Mediation

What is Alternative Dispute Resolution?

To understand why mediation is not simply an “alternative” to a “Battle” in Court you have to understand the process and dynamic of adversarial litigation. The Court does not resolve a dispute, it determines a legal claim based on the admissible evidence. There is no dispute resolution by the Parties there is a battle of attrition.

Consider the typical process in a commercial dispute. Usually the parties will have an existing commercial relationship with each other. It may be a Manufacturer and its Distributor or a Contractor and its Sub-contractor or Principal and Agent or Professional Partnership. After a period of time during which the relationship has worked to the mutual benefit of each party, they find themselves in conflict over a particular issue. They usually also find that the issue is not covered by the original agreement or that they each have very different interpretation of the facts or the governing Contract. As each party begins to experience the negative impact of the dispute the conflict escalates and becomes entrenched. Typically one party will then adopt “default thinking” and consult a Solicitor. This produces a Solicitor’s Letter to the other party who then reciprocates the “default thinking” retaining a solicitor of his/her own. Once this happens, the parties become exclusively focused on a determination of the issue within the legal framework. The legal framework is by its nature very limited and cannot accommodate nor evaluate those factors which may be commercially the most important to a business or an individual.   The conflict is now conceptualised within the legal framework in terms of Right –v- Wrong and Liable –v- Not Liable all of which falls to be determined upon criteria over which neither party has any choice and produce a remedy which is has a very limited commercial value to either party, whoever “wins”.

 

Civil litigation is, by and large, limited to the provision of   2 primary remedies:

(a)       An award of Monetary Compensation based on purely financial loss; and

(b)       Injunctive relief, i.e. an Order compelling one party to do or not to do specified acts.

 

Whilst a Court decision may be said to be “fact specific”, the legal framework per se is one which requires the Court to adopt a “one size fits all” type of solution which may or may not fit the parties’ individual or commercial interests.

Now that one Party has “lawyer-ed up” it is almost inevitable that the other Party will feel compelled (again, by default thinking) to lawyer-up too. Not only are the Parties now in conflict but their respective lawyers are now competing with each other in pursuit of their client’s interests.   One way of looking at what follows is to view it as a classic “tug-of-war”. The “issue” becomes the rope and as each party struggles to resist the pull of the opponent, more expert warriors are recruited by each Side to help pull harder. Each party adds a solicitor, then Junior Counsel, then Senior Counsel, then one or more experts. In the result, more and more time is expended and more and more costs are incurred in a purely Oppositional Battle

It is easy to see that all the effort and energy and ultimate expense is directed solely at resisting the unidirectional pull from the other side. The greater the cumulative pull by one team, the even greater effort that is required to resist it by the other team. Litigation is by its nature oppositional and can consume large sums of money simply to sustain the “battle”. The process becomes intensely competitive, sometimes to the point where the parties become competitively enmeshed and feel driven to “win at any Cost”. Parties to formal litigation are inevitably drawn into the battle and required to reduce their focus on their day-to-day business and personal life and to redirect their focus and resources   into the litigation. The criteria upon which the issues will be determined in the Courtroom take little or no account of the pre-existing commercial relationship between the parties. The almost inevitable outcome of the Court battle is that the pre-litigation mutually beneficial commercial relationship will be destroyed.   Opportunities to “create value” by exploiting the resources that each party has available to them will be lost. Commercial disputes in the High Court can become entrenched with an average disposal wait of 36 weeks in 2014.

 

Mediation is a process in which an Expert Neutral will facilitate the parties working together to explore the opportunities to resolve the dispute. Mediation allows the individuals involved in the dispute the opportunity to work together towards resolving their own differences. Trained mediators work closely with the disputing parties by listening to all sides of the dispute, identifying areas of concern and most importantly exploring the underlying interests and possible solutions. The mediation process gives the parties the opportunity to tell their story and to hear the other person while focusing on moving forward. Mediators remain neutral throughout the process and unlike a Judge or arbitrator, the mediators do not decide the outcome. The outcome is determined by the parties themselves.

 

The key features of mediation:

  • The process is entirely voluntary; a party can chose to remain in or withdraw from the process at any time.
  • What is said or not said during the mediation process is completely private and confidential.   Strict confidentiality is provided for in the legally binding and enforceable agreement to mediate. The mediation agreement can expressly provide that all communications are strictly “without prejudice” and cannot therefore be admitted in evidence in any future Court proceedings.
  • The parties can together chose the time, date and place of the mediation to accommodate their respective timetables and ensure privacy.
  • Mediation is non-judgemental. The focus is not on the Rights or Wrongs of the past, but on future positives. Parties usually have a better understanding of each other even if they do not reach a mediated agreement by improving communication, hearing the other person’s point of view and thinking about their future relationship. The Parties combined energy is focused on working toward a common purpose rather than opposing each other every step of the way .
  • Mediation is empowering. The parties’ craft and control the outcome.
  • Mediation models agreement which will form a template for the resolution any future disputes. Parties are more likely to follow the requirements of a mediated agreement because they have crafted it themselves.
  • The parties control the process and can together, dictate the timetable for mediation and the speed of progress. Mediation can therefore happen much more quickly than waiting for a Court date.

