What are the benefits of mediation or ADR as it is often called?
There are many powerful reasons to explore mediation as a way to settle a legal dispute.
- There is now considerable judicial pressure on both sides to a legal dispute to explore mediation as a way to settle the dispute without recourse to a court hearing
- Even a mediation that does not result in a successful settlement agreement is likely to benefit the parties in clarifying and narrowing the focus of the dispute so that the eventual litigation is more focussed and less costly and time-consuming
- The failure to resort to mediation before launching legal proceedings can have serious consequences for the successful party as they may find that their costs are not allowed against the defeated party
- The above points are discussed and illustrated on more detail in my article in Barrister Magazine.
- According to the CMC Mediation gives the parties the freedom to put litigation aside and to enter into a “without prejudice” commercial negotiation in an effort to find a settlement.
- One of the benefits of mediation is that anything can be tried in an effort to structure a deal, and this can be abandoned if it is not acceptable without it endangering a party’s position.
- One of the advantages of mediation is that the parties are not committed until the deal is put into writing and signed.
- Dispute resolution mediation puts control of the process into the hands of the parties and avoids the risk of losing control of it to a judge both in terms of the outcome and the risk of an adverse costs award
Talk me through the mediation or ADR process
The mediator will be appointed by the parties under a written mediation agreement and the fee agreed will be shared by the parties and paid in advance. The mediation will take place at a venue agreed between the parties.
The process is conducted “without prejudice” but leads to a binding settlement if the parties reach an agreement and it is written down and signed by them. Settlement agreements will often be made into a Consent Order to end the legal proceedings, which may also be a Tomlin Order (where the terms of the settlement are kept private on an attached Schedule), for sealing by the court.
If legal proceedings have not yet actually begun then simple heads of terms written down and signed by both parties will often suffice.
A mediation is confidential and the information discussed within it cannot be used in court or any other legal action.
The mediator is strictly neutral and cannot offer legal advice or opinions even where one party is legally represented and the other is not. The mediator can however advise on process and is there to assist the parties to reach an agreement to settle their dispute and the mediator does not give a decision at the end of the process.
The parties will often start the day by meeting in the presence of the mediator to state and explain their opening positions and then move to separate rooms to discuss and consider their positions in the light of what each party has said. The mediator will often then shuttle between the separate rooms to put points that each party has authorised to the other party to explore what might be acceptable. Any offers will need to be put into writing by the party making them and the mediator will take the piece of paper containing the offer (often just an amount) to the other room and discuss with that party.
Sometimes an agreement will be reached after several offers and counter-offers have been made in this way. If an agreement has been reached it is not necessary for the parties to meet again in a plenary session as long as they both sign the settlement agreement but it is often the case that with the relief of having reached a settlement they wish to meet again to express their satisfaction and to leave on good terms.
Does the mediator have to be an expert in the subject of the dispute?
Strictly speaking, no. The mediator is there to help the parties reach a settlement and focusses on that process and so does not need to be an expert in the subject matter of the dispute. Having said that, familiarity with the details of the matter in dispute can obviously assist when discussing the matter with the parties and avoid the need for technical explanations to be given to the mediator by the parties where relevant. Familiarity with any related process is however important. For example in family, employment or tax disputes a good knowledge of the legal processes before the relevant tribunals and courts is vital to ensure that the discussions by the parties are realistic and rooted in what is possible under the relevant regulations and that any settlement reached is legally valid. A practical example of this relates to HMRC who in tax disputes can agree to settle the tax treatment of transactions in past years but cannot legally agree or bind themselves as to future tax years.
I am involved in legal dispute – can I discuss the benefits of mediation?
I am a CMC accredited mediator and am happy to have a no-obligation chat to discuss whether a dispute is suitable for mediation and what the benefits might be so please contact me if this would be helpful.
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For professional and insurance reasons Patrick is unable to offer any advice until he has been formally instructed.