Over the last decade, the courts have given clear indications that if parties wish to proceed to court, they must first have tried a form of alternate dispute resolution (ADR). The only exception is where there is a very good reason not to have done so, but this runs the risk of the parties being handed down an adverse costs order.
ADR, and in particular mediation, is therefore being used more frequently as a way of resolving disputes without the matter reaching court. There are many trained mediators available for the parties to choose from and each has their own style.
Of course, the facts of any given case are different, and the objectives and priorities of a party in a dispute will vary, so the basis of any mediation will be unique, and should be treated as such. However, as I discuss in this article, there are some fundamental points which, if considered with your clients, will give them a competitive advantage when considering and taking part in a mediation.
Deciding when to mediate
There is no golden rule for determining the ‘right’ stage in a dispute at which to attempt mediation, but it is usually best to do so as soon as possible. It is very important to move quickly towards mdiation in smaller disputes, particularly where a conditional fee agreement is in place. The mediation is then centred not around costs, but around damages. I have mediated several cases where the damages are in the region of £20,000, but costs alone are already over £30,000. These cases are much harder to settle at mediation and can, if the mediator is not careful, become a mediation between the lawyers on both sides, as they try to recover as much of their fees as possible.
With property-related disputes, it is often advantageous, where practical, for the mediator to carry out a site visit prior to the mediation, possibly in the presence of the experts or other advisers
That said, it is possible to mediate too early. An example of this is when the parties do not have all the necessary information about the other side’s case, and therefore are unable to make informed choices at mediation. A considerable amount of the day is then spent trying to understand the other side’s case. On any mediation day, a certain amount of fact-finding is inevitable, but it should never be allowed to take up the majority of the time you have. One tactic deployed in mediations by parties is to use the process as a form of discovery, but this will almost certainly derail a potentially successful mediation, as it becomes a one-sided negotiation.
Choosing a mediator
Using the right mediator for a dispute is one of the most important decisions you can make in the process.
Historically, there has been only a small selection of mediators to choose from, but there is now a plethora at your disposal. Research has shown that lawyers will, wherever possible, select a mediator that they or their colleagues have used successfully in the past.
Most mediators are part-time and have another career alongside their mediation work, such as law, surveying, engineering or media. Nearly all full-time mediators will have had a different career prior to mediation, and therefore come with knowledge of a specialist area relating to their previous profession. As a qualified chartered surveyor, I tend to be chosen to mediate property-related cases, where I can draw on my previous career experience.
When deciding which mediator to use, it is important to consider if it is an advantage or disadvantage to your client’s case for the mediator to have knowledge – perhaps expert – of the subject at the centre of the dispute. For example, in a property-related case, an experienced mediator with a background in property will be able to quickly identify and understand the issues at the heart of the matter, and bring them to the surface.
Perhaps more importantly, this may allow the mediator to expose the weaknesses in the other party’s case. As the mediation progresses, the mediator needs to adapt and ask more probing questions of the parties and their experts, if present. The mediator’s property experience and knowledge will allow them to do this more effectively and therefore help the parties to make a realistic risk assessment of any possible settlement.
Do bear in mind, however, that it may be difficult for a mediator with expert knowledge not to judge which party they believe has the stronger case – it may influence how they work with the other parties. This difficulty does not just apply to property-related disputes, and is used by some advisers as a reason to choose non-lawyer mediators.
Every mediator brings their own style to the table: some proactively help the parties reach a solution; others might take a more passive approach and consider their role to be purely facilitative. However, a proactive mediator is less likely to be criticised for leaving the parties on their own for long periods of time (which can stop the flow of the mediation, for example) or for permitting nothing to ‘happen’ in the mediation until late in the day.
A telephone discussion with the mediator prior to appointment is very useful in order to gauge their background knowledge and mediation style to see if it suits the profile of the case and understand in advance how they envisage the day playing out. This information can assist discussions with the client in reinforcing the three fundamental principles of mediation, discussed later in this article.
Choosing a timescale
Think carefully about the time you want to allocate for mediation. Should it be half a day, a whole day, or even longer? Some mediators recommend the use of a time-limited mediation of three or four hours. A shorter time frame can help to focus the mediation and stop protracted statements or negotiations, and it represents a cost saving for your client, too.
More complex cases, however, may warrant a more open-ended timescale to allow for the finer details of the case to be fully explored and discussed. The parties need time to properly consider their options, so it’s important that the mediation is not rushed. Having said this, after seven or eight hours of mediation, it can be more difficult for parties to reach a logical settlement.
Preparing for the mediation
Preparing yourself, your client and the mediator efficiently is crucial for a successful mediation experience.
Nearly all first-time participants are nervous of a mediation and unsure of what to expect. Even those that have attended mediations in the past may be apprehensive because the dispute and/or the mediator has changed.
It is important that the three fundamental principles of mediation are explained to the client when the idea of mediation is first discussed.
- All communication between the parties and the mediator is confidential, unless one party instructs the mediator to divulge it to the other.
- Any offers or proposals are not binding until an agreement is signed at the end of the mediation.
- The mediator’s role is not as a judge or arbitrator; they do not decide who is right or wrong. The parties remain in control of their dispute and should only agree a settlement if they wish to do so.
Most clients will add an emotional dimension to the mediation. The extent to which a client’s personal feelings affect proceedings will depend on their personality and the specific details of the dispute. It is important that all participants help the parties to manage their emotions, to increase the likelihood of reaching as measured and lasting a resolution as possible. This process should be ongoing as your client prepares for the mediation.
