefits

What is mediation?

Mediation is a type of alternative dispute resolution (ADR). All forms of ADR seek a resolution to a dispute without incurring the full risk and cost of going to a court trial.

Parties cannot be forced to agree to mediation (although the courts are increasingly encouraging mediation and may penalise a party that simply refuses to mediate without very good reason) or to reach a settlement if they agree to mediate. Timing is also key. In many cases, the parties are unwilling or otherwise not ready to mediate at the beginning of a dispute and most commonly mediation works at an opportune and important point (which may vary in each case) after court proceedings have been started.

How does mediation work and what’s the process?

The starting point for almost all mediations is to ensure that the mediator fully understands the dispute and the parties current positions by ensuring that he or she has all the necessary documents and information and often a summary of each side’s position. Once that has happened, a date will normally be set for the mediation. It’s common for this to be a single day as it helps to focus the parties on looking to narrow the issues in dispute.

Mediation works in practice like shuttle diplomacy. The parties will normally be asked to attend a venue and will be in separate rooms. The mediator will then go back and forth exploring issues between the parties.

The entire process is flexible. If some progress is made but a full agreement can’t be reached, the mediation might continue or the parties may agree to adjourn and come back for another day. Momentum is important. If progress is made and the parties are becoming less hostile to each other it’s generally important to progress as quickly as possible so that positions do not harden again.

Benefits of mediation

Going to court is extremely risky and costly. In almost all legal disputes winning or losing is relative. Anything which saves legal fees and reduces risk is generally worth trying. Mediation also tends to reduce the level of animosity between the parties and even where it doesn’t immediately result in a solution, it often changes the dynamic and opens a route to resolving a dispute. Other benefits include :-

High success rate – there are good prospects of a resolution if the parties can be persuaded to mediate, the success rate is over 80%.

Flexibility – whilst there is generally a process which is typical for how a mediation will work, it is really up to the parties and the mediator to decide and this results in a lot of flexibility.

Future relationships – with a lot of disputes, especially family disputes, there is a lot of friction between the parties. The mediation process and a mediated settlement can help in improving relations going forward or at least not making them worse. Mediation is also useful with business disputes where the parties may have an important and/or longstanding relationship which they would ideally like to consider continuing in the future.

Costs – whilst mediation isn’t cheap, the cost of going to trial is far more expensive and even if you win, you are unlikely to get all your legal costs paid by the opponent.

Finality – with a  successful outcome there will normally be a detailed settlement agreement which  will include a mechanism whereby if there is any breach, it can be enforced through the court.

What types of cases is mediation used for?

Mediation is an excellent option in almost all types of disputes. It can be especially useful where feelings are running very high between the parties as a way of encouraging the parties to change their mindset and to try and focus on a solution. The difficult bit is often getting the parties to agree to mediate. In some situations, formal mediation is not viable, typically in low value  disputes or where a business contract requires the parties to arbitrate rather than mediate.

Types of disputes where mediation is common include :-

• Family law mediation -  including divorce, separation, divorce finances, children issues.

• Professional negligence mediation - often with insurers representing the defendant.

• Breach of contract claims - works especially well where the parties have an important and longstanding relationship.

• Inheritance disputes.

• Shareholder dispute mediation.

• Landlord and tenant disputes.

• Neighbour dispute mediation -  these sorts of disputes can be highly personal and emotive, mediation can be a great way to focus on the problem rather than the personalities.

• Personal injury claims - a mediated settlement tends to be a good approach where liability has been admitted but the parties are far apart in terms of agreeing quantum (the appropriate value of damages).

Is there an optimal or usual time to mediate?

A window of opportunity often arises when either or both parties discover that their case is not as strong as they think. Classically this may happen when documents are disclosed or witness statements are exchanged. Another factor will often be when the parties realise just how expensive and stressful litigation is.

We often find that clients worry that if one side suggests mediation, this will be seen as a sign of weakness by the other side and simply embolden them further. This is a possibility but if anything, the opposite is often the case. An important part of any legal dispute is psychology and retaining the initiative. Suggesting mediation to the other side can often convey confidence and can often be a proactive and successful strategic move.

What’s the role of the mediator?

A mediator is someone who is formally trained and qualified in mediating disputes and is generally a lawyer but doesn’t have to be. The mediator is independent and he or she will need to be agreed on as the mediator by the parties.

The primary role is to ask questions, clarify the issues, suggest possible ways forward and explore with the parties the issues between them and to seek to narrow the areas of dispute and look for potential compromise solutions. The mediator does not give advice and  has no power to impose a solution. If a solution still cannot be reached there will be no prejudice to the parties in terms of parallel court proceedings (in other words it’s all confidential and there is no direct impact on the court process).

Who chooses a mediator and how?

In most cases the way in which a mediator is chosen is a matter to be agreed by the parties, more usually through their lawyers. A common approach is for both sides to nominate a few mediators and to see if this can result in agreement. It is possible for parties to a dispute to decide at a very early stage to try mediation, even before they appoint lawyers for the dispute. Some firms, of lawyers, including ourselves, have qualified mediators who can be appointed direct where disputing parties agree. Another possibility is to find a mediators using a trusted organisation such as CEDR.