What is mediation?

Introduction

The concept of introducing a ‘third party neutral’ to intercede in hostile and antagonistic bi-lateral relationships is not new. Yet unfamiliarity and scepticism in relation to alternative dispute resolution processes are still widespread.

ADR, as an alternative to litigation, has grown out of an ever-increasing dissatisfaction with the legal process. Litigation is almost universally regarded as slow, cumbersome, costly and inadequate. Statistics show that between 60% and 75% of successful litigants in personal injury claims remained dissatisfied with the outcome: (see Law Commission Survey 1994). Litigants often feel that:

  • the award is too little
  • the judgment comes too late bearing in mind the time taken to reach court
  • the process was too costly
  • the whole process was too time-consuming
  • the litigation resulted in the end of a previously productive commercial relationship

Mediation can be used by the rich and by the poor. It can be used in multi-million pound international commercial disputes as readily as it can be invoked in ‘minor’ neighbour disputes. It is swift, relatively cheap, and has a reported success rate of up to 85%.

How Mediation Works In The Legal Environment

Many - including lawyers - still believe mediation is a form of arbitration. Those members of the general public who have heard of the word think mediation is little more than a sophisticated mode of negotiation. Many believe that the mediator will in some way judge the issues between those in dispute. Others perceive it simply as an exercise in ‘compromise reaching’. But it is really none of these.

Mediation is a form of Alternative Dispute Resolution (ADR) whereby a ‘third party neutral’ intervenes to facilitate and assist the disputing parties in reaching a mutually acceptable settlement. The mediator is neither a judge nor an arbitrator; he or she is not an adjudicator, nor someone who imposes a resolution or a settlement upon the parties. Instead, the mediator acts simply as a ‘midwife, assisting in the labour and birth of a settlement’. The mediator will help by seeking to identify common aims and objectives, by re-opening lines of communication, and by developing mutually acceptable proposals for settlement. In this way, the mediator can gently move the parties away from a preoccupation with their rights and liabilities, and nudge them towards an exploration of their needs and interests the transition from a position of conflict to a position where they can form a ‘working alliance’.

Mediation has three fundamental and distinctive elements:

It is consensual
The parties decide whether an agreement can be reached, and they control the nature and the terms of it. As the mediator does not impose any resolution or settlement or terms of an agreement upon the parties, there is not the inevitable ‘win/lose’ situation that accompanies litigation or arbitration. The parties have absolute control of the outcome. The parties are in this way removed from the ‘coercive’ atmosphere of litigation whether in the courts or in arbitration or adjudication. They are entitled to withdraw from the mediation process at any time, and are not bound by anything said or agreed until such time as they sign a settlement agreement. However, once the agreement is signed, the settlement becomes as legally binding and enforceable as if it were the subject of a contract or a court order.

It is private and confidential
The mediation is held not in public but in private, and one of the cornerstones of the process is that it is confidential and without prejudice. Anything disclosed during the mediation is disclosed ‘without prejudice’ and cannot be used outside or in later proceedings should the parties fail to reach agreement. Moreover, any information shared by one party with the mediator will be treated in confidence and the mediator should not pass it on to the other party without specific permission to do so.

It focuses not on ‘rights and liabilities’, but on ‘needs and interests’
The reason for the failure of many lengthy and protracted negotiations is that the parties all too readily fall into and get ‘bogged down’ in entrenched positions, and are unable to overcome the impasse that results. These entrenched positions derive from a rights culture a preoccupation with rights and liabilities, entitlements and obligations. Unlike litigation, which determines ‘what happened in the past, why it happened, and whose fault it was’, mediation looks to the future and encourages parties to re-evaluate their aims and objectives in the dispute by re-examining their current and their future needs and interests.

Advantages of mediation

Mediation has the following advantages:

  • Speedy
  • A mediation can be set up in a matter of weeks, if not days. It thereby avoids the many undesirable consequences of protracted litigation - drain on costs and resources, damage to health, the destruction of businesses, termination of business relationships, and even marriages.

  • Low cost
  • The cost of mediation can start at just over £100 per party. It usually takes a matter of hours to complete and very rarely lasts more than one or two days, with very limited preparation involved - so costs can be kept to a minimum.

