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An alternative to high cost legal disputes. Recently, the ICAEW/ADR Group launched a joint mediation initiative, aiming they say to provide a unique service for resolving high value commercial disputes without the necessity for prolonged and expensive litigation. The scheme is primarily aimed at attracting FTSE 250-Level companies and they have recruited a panel of highly trained mediators from both the legal and accountancy worlds, including Cherie Booth QC and Lord Woolf.
Alternative Dispute Resolution (ADR) has become increasingly important over the last decade as a means of resolving both commercial and private disputes. The construction industry has for a long time been using Arbitration to deal with contentious issues, and with high legal costs being unattractive for all but the most wealthy, the possibility of moving to effective ADR at an early stage has significant benefits for almost everyone.
ADR can encompass straightforward negotiations, round table meetings or a more structured approach through Mediation. Mediation has evolved to be an effective method of curtailing litigation and promoting voluntary settlement of disputes. Indeed, any party involved in or contemplating litigation is required by the Civil Procedure Rules to give serious consideration to mediation. A party refusing to consider mediation without reasonable excuse may face adverse costs consequences at a later stage.
What is Mediation?
Mediation is a formal process of negotiation whereby an independent trained Mediator is jointly appointed by the parties to facilitate settlement. Unlike a Judge in Court, the Mediator will not make any decisions but will rather coax the parties towards achieving a resolution which both can live with. The process is voluntary and non-binding until terms of settlement are recorded between the parties in writing.
The actual structure of the mediation is for the Mediator to decide upon, but generally there will be an initial plenary session attended by all parties and their representatives [if any]. Before the mediation starts the parties will be required to exchange Position Statements detailing their approach to the dispute and may also provide a confidential briefing for the Mediator.
After the plenary session the Mediator will then shuttle between the parties, speaking with them in private, attempting to move them forward and to abandon hopeless points.
Discussions are confidential and are conducted on a without prejudice basis so that if mediation fails, the parties are not restrained in any way by the mediation negotiations. During the process the Mediator will only disclose information to a party with the express consent of the other.
The key component for a successful mediation is the willingness of the parties to compromise where appropriate and it is essential for all parties to adopt that positive approach.
Mediation has a high success rate, and even where overall it fails, frequently specific issues can be resolved thereby reducing subsequent costs and time in litigation.
Unless the parties are entrenched in heavy evidential conflicts or the case is so novel that a decision from the Court is required, any type of dispute can be mediated.
Benefits
➢ Potential for significant savings of legal costs and management/employee time.
➢ Quicker resolution of problems--mediations can be set up very easily
➢ The parties are in control of the process and the timetabling.
➢ Ongoing business relationships can be maintained if required.
➢ Solutions can be found that would not be available within the Court framework.
As the process is controlled entirely by the parties, they are not bound by strict legal concepts and can therefore tailor settlement entirely to their own needs and requirements.
Disadvantages
➢ As it is non-binding, parties can walk away from the process at any time.
➢ Inevitably, if the parties approach the process in the right spirit, any weaknesses in their respective cases will be highlighted which may assist an opponent later if the mediation fails.
On balance the benefits of mediation far outweigh the disadvantages and it is here to stay. It is strongly supported by the judiciary as a means of avoiding litigation and lawyers acting for clients in conflict situations must consider the option in most cases.
In addition to the scheme recently launched by the ICAEW/ADR Group there are numerous other providers in the market catering for all types of disputes and clients, ranging from the heavyweight commercial to neighbours at war.
Susan Sullivan is a Partner in the Dispute Resolution Team at Thomson Snell & Passmore and an accredited Commercial Mediator (
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