Lawyer and mediator
The key to being a good mediator is the ability to build rapport with the parties and their representatives as soon as possible, ideally in the initial discussions with the clients’ lawyers on the telephone. The more information you can give the mediator at this stage, the better. Nothing confidential should be discussed until the mediator is appointed, at which point they will be covered by the confidentiality of the mediation. After that, anything the mediator discusses with one party or their solicitor will therefore not be discussed with the other side without the mediator gaining the party’s consent to disclose it.
Once the mediator is appointed, they will need to receive the ‘bundle’ that should contain the information they need to prepare for the mediation day. Copies of court papers, position statements and expert reports are usually all included. It is helpful for the mediator to receive these papers a few days beforehand, in order to consider them thoroughly and contact the representatives to discuss any points arising or additional information required. All too often, insufficient time is given for the mediator to consult the bundle, and it becomes more difficult for them to prepare fully for the mediation, which obviously can be detrimental to the process.
With property-related disputes, it is often advantageous, where practical, for the mediator to carry out a site visit prior to the mediation, possibly in the presence of the experts or other advisers. This can be on the same day as the mediation or beforehand, depending on the circumstances. Although plans and photographs should be included in the bundle, there is no substitute for seeing the matters relating to the dispute at first hand.
In the case of boundary or neighbourhood disputes, I always recommend that, whenever possible, the mediation takes place at the properties at the centre of contention. This has the advantage of not only making the parties feel more comfortable, as they are on ‘home ground’, but also allows the mediator to explore different practical options on site, rather than relying on photographs and plans. I mediated a case last year from which a settlement was reached, but the following day, when the parties returned to mark out the agreement on site, the solution was not possible due to access problems. The matter had to return to mediation to be renegotiated. This involved added costs and uncertainty for the clients.
Experts are often used in property-related disputes. If the parties appoint their own experts, this will almost always result in differing opinions (which support their client’s case!). It is very helpful to the mediator and the mediation process if, prior to mediation day, the two experts have discussed those matters that are agreed and those where their opinions differ. This will allow the mediator on the day to concentrate on the differences between the experts, rather than wasting time exploring points on which the experts have already reached consensus.
Experts almost always disagree on property matters. In some property-related disputes, I have met with the experts prior to the mediation day, and have been able to agree on the differences between them. This reduced costs, as the experts did not need to attend the mediation. In addition, fewer points needed to be considered on the day, which resulted in further time and cost savings and earlier settlement of the matter.
The mediation day
Before the start of the mediation, the mediator should check that the room(s) selected are suitable and that occupants cannot be overheard by the other party if they are in adjacent rooms. It is important to make all parties feel as comfortable as possible, so attendees should have access to food and drinks, and the room should be spacious with plenty of natural light and air. Access to Wi-Fi is also very helpful.
As already indicated, material facts should be disclosed confidentially to the mediator. You have to differentiate between the facts of the dispute (which are known to both parties), and confidential matters that one party does not want the other to know. In my experience, parties will almost always hold back on points they wish to remain confidential, until the mediator has built a rapport with them, which is likely to be either very close to the mediation day, or during the day itself. The point here is to let the mediator know as much detail as you are comfortable with early in the day – it can be very frustrating for a mediator to be told something late on in discussions that could have helped the parties come to a resolution much sooner. The mediator needs to have built sufficient rapport to be trusted to carry the confidentiality of all information disclosed throughout the day.
It is accepted that the parties prefer to keep their final settlement position between themselves and their lawyers. Mediators know that the ‘final figure’ given early on will change as the day progresses. I define a successful outcome as one in which the parties walk away with a settlement they can live with, and wake up the next morning believing they have made the right decision. However, if the parties are determined to proceed to court, even the very best mediator will not – and should not – persuade them otherwise. The mediator will, however, have used their skills to allow the parties to make their own risk assessment of their options going forward.
Mediations that do not settle
What happens if settlement is not achieved on the day? Certainly, the mediator’s assignment should not end when the parties walk away at the end of the day. The mediator should be able to offer some further suggestions or alternatives to the parties to help them move forward. Below are some examples.
- The mediator offers to reconvene the mediation after additional information has been uncovered or provided by an expert or other person.
- The mediator meets with the experts separately to agree as many points as possible at a ‘without prejudice’ meeting. The mediator could then either re-engage with the parties or recommend the experts provide a report to the parties which may help them agree a settlement.
- The mediator remains in contact with the lawyers to suggest ways that the lawyers can facilitate moving matters on.
In my experience, the use of ADR and, in particular, mediation is becoming increasingly popular as a means of reducing the substantial amount of time and expense involved in resolving disputes for both litigants and the courts.
As the client’s lawyer, you will, on behalf of your client, need to make the important decisions on both the time to instigate mediation, and the appropriate mediator, based on their professional background, mediation style and experience, and professional reputation among colleagues. Early discussions with the mediator are crucial in giving you an insight into how to manage both process and mediator. The best use of a mediator is to make them part of ‘the team’. They should always maintain their neutrality and confidentiality, and so will also be working in a similar way with the other side.
A consideration of the points I make in this article can provide your clients with an improved prospect of success in a property-related dispute. Where the properties can be visited, I have found it very useful to do so. Experts almost always disagree on property matters, so holding pre- and post-mediation meetings with the mediator can be a very effective method of helping the process move on. All those involved in the mediation will have more respect for a mediator who can demonstrate a knowledge of the subject of the dispute, thereby increasing the chances of the mediator working successfully and ensuring a satisfactory outcome.