  • Parties retain control over the outcome
  • In litigation, parties relinquish control of their dispute: the Court controls the procedure, the level of disclosure, the evidence to be given, and the Judge has exclusive control of the outcome. In mediation the parties retain full control of the entirety of their dispute, allowing them to reject settlements with which they do not agree, and enabling them to reach more creative settlements or just ‘good enough’ settlements with which each party can readily live.

  • Therapeutic
  • It allows the parties their day in court more effectively than by going to court itself by allowing each person in dispute to be truly ‘heard’ to have their full and frank say to the mediator as well as to the other side in a ‘safe’ environment. It also facilitates apologies to be given or explanations made - which is often what parties really want.

  • Preserves relationships
  • Parties who end up in court, with a winner and a loser, will rarely be able to continue any commercial, trade or other relationship; whereas mediation allows parties to reach settlements with which they are both content, thereby enabling them to continue with pre-existing business relationships.

  • Preserves privacy
  • Litigation often attracts unwanted publicity, with parties obliged to ‘wash their dirty linen in public’. Mediation is totally confidential with each party retaining complete control over whether and what matters can be revealed. Confidentiality clauses are also frequently included in settlement agreements.

  • Diminishes imbalances of power
  • Parties often feel overwhelmed when fighting large corporations - at mediation they are simply individuals around the table, and an effective mediator can protect parties against power imbalances.

When to mediate

As soon as parties in dispute are in a position to talk about a resolution of their dispute or to attempt to negotiate, they are ready to mediate. There are very few disputes that are not amenable to mediation. Some conflicts may be inappropriate to mediate as for example:

  • Where a definitive ruling on a matter of law is required
  • Where the visibility of litigation is important as a deterrent (as for example, to protect a trademark or copyright
  • Where injunctive relief is needed
  • Where some benefit can be derived by delay
  • Where there is no genuine desire to settle

Mediation can take place even before lawyers are involved, or before proceedings are issued. Paul Randolph is ‘licensed’ under the Public Access scheme, and is authorised to take instructions and cases directly from members of the public. If on the other hand proceedings have been issued and litigation is underway, the court will stay the proceedings to enable parties to attempt ADR.

There may be situations where mediation is appropriate, but it may not be the appropriate time, as for example, if there is a lack of information, perhaps in relation to:-

  • Medical reports
  • Technical reports
  • Safety records
  • Design histories

So you can mediate if you or your client have:

  • a straightforward case - you simply need assistance in opening up lines of communication with the other side so as to help resolve the dispute quickly.
  • a complex case - which would benefit from issues being resolved, if not the entirety of the dispute.
  • a strong case - and you need a good mediator to ‘knock some sense’ into the other side.
  • a weak case - and you need a good mediator to ‘broker a deal’ so as to extract the maximum benefit from the situation.

Risks of failing to mediate

Both the Government and the Courts have been determined to promote Mediation as a prime form of dispute resolution.

The Civil Procedure Rules, the Commercial Court Guide, the Queen’s Bench and Chancery Division Guides, and the various Pre-Action Protocols have all sought to encourage parties and prospective litigants to consider ADR as early as possible in their disputes.

The Courts, however, have increasingly adopted the ‘stick’ rather than the ‘carrot’. In 2002, Lord Justice Brooke created a significant precedent when the Court of Appeal disallowed Railtrack PLC their costs notwithstanding that they had been successful on appeal: Dunnett v Railtrack PLC [2002] 2 All ER 850, CA.

More recently, In Halsey v Milton Keynes General NHS Trust[2004] 1 WLR 3002, the Court of Appeal stated:

"All members of the legal profession who conduct litigation should now routinely consider with their clients whether their disputes are suitable for ADR. The Court of Appeal indicated that the courts would be robust in their encouragement, and parties will now face significant adverse costs consequences if they unreasonably refuse to consider mediation."

Costs implications

Fees are very flexible but see the fees page for some guidance as to fees.
See also risks of failing to mediate for the possible costs implications of failing to participate in a mediation proposal.

