Mediation is one of the most popular forms of Alternative Dispute Resolution (“ADR”) and is often a very successful way to resolve disputes. The parties appoint an independent third party who runs the day and assists the parties with the negotiations. The mediator has no allegiances and is there purely to see if the parties can resolve their issues without incurring further costs or, at the very least, narrow the issues between the parties.
As a firm, Mason Hayes actively encourages all of its clients to give serious consideration to mediation. This is particularly important when considering the recent dramatic increase on court fees. Clients should consider, not only the possibility of losing at court, but also the costs of progressing a case and the risk of receiving an adversarial costs order if they unreasonably refuse to engage in ADR.
It is important to ensure that the client is fully informed of the risks and purposes of the mediation before it is organised. The client should be aware that the day is focussed on trying to reach a compromise between the parties that each party feels comfortable with. It is not about one party winning and the other loosing as it would be in court. It also takes away the risk of having a third party impose a solution on you which is binding and which you may strongly disagree with.
Having said this, it must not be forgotten that there are limits to the use of mediation. For instance, if there is a particular point of law which is either unclear or is yet to be determined then this may necessitate proceedings and a final hearing. Further, mediation can be a costly exercise and if the parties have no intention of compromising or conceding any of the issues then it is not always a productive solution.
In a mediation the client is able to stay in control of the negotiations but must always be mindful of what the worst case scenario may be in terms of outcome and costs if the mediation fails. The client can then make an informed reasonable assessment of the situation and decide how far they are willing to concede legal issues and costs in the spirit of compromise.
Mediation should always be considered no matter what the value of the claim. I have frequently conducted mediations via telephone with the Small Claims Mediation Services on smaller matters under the value of £10,000 and have found it a very effective way of settling claims early without having to incur the costs of a final hearing. More recently I have had the opportunity to accompany the Managing Director of the firm to a mediation in London on behalf of a client.
The experience of mediation on a larger scale helped me to see and understand the benefits of ADR in action. Prior to the mediation, the parties were far apart on the contentious issues and neither party were willing to concede any points in correspondence. However, thankfully the case did manage to settle at the end of a long day of negotiations (although admittedly it did run over the allotted time due to some last minute changes of details!).
The important thing for your client to remember is that it is highly unlikely that either party is going to leave a mediation feeling that they got everything they wanted. The process is about compromise and making sensible, reasonable offers.
Until next month,
Kimberley
