Q1. What is Mediation?
Mediation is a process whereby the parties to a dispute attempt to reach a resolution by agreement with the aid of a third party (the Mediator).
Q2. Who can act as a Mediator?
The parties may choose anyone they wish to act as a Mediator. There is no requirement for the Mediator to have any particular qualifications. In practice parties would normally seek to appoint a Mediator with a good reputation and experience of having conducted mediations previously. Often, but not always, the mediator is a lawyer. Howard Colman of our firm is a trained mediator.
There are several well respected organisations that maintain panels of experienced Mediators and are able to recommend possible Mediators to the parties if asked to do so.
Experienced litigators will have come across many Mediators in practice and so will usually be in a position to recommend Mediators who they have seen operate successfully in the past.
Q3. Does a Mediator need experience in the subject matter of the dispute and/or legal experience?
Whilst often parties will select a Mediator who has experience in the subject matter of the dispute (for example a surveyor in a property dispute) or alternatively a lawyer where there are legal issues involved, this is not essential and indeed some people consider it would be better to have a Mediator without any such knowledge given that his or her role is not to decide who is right or wrong but to facilitate an agreement.
Q4. Is a party obliged to participate in a Mediation?
In general there is no obligation on a party to participate in mediation. However many businesses have obligations to do so particularly in disputes with consumers either under their contractual terms or under the terms of their particular trade regulators or bodies.
The English Courts have, at least until recently, taken the view that, whilst they can and should encourage the parties to mediate they cannot force them to do so. They have made it clear in a number of cases that if a party unreasonably refuses to mediate they may suffer costs consequences even if they are successful in their case.
However, this is about the change. The government recently (July 2023) announced plans for compulsory referral to mediate for all small claims (generally those under £10,000) and also indicated this will be extended in the near future to those valued up to £25,000. It has also given an indication that there is likely to be a further extension to claims of higher value in the reasonably near future.
Q5. What role does the Court play in Mediation?
In England and Wales the Court usually does not play any direct role in mediation. Whilst the Court will encourage (and sometimes insist upon) parties attempting mediation, if they choose to do so the mediation will be selected by the parties, not the Court and the process will be conducted privately without the involvement of the Court. However, once the new rules for compulsory mediation come into force they may change, particularly for small claims.
Q6. How does Voluntary Mediation work in practice?
As mediation is a consensual process there are no fixed rules and the parties are free to agree any procedure they wish. In practice however, most mediations follow a fairly similar route.
The parties select a Mediator and then he or she contacts each party in advance of the mediation to formally agree the terms of the mediation and to establish at least some of the facts about the dispute.
Usually each party will then prepare a document (a Position Statement) setting out it’s view of the dispute and what it wishes to achieve. Position Statements are given to the Mediator and exchanged with the other parties prior to the mediation taking place.
The parties then convene at an agreed venue, with the Mediator, to attempt to resolve the dispute. Whilst the majority of mediations are conducted in person, some mediations are conducted remotely by video conference. This can be helpful, particularly in an international setting, to avoid the inconvenience and costs of travel to a venue. Whilst there are many examples of successful remote mediations, our own experience is that, “in-person” mediations work better and we prefer them wherever this is possible.
At a mediation, it is common (but not mandatory) that there is an open session with all parties and the Mediator. At this session, each side gets an opportunity both to meet the other party (which in some cases may be the first time this has occurred) and to give a presentation of their case. Depending upon the nature of the dispute this can be a very useful process. It does give the parties an opportunity to express their feelings and concerns and can often act as a good substitute for the “day in Court”. In other cases this may not be necessary and either the opening statements can be dispensed with altogether or can be very short.
After the opening meeting, it is usual for the parties to go off to separate rooms and for the Mediator to meet with each of them separately to hear their case and to try to establish what they are really hoping to achieve from the mediation. If the mediation is conducted remotely, the mediator will have set up private “rooms” for each party.
Thereafter the Mediator moves from each party to the other conveying messages, testing the reality of the position adopted by each party and seeking to encourage offers of settlement.
Sometimes, during the course of the mediation, the Mediator will ask the parties or some members of their team to meet to discuss particular issues with the opponent.
The Mediator’s role is to try to help the parties find a solution which meets all of their needs and upon which they can agree.
If an agreement can be reached then this is embodied into a written Settlement Agreement which is signed by the parties.
It is only then that the dispute is concluded.
Q7. Can the Mediator decide the dispute?
The Mediator’s role is not that of a Judge or other dispute resolver. He or she is simply there to facilitate an agreement not to provide any rulings or decisions.