Is Legal Aid Available For Mediation?

Mediators are entitled to have their reasonable fees paid for as a disbursement under Legal Help funding.

The following is an extract from the Legal Services Funding Code Manual Funding Code Guidance R11:December 2003 ADR 84:-

7.7 Supporting Non-Family Mediation
The Commission supports the wider use of mediation to resolve disputes.
Non-family mediation may be funded as a disbursement under Legal Help, Legal Representation or Support Funding.
No prior authority is necessary to mediate a non-family dispute but, like all other fees, the cost of mediating must be reasonable in all the circumstances.
Therefore mediation should only be funded where it appears to be the most cost-effective way of proceeding and where the fees of the mediator are reasonable in all the circumstances. The Commission will give further guidance as to remuneration for mediators in due course but, as a general starting point, non-family mediators will need to justify any rates in excess of prescribed basic remuneration rates for lawyers providing county court advocacy under certificates for Legal Representation.
It is also important that only properly trained mediators are funded under the CLS. There are at present no national agreed quality standards for non-family mediation, although a new standard within the Quality Mark is due to be introduced for Community Mediators during 2001. Pending further developments, mediators trained or accredited by any of the following bodies will for the time being be regarded as suitably qualified and capable of being funded under certificates:
(a) CEDR (Centre for Dispute Resolution);
(b) ADR Group;
(c) Mediation UK;
(d) The Academy of Experts;
(e) The School of Psychotherapy and Counselling Regent’s College (SPC)
Mediators trained by other bodies may still qualify for funding but will need to satisfy the Commission that they have appropriate training and expertise.

For a full copy of the Legal Services Funding Code Manual, see: http://www.legalservices.gov.uk/docs/stat_and_guidance/funding_code_guidance_r11.pdf

What happens at a mediation

The following is an outline of the format of a typical UK model of ‘legal’ mediation, generally accepted throughout this country in non-family mediation. Variations of this format are used in family mediation and also adopted in some European countries.

Venue and format

There are no prescribed rules as to where a mediation should take place. It will generally be conducted at one or other of the parties’ lawyers’ offices, or at the premises of the mediator provider. Court-annexed mediations usually take place on court premises after court hours.

Mediators may use an assistant or co-Mediator, particularly in more complex mediations. These co-mediators can be selected in the same way as the lead mediator, and may be entitled to a fee, or they may simply be brought in independently by the lead mediator, with or without a fee.  The precise role of the co-mediator in the mediation will depend upon the lead mediator’s preferences and his or her style of mediation, as well as the co-mediator’s level of experience. Some will favour a joint approach, treating the co-mediator as part of the ‘mediation team’. Others will prefer to use the second mediator as an assistant: to take notes if appropriate, or to write on the flip chart or board if available, us, and in between the caucus sessions, to discuss and brainstorm issues which have arisen.

The mediator’s opening

The mediation usually commences with all parties together in one room, invariably around a table. The mediator will make an opening statement in which he or she will outline to all present the aims of the process and the mediator’s role in it.  It remains surprising how many parties attending mediations, whether experienced lawyers or simply members of the public, are not aware of how mediation works.  So it will be necessary for the mediator to state the purpose of the process and the procedure to be adopted. The mediator will outline and emphasise that his or her function is that of a neutral facilitator and not an adjudicator or arbitrator.   He or she will outline what is to happen, detailing the way in which joint sessions and private ‘caucus’ sessions will be used.

The parties’ opening statements

Each party, and/or their legal advisor, makes a short opening statement, without interruption, setting out the main points of their case. This is a vital element of the mediation and its effect should not be underestimated. It can set the tone for the entire proceedings that follow. Where the dispute has hitherto been conducted by correspondence, it may well be the first time that the parties meet face-to-face; it will probably be the first time that one party has an opportunity to hear the other side’s story first hand, rather than sifted, repeated, and interpreted by a number of intermediaries. It will invariably be the first time, for example, that one party’s insurer or other decision-maker comes face to face with the other party. And sometimes it is the first opportunity to see the other side’s lawyers ‘in action’; this can often be a salutary experience, as each party will undoubtedly have had a mental image of the other side’s lawyers, and perhaps to see that they are ‘human’, and doing just as good a job if not better than their own lawyers, can occasionally help to move the dispute forward. For these reasons, the opening statements can be a most therapeutic constituent of the process, and consequently the parties should use it to good advantage.

