Money and Law - Mediation

PUBLISHED: 13:27 18 March 2011 | UPDATED: 16:21 20 February 2013

Money and Law - Mediation

Money and Law - Mediation

If you want to avoid the risk of 'airing your dirty washing in public', mediation can be a good option – and it's cheaper and quicker than going to trial...



In a recent speech, the Master of the Rolls commented that mediation must become an integral part of our litigation culture.

What is mediation?
Mediation is a form of alternative dispute resolution whereby an independent third party (the mediator) explores with the parties to a dispute their relative strengths and weaknesses and assists them to find a compromise that each party is willing to accept.
The mediator cannot impose a solution. He or she tries to move the parties towards a solution, rather than adopting an adversarial approach.
There are several advantages of mediation:

Costs
Mediation is a potential way of settling a dispute relatively inexpensively, in comparison to the costs of going to trial. Although a mediated settlement inevitably involves compromise, it should be borne in mind that even when a litigant obtains an order for costs against their opponent, they are unlikely to recover all their costs on assessment. There is, therefore, almost always a significant amount of irrecoverable cost in litigation. As such, it may make commercial sense to seek an early resolution to the dispute before positions become entrenched and costs escalate.

Control
Throughout the process, the parties and their advisers remain in control and decide whether to settle and on what terms. Once you enter a courtroom, that control is removed and the fate of the parties is placed in the hands of the judge.

Costs sanctions
Frequently these days, a trial judge will have expected the parties to have participated in mediation, and may well want a good explanation if they have not. Judges have a wide discretion when making orders for costs. Failure to attempt mediation may result in an adverse costs order if the judge believes that a party has unreasonably refused to mediate.

Time
Dependent upon the complexity of the case and the availability of a suitable trial window, a claim can take many months and sometimes years to get to trial. Mediation can be set up within weeks of the parties agreeing to mediate and in most cases can be settled within a day or two, thus speeding up access to any cash settlement.

Without prejudice discussions
All discussions at mediation are on a without prejudice basis to encourage settlement. Therefore, any offers or statements made in the course of mediation are inadmissible in evidence, should the case not settle and subsequently proceed to trial.

Confidentiality
If you want to avoid the risk of airing your dirty washing in public, mediation can be a good option. This is of particular relevance if the parties express a desire to maintain their commercial relationship once the dispute is settled.

Results
In even some of the most intractable cases, mediation can get results. Surveys have shown that voluntary mediations achieve settlements in approximately 80 per cent of cases.
If you are still unconvinced as to the benefit of mediation in commercial and civil disputes, I leave you with the words of Lord Justice Ward in Egan v Motor Services [Bath] [2007].
.the parties have between them spent in the region of 100,000 arguing over a claim which is worth about 6,000. In the florid language of the argument, I regarded both of them as completely cuckoo to have engaged in such expensive litigation with so little at stake.
In this case the sheer commercial folly could have been amply demonstrated to both parties sitting at the same table but hearing it come from someone independent. It is not a sign of weakness to suggest it. It is the hallmark of common sense.
Mediation is a perfectly proper adjunct to litigation. The skills are now well developed. The results are astonishingly good. Try it more often.

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