25 February 2020

Resolving Dispute by Mediation

There are some disputes which simply cannot be resolved without having all the issues flushed out before a Judge who will then make a decision binding on the parties, subject to the usual rules of appeal. These types of case are actually very rare.

The reality is that around 80% of claims which are made at court and defended will actually settle before trial. That statistic doesn’t include cases that are resolved prior to a claim being issued at Court or issued and then not defended.

Some of those settlements can be achieved with sensible discussions as between the parties’ solicitors and good (realistic) advice being given as to chances of success, but more and more claims are now being settled by formal mediation of the dispute.

Mediation is, at its heart, a focussed and swift (all things are relative!) negotiation.

There are no hard and fast rules other than invariably a rule saying that the discussions that take place within the mediation process are strictly without prejudice and therefore cannot be referred to or relied upon in the claim itself should the parties fail to reach agreement.

The mediation will be run by a specialist qualified Mediator. It will start with each of the Parties in different rooms and after some initial discussion with the Mediator the Parties are generally asked to come together in a plenary session in another “neutral” room where anyone part of the process (be that Advisors or Parties) may have the opportunity to set out their thoughts to the other parties.

The Parties will then retire to their respective “breakout” rooms. The Mediator will spend the rest of the mediation shuttling between the rooms discussing ideas for settlement and asking the parties to test the strength of their own case and think hard about the prospects of success and the risks associated with potentially losing.

Mediation is not governed by the court rules or the common law as it relates to the questions within the claim itself so there is no limit to what could be agreed as a settlement. The Court is usually bound in the breadth of decisions it can make; Possession Order or not; Money Judgment or not. In a mediation the Parties can agree terms which the court wouldn’t be able to arrive at, for example a claim for damages for disrepair of a leasehold property settled by an early surrender of the lease and a short rent free period.

This is one of the reasons why it is said that around 90-95% of mediations achieve a settlement.

A litigant would be ill-advised to start a Court Claim with an intention only to get to a mediation but mediation is an excellent way of resolving disputes when they do arise.