In some cases, where the parties have been unable to reach agreement, the Mediator may offer to give his or her view either on the likely outcome of some of the issues or the dispute as a whole or as to what might be a reasonable settlement for the parties to consider. The Mediator should only do this with the consent of all the parties and even then the Mediator’s view carries no formal weight (unless unusually the parties agree to be bound by them).
Q8. Enforcing a Mediation Settlement?
Within England and Wales, if a Settlement Agreement is reached, it will usually become part of an agreed Court Order which the Court can then make and this can be enforced accordingly. If there are no proceedings involved then the Settlement Agreement will be a Contract which can be sued upon in the usual way.
In the International context, the UK government became signatories to the Singapore Convention on Mediation in May 2023. At that time some 56 countries were signatories and the number is expected to grow.
The Convention aims to support mediation and make cross-border enforcement of mediated settlements much easier.
Q9. Is the process confidential?
Yes while the parties may inform the Court that a mediation has or has not taken place they are not allowed to reveal the detail of anything said or done during the mediation and everything that takes place is covered by confidentiality and privilege.
Additionally, when the Mediator meets with the parties individually, anything a party tells the Mediator is entirely confidential and the Mediator may not reveal this to any other party without prior agreement.
This allows parties to be frank in their private discussions with the Mediator and to reveal their true aims and any concerns to the Mediator. This is an essential part of the process as understanding each party’s objectives and concerns enables a skilled Mediator to assist the parties in finding common ground for a settlement.
It is unclear at this stage, whether there will be any change in the position particularly in respect of compulsory mediation, for example, permitting the mediator to inform the Court if a party fails to participate or does not do so in good faith.
Q10. What are the benefits of Mediation?
Mediation has numerous benefits. Firstly, if the parties are unable to resolve their dispute the costs both financially and in their own time in dealing with contested litigation is likely to be substantial. This is particularly the case as in England and Wales it is usual for the losing party to have to pay most of the successful party’s costs as well as its own. Further, even when a party has, what seems to be a strong case, there are always risks in litigation and it is very rare that the outcome can be guaranteed in advance.
Also, mediation allows parties to resolve their dispute consensually. This makes it more likely that they will be able to work together in the future if they wish to do so.
Mediation also allows for a much wider range of results that the win or lose which is generally the outcome of a trial. For example a party might agree to accept a lesser sum than it believes it is entitled to for work done in exchange for being offered a future contract.
Q11. What is the cost of Mediation?
This varies depending upon the number of parties, the identity of the Mediator and how long a mediation takes.
As a rough guide, for a standard mediation in a commercial dispute between two parties lasting one day, it would be reasonable to budget for costs of around £3,000 per side for the Mediator and the room hire. Additionally, each party will have costs of their legal team and other professionals for preparing for and attending a mediation.
Q12. Who should attend a Mediation?
It is essential that each side has a representative present who has full authority to enter into a binding settlement on the day.
Additionally each party would usually be accompanied by it’s Solicitor. Depending on the nature of the dispute, other professionals may also be of assistance (for example in a dispute over a final account on a building project it may be helpful to have the Quantity Surveyors present).
Generally, although not always, in our experience the less persons who are present for each party the easier it is to progress to a resolution.
Q13. When should Mediation take place?
This is a difficult question. Theoretically the earlier the parties mediate the better as this will save most time and money that would otherwise be spent on the dispute and in many cases the costs that are being incurred often create the biggest obstacle to resolution.
On the other hand, if the parties attempt mediation too early, settlement may be difficult particularly if the parties by that stage do not fully understand the other side’s case and/or have not seen the documents or evidence to back it up.
In addition, often at the early stage in a dispute, parties are not in the right frame of mind to reach a settlement. Rightly or wrongly, a party may be angry about the conduct of the other party, or just convinced that it is right and it may need time for tempers to cool and time to pass before there is a real prospect of a settlement.
We have seen successful mediations take place at a very early stage, even before proceedings have been drafted. Equally we have settled cases at mediation at a very late stage, some times as late as only a few days before the Trial.
On balance we would advise that mediation probably works best if it takes place reasonably early in the dispute but after each side has had time to understand and consider both its own case and that of the other side.
At Colman Coyle we have participated in a very large number of mediations varying from small disputes for private individuals to large mediations involving multiple parties and multiple Mediators where hundreds of millions of pounds are at stake.
Whilst not every mediation we have been involved in has been successful, the vast majority have resulted in either an immediate settlement or have contributed to a settlement taking place a little later in the proceedings.
In our experience, there are very few, if any, disputes that cannot be resolved through mediation and we would always recommend that parties give serious consideration to mediation as a means of resolving disputes.