 

Whilst the parties will usually wish to adopt some basic ground rules for the conduct of the mediation, the process is much more flexible and informal ,therefore is far less intimidating than Court proceedings. The parties can work together rather than compete against each other.

 

Mediation Models

 

There are 2 basic models for Mediation:

 

The Caucus Model.

Most lawyer-lead mediations in the UK and Ireland adopt the Caucus Model. Typically this involves the parties retaining a lawyer-mediator with experience in the subject matter of the dispute. The parties will have an initial, short joint session in which each party will be afforded an opportunity to present their “case” and thereafter the parties will retreat into separate rooms with the mediator engaging in Shuttle Diplomacy /negotiation between each of the two rooms in an attempt to persuade the parties to agree to a compromise settlement. Such a process has much in common with the traditional Positional Haggling that occurs at the Door of the Court. The key distinction is that one person is communicating directly with both parties and adopting a neutral view. Caucus mediation usually occurs prior to a formal Court hearing and can achieve early settlement with a commensurate saving in costs. The principal risks with this model of mediation are that the mediator may feel that it is his or her function to obtain a settlement and that neither party gets to hear what view is being expressed by the mediator to the other party. Therefore, there can be no guarantee that the same view is being expressed to both parties. This raises the spectre of conscious or unconscious manipulation of the Parties by the Mediator . The focus within this Model is more on “settling” the Legal Case before the Hearing Date and less on the underlying personal and commercial Interests of the parties and creating Options to distribute Value .  There is a real risk that opportunities to Create Value i.e. “Increase the Size of the Pie” are ignored with the result that “Money is Left on the Table “.

 

The Model of Understanding.

Harvard Law School, has run a formal Mediation Program since 1981. The Model of Understanding for mediation was developed by the Harvard Negotiation Institute, in part, to address the ethical concerns about the Caucus Model. There is a very strong preference by those who teach at Harvard Law School for the Model of Understanding. The common thread to the teaching of negotiation and mediation at Harvard Law School is the priority afforded to value creation by exploiting the interests and resources of each of the parties or to put it in the vernacular there is a strong desire to “increase the size of the pie”.   In formal Court proceedings, the focus of the enquiry is on rights and wrongs and any remedy is limited to that provided by the legal framework. This Model of Mediation provides a process in which the parties are not only free to “have their say” and be heard but can most importantly explore their underlying commercial or personal interests and look creatively at a range of options limited only by their respective imaginations. Thus, the parties can fashion a bespoke remedy far beyond limited and limiting binary remedies available in Court.

In practical terms the Model of Understanding strongly encourages the Parties to remain in Joint/Plenary Session, for most if not all, of the process. It`s all too easy to Demonize someone you never have to talk to or engage with . By contrast , sharing a common space and engaging with mutual respect can allow the person previously viewed as a Demon to be viewed in a more humane and balanced light.

It has been my experience when conducting mediations using this Model that when the parties gain an understanding of their respective underlying interests and explore all possible options for resolution, the terms of a resolution become clear to the mediator and the parties with the result that a consensus can quickly be translated into a legally binding agreement.

Whilst I am open to using the Caucus Model, my strong preference is to start with the Model of Understanding which includes an overwhelming preference for the mediation to take place in joint session, i.e. with the parties and the mediator in the one room albeit the Parties may at times decide that the Mediator goes into Private Session with each Party where there are compelling reasons to have separate discussions on discreet and sensitive issues.

 

The 3 key advantages of this Model are:

  • By working together in the same room, the parties themselves own the dispute and are therefore compelled to take responsibility for its resolution. The Caucus Model allows the parties to avoid responsibility for resolution and to attempt to impose a “duty” of resolution on the mediator. By working together , communicating openly the parties begin to model behaviours which will assist in resolving any future disputes.
  • The focus is not on Rights or Wrongs of the past but on underlying personal and commercial interests and creating options for resolution which serve those interests both now and going forward . The Model of Understanding is the best model for capturing all the Value ; “No money is left on the Table”
  • The Harvard Model of Understanding is ethically more robust than the Caucus Model. The Disputants have greater protection against cynical manipulation by the Mediator.

Get in touch

If you would like to discuss Mediation as an Alternative to Court Proceedings, please telephone me on 07921 57 6336 to arrange an early Consultation.