Too frequently, lawyers are asked to furnish their party’s opening address and use the occasion simply to regurgitate, ostensibly for the mediator’s benefit, a series of legal submissions. This merely demonstrates a basic misunderstanding of the role and function of the mediator, mistaking him or her for an arbitrator, and only serves to irritate the other side. Rather, the parties should be encouraged to give their statements themselves, setting out a more personal perspective of the dispute, augmented if necessary by their lawyers. This is their "day in court" and it is their chance to be truly heard and to convey the extent and depth of their feelings - to "tell it from the heart".

Private caucus sessions

At the conclusion of the opening statements, the parties will generally (in the UK model of mediation) separate for the separate "caucus" sessions into their respective rooms. This simply means the private individual session where the mediator sees each party privately and in confidence on their own. If there is a room allocated for the mediation itself, the mediator may invite each party to come to that room for the private caucus sessions. More usually, however, the mediator will visit the parties in their respective rooms. The format of the foregoing will obviously depend upon the venue, the number of parties, whether the mediator is acting alone or with a co-mediator, and the facilities available in each room.

Joint sessions

The separate caucus sessions will normally continue until such time as the mediator feels it appropriate to bring the parties back together. The question as to whether, and if so when, the mediator should bring the parties back together for a joint session is largely a matter of judgment, either for the mediator alone, or with the input of the other parties. It can also be a matter of style: those who adopt the model of mediation in which caucuses are rarely used, will prefer to conduct as much of the mediation in joint session as possible.

Joint sessions can effectively be used when the parties have reached a sufficient accord in principle, so as to justify bringing them together to finalise and shape the more detailed points of the settlement. Whether the parties have in fact reached such a stage may in itself be a matter of delicate judgment.

Settlement agreement

Once a true settlement is reached, the step that transforms the mediation from a voluntary non-binding process to a fully binding accord is the signing of a settlement agreement. The parties will need to create a document which they can each sign to signify their acceptance to being bound. A "Heads of Agreement" document will usually be drafted immediately, either by the parties themselves or by the lawyers if they are present, or by the mediator.

The only matter then remaining is who buys the champagne!

Preparing for mediation

Pre-mediation agreement

The mediator appointed by the parties for the mediation will be in a position to contact each party prior to the mediation itself, and discuss any issues the parties wish to raise in preparation for the mediation. This will usually include:

  • Where the mediation is to take place
  • How long it is likely to last
  • Who will attend on behalf of each party
  • What documentation will be required by the mediator or by the parties

The venue

Care should be taken in the selection of a venue. Ideally it should be in ‘neutral territory’ so that neither party is likely to feel uncomfortable. Sometimes, however, such a venue is not feasible and the parties and the mediator may have to make do with what is available. Paul Randolph is very flexible about the choice of venue.

Ideally, there should be one room for each of the parties, large enough to comfortably hold the entire ‘team’ which each party wishes to bring. The parties may spend considerable periods of time in these rooms, so they need to be comfortable and have sufficient facilities available. The mediator will often use these rooms for the confidential private ‘caucus’ sessions, so the rooms need to be sufficiently distanced from one another so as to avoid fear of being overheard.

The venue needs to be available throughout the period envisage for the mediation. There is nothing more frustrating than parties almost reaching agreement at the end of a long day, and for the security guard to come in and ask everyone to leave as the building has to be closed!

The time

The commencement and the duration of the mediation is usually catered for and set out in the pre-mediation agreement. It is important for both parties to be clear as to the duration of the mediation - it is similarly frustrating for the parties to be deep in negotiation and for one side suddenly to declare that they are obliged to leave (whether to catch a train, or a plane, or simply to fetch the children from school!).

