Step 3: Going for Mediation
You might be interested in reading about the Small Claims Mediation Service.
Mediation is a form of Alternative Dispute Resolution (ADR) and is encouraged by the Courts so that the Parties can attempt to settle matters in the most cost effective and timely manner. The key features in mediation are:
1. Neutrality
A neutral facilitator works with the parties to assist them to reach their own solution amicably.
The mediator is there simply to facilitate agreement between the opposing parties - essentially by working with each of them to identify an outcome which they will find acceptable (if not optimal).
The mediator will then seek to secure agreement at or around that point; This is the parties' call - not the mediator’s.
There is no point therefore in trying to curry favour with the mediator or seek to enlist their support for one’s case as opposed to the other side - the mediator is not adjudicating, nor arbitrating and will keep their opinions as to the merits of a case to themselves.
2. Voluntariness
All parties to a dispute must be agreeable to putting their dispute to mediation.
That said, in civil cases, unreasonable refusal by a party to enter into mediation can result in them being penalised on costs if litigation is pursued through to trial.
For Family Law matters it is compulsory to attend a Family Mediation Information and Assessment meeting before making a family law application.
3. Various session-structure
Depending on the subject of the disputes, mediation can take place in several sessions.
Civil and commercial disputes usually take place in one session, typically a full day (although under the Ministry of Justice online directory service providers offer shorter sessions, sometimes on the telephone, for disputes where the value of the claim is below £50,000).
4. No set procedure
There is no set procedure for mediation.
The mediator may discuss the case with each party in turn in private sessions (sometimes called caucuses), in joint sessions with both parties together, or usually a combination of the two.
There are at least 10 possible advantages to this approach…
It is a confidential process by agreement.
It is non-binding unless an agreement is reduced to writing and, as such, a decision or Judgment is not thrust upon the Parties.
It has an informal process that either Party can discretely attempt to influence.
It is not adversarial but evidence and the skills of the Mediator can be used in a persuasive manner.
The possibility of maintaining business and personal relationships is far greater than other formal proceedings.
It gives the Parties a better chance of understanding the strengths and weaknesses of its own position and that of the other side.
Usually the Mediation will take place over a single day with perhaps say two or three days preparation beforehand for the Parties and the Mediator.
The overall cost of the Mediation process is far less than other formal proceedings.
As high as 85% of disputes that use mediation settle, if not on the day shortly afterwards.
The scope for the shape and nature of any agreement is far reaching and may sit outside the normal contract remedies.
NB: There are two Additional Alternative Dispute Resolution approaches which can be considered at a later stage (see Step 7), if necessary;
1) Adjudication
2) Arbitration
Steps of the group discussion:
In joint sessions the parties (and/or their lawyers) may be invited to make a statement.
This will be an opportunity for each side to tell the other how they see the dispute and may be an opportunity to vent feelings.
Each side will be encouraged to listen to the other and not to interrupt.
The mediator (or occasionally the parties) may ask some questions, but there is no cross-examination.
Attributes of the private discussion:
In the private sessions the mediator will attempt to establish the real interests of the parties (rather than the position they have taken in the dispute) and any options for settlement.
The private sessions are strictly confidential and the mediator will not disclose anything to the other side without the party’s permission.
The mediator may then work towards a settlement by encouraging the parties to make offers and counter-offers which the mediator shares with other side until a compromise is reached; this is called shuttle mediation.
Other options might be tried, such as private discussions between the lawyers or joint ‘brainstorming’ sessions to explore settlement options.
What if the parties reached an agreement?
If the parties are able to reach a settlement, an agreement is usually drawn up which is signed by the parties and is enforceable as a binding contract.
There may be further steps to take, such as payment of money or a transfer of property and the agreement would usually set out a time-scale for these things to be done.
The agreement may dispose of all or part of the dispute, or might deal with how the remaining issues are to be resolved (for example by obtaining a neutral evaluation).
If the parties are represented, the agreement is usually drafted by the lawyers.
