GETTING THE MEDIATION PROCESS OFF THE GROUND
Mediation is an opportunity to find a strategic resolution to the presenting issue and to continue to apply the principles. The more effectively we can apply them, the better the result of the mediation is likely to be. The key to success will be using the tools to think clearly and make good decisions.
It is impossible to provide an exhaustive list of matters that might be suitable for mediation but essentially these will be matters that do not require an absolute decision about a point of law to be made. Having said that, even when such a decision is required, mediation may be key to ensuring that people can live with and integrate that decision into their day-to-day lives and avoid future litigation.
We will focus here on matters in which court or tribunal action is contemplated or in progress including:
- Disputes over payment terms, fulfilment of contracts including non-payment, how the contract was carried out or whether there was a breach of contract, warranty or guarantee covenant.
- Building contracts where builders are asking for money and clients are requesting outstanding matters to be completed or an itemisation of work invoiced.
- Disputes between property owners, developers and neighbours ranging from disagreements about options and valuations to arguments between neighbours including trespass, harassment, excessive noise, breach of boundary line or wall or landlord and tenant disputes ranging from dilapidations to rental payments.
- Disputes between financial institutions and their clients or customers relating to trade or financial instruments, compliance and regulatory matters.
- Disputes between individuals and professionals or local/central government organisations including incidents where people have suffered injury, financial loss or some other damage.
- Disputes between employers and employees (or former employees) where employees are bringing claims of discrimination or unfair dismissal or where the employer is alleging that the employee has taken away clients where they had agreed not to.
There are a few ways that the mediation process might be set in motion depending on whether the parties have advisers or not and what stage in the legal process they have reached.
Moving to mediation without legal advice
If you do not have someone acting on your behalf there are a number of actions you should take.
Find a mediator or mediation provider
It is often helpful to provide the other person with a choice of mediators or mediation companies and to set out the costs that you have been quoted. You can find a list on the Ministry of Justice website (http://civilmediation.justice.gov.uk) with a standard set of fees for small claims, as well as a choice of registered mediators.
Providing information in as transparent a way as possible allows the other person to have some choice and ownership in the process and not feel pushed into it. As I have already mentioned, most mediators or mediation providers will have a confidential discussion with the parties to help them decide if mediation is for them or not. It is worth establishing if this is possible so that the other party has some ownership and power in the process.
Find a suitable venue
Some mediations can take place over the telephone. In other cases three rooms or more will be needed (one for each of the parties and the other for the mediator to bring the parties together as and where necessary). The mediator or mediation provider will be able to advise on this and may be able to organise it but there are generally costs associated with this.
Identify dates
It is useful to identify three or four dates as options that might work. Generally, once you have decided to go ahead with mediation, it is helpful for it to take place as soon as possible to avoid further escalation of the issues.
Invite the other person to mediate
The invitation can be very informal. It is worth marking it ‘Without prejudice save as to costs’. ‘Without prejudice’ indicates that you are making a genuine attempt to resolve the situation without making any admission as to guilt. The phrase ‘save as to costs’ means that the decision not to mediate may have costs penalties for the other party.
Case study
Mrs James and Mrs Kenefick were in a dispute over a shared boundary. Mrs James invited Mrs Kenefick to mediate the matter in 2014 and Mrs Kenefick refused. A financial settlement with respect to the claim was reached in 2017 at which point Mrs James had incurred £80,000 of legal fees and costs and Mrs Kenefick had incurred £25,000 of her own fees and costs.
The court decided that Mrs Kenefick had to pay Mrs James’ £50,000 in costs in addition to her own costs partly on the basis that the same settlement could have been reached by a mediated settlement in 2014.
A form of words for an invitation to mediate is set out below. You should note that sometimes this kind of letter also includes a threat that if mediation is not agreed to within a certain timeframe then the next step for the writer to take will be that the writer will take the matter to court. This has not been included below.
Without prejudice save as to costs
Dear []
Re: Our partnership dispute
Following our [discussion/correspondence], I would like to propose that we mediate the issues between us with a view to coming to a successful conclusion for both of us.
I have contacted [mediation provider] who I found through the Ministry of Justice website http://civilmediation.justice.gov.uk/. They have [given me a choice of three mediators, details of which are attached] [OR] [confirmed that they work within the court mediation scheme and will provide us with a mediator of their choice in accordance with that scheme]. They have told me that you can contact them independently to have a confidential discussion with them about how mediation might work and whether you might want to go ahead.
I understand that the costs would be £… plus VAT per party for a … hour mediation.
I am available for a mediation on …. Once you have decided whether or not you would like to mediate, do let me know if you can make any of those dates or let me have a selection that might work for you.
Kind regards
Moving to mediation with legal advice
When you take a case to legal advisers, they will undoubtedly advise you on the merits of the case and when, whether and how to take the next steps to mediation. Factors that they will consider will include:
- Are you likely to get a better settlement at mediation if certain parts of your case are investigated or proven at an early stage?
- Is it better to start the litigation process in order to demonstrate you have a strong hand and mean business.
- Are you likely to win at court?
- Is the cost of pursuing the claim likely to exceed the value of the claim?
I have never met a lawyer who advises their client that they have more than a 70% likelihood of winning at trial, and so in this sense litigation is always a gamble. Having said that, most lawyers who think that their client has a good chance of success will do their best to pursue the claim and equip them at each stage with strategic as well as legal advice.
When working with lawyers, the most important thing to do is to take responsibility for your decisions and priorities and put your legal advice in that context. If you don’t, you risk underestimating the costs of pursuing the matter including the other party’s costs if you are unsuccessful.
Case study
Joseph was in a shareholder dispute with Will. Joseph had pursued the claim while Will had not appointed solicitors until late in the process in an effort to save costs. Joseph’s solicitors had originally proposed mediation but Will refused as he thought they were bullying him and that he had a much better case.
Will appointed solicitors as the matter neared what was going to be a five-day trial. Will’s advisers had told him he had a very good case and put his chances of success at 70%. He had incurred £20,000 costs and was likely to incur another £60,000 up until the trial which his lawyers had advised him he was not likely to recover. Joseph had incurred £100,000 and was likely to incur another £35,000 for the trial.
At mediation, they came to a number of agreements about what should be done next with the business and saw a way through to being able to work with each other albeit at arm’s length, but Joseph was insisting on Will paying him £70,000 worth of costs. Because Will had thought Joseph had been unreasonable, he was incensed at this. However, he realised that he was placing himself at great risk putting the award of costs in the hands of the judge and decided instead to pay £50,000 in costs to Joseph.
Alternatively, we might regret the effect that we have had on the other party and on our own lives and business when we are successful.
Case study
Andrew was the co-director of a medium-sized, growing app development company. One of the employees brought a claim against his co-director, Melvin, for sexual harassment and against the company for breach of contract, which they decided to vigorously defend.
During the course of proceedings, Andrew was approached by another company with a view to that company buying them. However, the prospective purchaser was put off by the proceedings in progress and particularly concerned about the sort of claim that had been brought against the company.
In the end the company successfully defended the claim. However, Andrew found it distressing to see the employee at tribunal and the mental distress that she was obviously going through which exacerbated proceedings. Following the claim, there were further tacit rumours about Melvin’s behaviour and Andrew felt that the trust that had previously existed in the company and with employees had been significantly eroded which made the job of getting things done and generating motivation and enthusiasm for the future within the business much harder.