The attendees

It is important that neither side should be surprised at the mediation by the attendance of any particular person or party. The mediator will discuss who is to attend on behalf of each party, and this will enable him or her to deal as far as possible with any imbalance or perceived imbalances of representation. Thus if one side wishes to attend in person, whereas the other proposes to bring solicitor, counsel, experts, and witnesses, etc etc. the mediator can speak to both sides to explain and reassure where necessary.

The documentation

Mediators do not require box-loads of lever arch files in preparation - even for the most complex of mediations. The parties and their legal advisers should ensure that the mediator is sent:-

  • A brief case summary
  • This should not be in the form of a ‘legal Statement of Case’: it is not helpful to the mediator or the parties simply to regurgitate the pleadings or to make submissions of law. The case summary should rather focus upon the needs and interests of the parties, and their wishes, hopes and aspirations for the mediation. It is an opportunity to make ‘emotional’ rather than ‘legal’ submissions.
  • Relevant correspondence
  • This should include letters showing the current state of negotiations between the parties and any open offers made or rejected
  • Relevant documents
  • Only documents which the parties regard as vital for the mediator to peruse in order to properly understand the issues in the dispute should be prepared for and sent to the mediator. Background information is often better gleaned personally by the mediator from the parties in private sessions.

Preparing the clients

Legal advisers can serve a very useful purpose in controlling their clients’ expectations. Those parties who enter into mediation with unrealistic expectations will not advance their case or progress their aims and aspirations to the full.

The psychological approach

All disputes have a common theme: one party demands something which the other party is unwilling to give. All disputes involve injury to feelings. Few disputes will be without significant emotional content. It is invariably a psychological or emotional Barrier that creates the blockage to settlement. If every conflict were approached from a purely unemotional, rational, practical, pragmatic or commercial standpoint, without external influences or other constraints, very few disputes would continue in existence. To remain in conflict with another defies rational scrutiny; to continue in a commercial dispute resists economic analysis. It can rarely be in the commercial or practical interests of any party to be in or to prolong conflict with the other.

Corporations can suffer injury to feelings as much as individuals. "Who do they take us for?" "Who do they think they are dealing with?" These are examples of ‘corporate self-esteem. The allegation of "fault" is also highly emotive. To allege a breach of contract or an act of negligence precipitates deep feelings of hurt and anger; to deny fault creates equal irritation, annoyance, distress and frustration.

Most parties in dispute, whether multi-national corporations or simply individuals, have a multitude of covert reasons for being in dispute, and so they come to mediation with hidden agendas and ulterior motives. Frequently, the parties may not even recognise that the real dispute is hidden and covert, and very different to that which is overt and expressed. They may not understand or recognise their own true underlying motivations: they may believe they are simply seeking proper redress or compensation, whereas in fact they are expressing anger and hurt, and a desire to see the other party punished and humiliated by being obliged to pay out large sums of money. They may be motivated by a desire for approval in order to maintain their self-esteem; or their actions may be driven by fear, whether of manipulation or degradation, or some other attack upon their self-esteem.

Mediators trained in the psychotherapeutic approach to conflict resolution are well placed to recognise and understand this psychological underpinning of conflict, and best able to deal with the strategies that parties adopt when attempting to extricate themselves from the dispute. Mediators seek to produce a paradigm shift in attitude in the parties before them - just as the counsellor seeks to generate a shift in attitude towards life generally, so the mediator works towards a shift in the parties’ attitude to the specific dispute in question. The dispute cannot be changed, but the parties’ attitude towards it can. It is only when this shift in attitude is achieved that the parties will be ready to accept solutions which they might previously have rejected.

It is not easy to change people’s attitudes, especially in the short space of time that a mediator has for mediation, and particularly if as so often happens, those attitudes have become rigidly sedimented. Mediators are armed with the knowledge and the skills to achieve this to the parties’ best advantage, so that each party may feel that they have arrived at a settlement with which they can readily live, and which is ‘good enough’ for them..

[For a more in-depth consideration of the benefits of a psychotherapeutic approach to mediation, see the chapter "Why Psychotherapy" in "Mediation - A Psychological Insight into Conflict Resolution" by Dr Freddie Strasser & Paul Randolph (Continuum 2004)]
More information about the book.

 
Copyright © Paul Randolph 2005. All rights reserved.