In other cases the mediator might help the parties to draft a suitable agreement.
The parties are not bound by any offers or anything said unless or until an agreement is reached.
All discussions are “without prejudice” in that they cannot be referred to in court, and confidential.
Top 10 tips on how to prepare for mediation
1. Think about what you need to take, i.e.:
Key facts about the dispute (dates etc.).
Key evidence (documents etc.) that you may need to show the strength of your case to the other party.
Legal authorities (cases, statutes etc.) establishing the strength of your case.
Key information that you may need in negotiating a settlement (e.g. financial information).
2. Ensure you have authority to settle!
Do you need to consult with anyone else (such as a partner or your boss)?
What is the scope of your authority?
Does anyone else need to be present at the mediation, or at least contactable about possible settlement options?
3. Know your BATNA (Best Alternative To a Negotiated Agreement)!
What options are open to you if you don’t come to an agreement?
Terminate the contract, go to court or choose arbitration?
How good is this alternative?
There are ways of evaluating monetary claims.
For example: if you think you have a 70% chance of winning £20,000 in court, this would be worth £14,000 (assuming you did not incur any legal costs). This means that there is a 30% chance that you will lose. If the other side’s claim is for £2,000 and you would be liable for their costs of £10,000, the risk could be evaluated at £3,600 (£10,000 + £2,000 x 30%). You then need to deduct the risk of losing from the chance of winning. In this example, the monetary value of the court option would be assessed at £10,400 (£14,000 - £3,600). This would be your “tripping point” or “bottom line” in negotiations – if you don’t get at least £10,400 you might be better off trying the court option. You should also bring other factors into account though. Negative factors which would reduce the bottom line might include factors such as the delay, stress and waste of time preparing and presenting a court case, or the wish to avoid publicity. Positive factors which increase the bottom line might include factors such as the benefit of obtaining a legal precedent.
4. Be ready to educate the other side about your BATNA!
This is not the same as making aggressive (and possibly empty) threats.
A calm, confident and rational explanation of why their settlement offer is not good enough will be more convincing.
5. Estimate the strength of your BATNA!
Be ready for them to educate you about it.
However, convinced you are about the strength of your case; keep an open mind about the possibility that you are wrong.
You might have had legal advice suggesting that you are likely to win - so might they.
6. Think about your interests!
Know your goal!
Apology? Revenge? Money? Time? Confidentiality? Assurance what happened to you or your relative cannot happen to anyone ever again?
7. Think about the interest of the other side!
What do they want out of this dispute?
Do they have cash-flow difficulties?
If so, might they accept less money if you can pay quickly?
Do they need a reference?
Do they want to finish the job?
Do they want to keep the dispute confidential?
8. Think about possible settlement options!
Particular ways of satisfying the interests of both sides.
Be creative and make sure you “don’t leave any money on the table” for example by overlooking a possible win-win solution.
9. Prepare your opening statement!
This should take into account the matters considered above.
While presenting your view of the dispute, try to create a problem-solving atmosphere and establish a rapport with the other party, the mediator and any others involved (lawyers, experts etc.)
Show you are reasonable, prepared to listen and to keep an open mind.
10. Be aware of the “attribution error”!
The attribution error is the common psychological phenomenon.
Whereby people tend to attribute their own actions to their circumstances (situational factors), but think the behaviour of others is due to their personality (dispositional factors).
For example, if I put the fence in the wrong place it’s because I was given the wrong plans; if my neighbour put it in the wrong place it’s because he is a neighbour from hell.
This means that you are likely to think that your opponent is unreasonable, and that they are likely to think the same about you.
The answer is to separate the people from the problem.
The ideal situation is where both sides realise that a problem has arisen which is causing them both a lot of grief and join forces to try and sort it out.
And finally…
Put plenty of money in the parking meter and prepare for a long day! Take plenty of refreshments and a good book. You may be left alone for long periods of time while the mediator is talking with the other side (although a good mediator should leave you with plenty to think about).