“The Virtues of Mediation”
Mediation remains a powerful and well-known, if still under-used, method of settling disputes between parties as an alternative to Court or Tribunal action (Alternative Dispute Resolution or, simply, ADR).
This is surprising given the clear virtues of Mediation as a cost-effective means of resolving a dispute, in a confidential forum, without even having to commence a Court or Tribunal action. This was highlighted recently by a successful Mediation undertaken by Thomas Hall, a Senior Associate in our Commercial Litigation team, as he explains below.
The Civil Justice Committee’s (CJC) Final Report on ADR and Civil Justice – published in November 2018[1] – concluded (amongst other things) that case law and the Civil Procedure Rules have been too generous historically in their accommodation of those who ignore ADR.
Whilst the CJC acknowledges that there has been in recent times a hardening of Judicial attitude towards the requirement on parties to explore ADR (see for example the decision in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 and the subsequent line of cases), it believes that more should be done by the Court and Parliament to stringently encourage ADR, including Mediation.
This is hardly surprising, given that the uptake of Mediation as an ADR resource by parties to disputes seems to be almost absurdly low – the Centre for Effective Dispute Resolution estimates (in its Eighth Mediation Audit [2]) that in the whole of 2018, 12,000 cases were referred to Mediation, compared with 534,000 claims issued in the County Court between January and March 2018 alone [3].
Mediation is, in my experience, a very powerful tool that enables parties to explore settlement of a dispute in a confidential forum. Other ADR options, such as a “round-table” Without Prejudice meeting, are of course available, but I find that Mediation has better prospects of success than the alternatives.
The importance and utility of a skilled impartial Mediator in this process cannot – in my view - be understated. The Mediator is not there, for example, to form a view on the merits of either party’s legal position, although (depending on the Mediator) they may ask probing questions to challenge the parties’ assumptions. What they will do is work hard to foster discussions between the parties during the course of the Mediation, keeping the focus firmly on the commercial implications of what is to come for both parties – i.e. uncertainty, in the form of ‘litigation risk’, and significant cost expenditure – if settlement is not achieved at Mediation.
I recently successfully completed a Mediation for a client, a leading food service provider. This case, in a microcosmic sense, evidences the importance of parties exploring Mediation.
A contractual dispute was intimated by the other party against my client following a breakdown in relations. My client was faced with a claim in excess of £350,000, attributable to (on the other party’s case) direct losses caused by the breakdown in relations between the parties. Pre-action correspondence was exchanged, and little progress made, as the parties’ respective positions appeared to be entrenched.
The parties attended Mediation and a settlement was agreed which saw my client pay less than 6% of the total sum claimed. Putting to one side the clearly significant reduction in principal liability, and the costs that would have been associated in defending the claim, my client has benefitted from the unquantifiable freeing up of its Senior Management Team, who would have otherwise been heavily involved in the claim for potentially 12 months from issue of the claim to trial.
My client was very pleased with the result, and its Managing Director commented as follows:
“Having been through a legal dispute of a commercial nature lasting a year culminating in a mediation process, my greatest single learning is that it is not the strength of one’s case that wins the day, rather the strength of the legal team. Tom’s superior tactical planning and knowledge of law meant that my company’s exposure to threat was greatly reduced. It was clear from the outset that the opposition had been ill advised and their case further weakened by use of agility and creative thinking on the day. Tom confidently guided us through the mediation process with a clear game plan that allowed for further positioning and was well versed at using the mediator as a tool to achieve the outcome.”
If you are faced with a commercial dispute, whether prior to or following the issue of a claim, please contact BPE’s Commercial Litigation Team, who are experts in Alternative Dispute Resolution, and count among their number two Partners who are also accredited Mediators in their own right, who accept instructions to undertake Mediations on behalf of third parties to existing disputes.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.
[1] CJC ADR Working Group, November 2018