Elizabeth Repper: Mediation – why and how businesses and individuals are using it to try and solve disputes
Elizabeth Repper of Keating Chambers
When businesses or individuals fall into dispute, they often feel their only option is to go to court.
Alternative methods of resolving disputes are however encouraged by the courts.
Mediation is one form of what is known as Alternative Dispute Resolution (or "ADR”).
Here’s what mediation involves and why and how it is being used to try and solve disputes.
Why are parties choosing mediation?
Many do (and should have) in mind that, although mediation is not compulsory, if a party unreasonably fails to engage in ADR (even if it wins the litigation), it can expect to be penalised in costs (see for example PGF II SA v OMFS Company 1 Ltd  EWCA Civ 1288).
Some however favour mediation for wider reasons, including that it can take place early, before positions become entrenched or legal and other costs mount up.
Some like that in mediation it is the parties who have control over how the dispute is solved, rather a third party judge or arbitrator.
Some want a process that will take place in private and without the publicity of a courtroom or an online judgment.
Some want the opportunity to meet face to face with the other party in a formal setting and, with the help of a neutral mediator, try to understand positions and get to the bottom of the dispute.
Some want a process that can be moulded to the particular dispute in hand, where parties can agree common sense solutions that meet people’s needs (including solutions courts can’t offer), such as returning documents or fixing something.
When do you mediate?
Mediation can take place at any time, even before court proceedings have been issued.
Indeed, the Practice Direction for Pre-Action Conduct and Protocols states "litigation should be a last resort” and parties should consider whether negotiation or some other form of ADR "might enable them to settle their dispute without commencing proceedings.”
In construction cases, for example, a mediator is sometimes brought in whilst a project is on-going or at final account stage.
Of course, the earlier mediation takes place, the less information each party will have about each other’s case. The later mediation takes place however, the more danger there is of incurred costs and entrenched positions rendering the case incapable of settlement.
The key question to ask before deciding to mediate is this: do you know the scope of what you are trying to settle?
How do you organise a mediation?
All parties to the dispute must agree to mediate. Then, the parties must agree who will be appointed as mediator.
The mediator must be someone independent and impartial. Most mediators are appointed as facilitators, and therefore not to give a decision or view on the merits. Some parties do however agree to request that a mediator evaluates (and therefore gives a decision) either during the mediation day or, if the case doesn’t settle, shortly afterwards.
The parties must also agree a date for the mediation, a venue, the length of the mediation (usually 4 or 8 hours, subject to extension by agreement) and the mediator’s terms of appointment.
Once appointed, the parties will be sent a draft mediation agreement. All mediation agreements differ, but (as it is one of the tenets of mediation) it is standard for there to be a clause saying (subject to limited exceptions) the mediation is confidential and without prejudice.
All parties must agree to bring to the mediation someone who has full authority to settle the dispute. Without this no settlement can be reached.
The mediation will only commence once everyone attending (including the mediator) has signed a mediation agreement.
How does mediation work?
The mediation process is not set in stone.
A facilitative mediator is likely to listen to each party privately and use their knowledge and experience of the subject matter in hand and the mediation process to ask each party testing questions.
The mediator will strategise and try and find a path to resolution. This mediator may, for example, suggest certain individuals meet to share information, say how they feel about the case and discuss options.
If agreement is reached, it is standard for mediation agreements to say that the dispute is only settled in a binding way once that agreement is written down and signed by the parties.
How do you prepare for a mediation?
Mediation is not the place to repeat arguments that have already been made and rejected.
Always prepare with the time allowed for the mediation day firmly in mind and aim to hit the ground running.
·Understand what your case is at its highest (i.e. the total value of any claim, interest, VAT and anything else you seek). Late in the day requests are best avoided.
·Know what is potentially coming next if the case does not settle. Will proceedings be launched? What will be the costs? Can you fund litigation? What’s your best and worst outcome? Can the other party pay if you win? How much of your personal or business time will be required to prepare for trial?
·Consider carefully, how did the parties find themselves here? Do your points need more or better explanation (perhaps with the help of a document or photo)? Are there issues bubbling under the surface that need to be faced?
·Ask yourself, what are the potential solutions? What might you be able to compromise on? What could you live with?
·Think about the other party. What might they be looking for? What process might suit the particular dispute best? What is their best and worst outcome if the case doesn’t settle?
And most importantly…
Always remember that parties attend mediation voluntarily.
The mediator has no power to insist parties do anything, including continuing with the mediation if they feel they aren’t getting anywhere.
All attendees must therefore buy into keeping the process constantly moving forward and towards resolution.
Elizabeth Repper, barrister and construction and property mediator at Keating Chambers