Opinion

The power behind introducing mediations to your business

6 min read

03 December 2015

Originating from America, mediations are a relatively new concept in England and have only been in practice since the 1990s, but they can have a positive outcome and prevent angry legal battles.

The popular perception is that most legal disputes end up in court. However, in reality very few cases actually end up going to trial because: 

  • Trials are incredibly stressful, time consuming and expensive for all parties involved.
  • During trials, the judge is the only person who is in control. Also a good case can be lost on the performance of a witness which means that the outcome can be unpredictable.
  • A result that is legally right does not necessarily present the best practical or commercial solution to the parties. 

As a consequence, the vast majority of cases settle, either as a result of negotiations between lawyers or following what is known as a mediation.

Originating from America, mediations are a relatively new concept in England and have only been in practice since the 1990s. The concept is to gather all parties involved and discuss ways to reach a mutually satisfactory outcome.

Mediations are a very good alternative to trials as they are flexible and are led by the parties, meaning that between themselves they find a common ground and reach a solution that suits everyone involved. 

Mediations are a consensual process. However, the courts are taking an increasingly proactive stance in encouraging parties to mediate with the enforcement of punitive costs orders which may be applied if a party refuses to go through a mediation without a reasonable explanation. 

The mediator will be jointly appointed by the parties and can come from any background – although typically they tend to be lawyers. It is up to the parties to choose someone whose background and experience is best suited to the dispute. 

Typically, mediations will start with an “open session” meeting, where each party presents its case. The meeting is chaired by the mediator, but at this early stage in the process his/her only function is to keep order and also ensure that the meeting takes place within a reasonable time frame. 

In a mediation, all discussions remain confidential which encourages openness between the parties. 

The mediator may also give a short presentation on what the parties can expect to happen during the day. It is important that some thought is given to the approach that is to be taken during the open meeting. Who is going to act as the advocate? What stance is going to be adopted? 

When the open session closes, the parties then move to individual rooms – this is known as the “closed session”. At this stage, the mediator will run between the parties in their respective rooms and will try and guide the parties towards a solution. 

The mediator must remain neutral throughout the process and cannot provide any advice on the legal aspects of the parties’ respective cases but is able to advise on negotiation strategies. The mediator’s primary role is to try and guide the parties to an agreed, mutually satisfactory outcome. 

If the mediation is successful then most mediators will insist that the parties sign a record of what was agreed as a result of the meeting. This can either be formal heads of agreement, a deed of settlement or a consent order to be filed at court.

This is to ensure that what was agreed becomes legally binding. If the mediation does not result in a settlement, then most mediators will make themselves available subsequently to provide whatever assistance is needed to achieve the best outcome.

As a rule, most parties will settle either on the day or within a week of the mediation. 

To ensure the success of the mediation, it is important to remember to: 

  • Choose the right mediator – Experienced solicitors will be able to make recommendations because they will have an understanding of the market. 
  • Be well prepared – you should prepare for a mediation like you prepare for a one-day trial. 
  • Shape your strategy – Who is going to lead on the advocacy and the negotiations? Are you going to negotiate in increments, or are you going to state your highest position early in the negotiation?
  • Who is going to do what on the day? Have you decided who the lead advocate will be in the open session? How big a team do you want to have in attendance?
  • Make sure expectations are managed – Mediations are based on compromise and no one “wins” or “loses”.

Make sure that there is someone there who has authority to settle. Nothing irritates a mediator more than getting to the end of a mediation only to find that no one can bind the parties in to a settlement.

Peter Brewer is a partner in the commercial and private client litigation team at Clarke Willmott