#16054 - Mediation - BPC Alternative Dispute Resolution

Mediation

Egs of Mediation/ADR Providers

• CEDR (Centre for Effective Dispute Resolution)

• ADR Group

• Conflict Resolution Centre

• Civil Mediation Council (brings together providers, mediators academics, legal professional bodies)

(1) What is Mediation

• A confidential, structured process;

• Involves a neutral/independent third party;

• Facilitates the parties working towards a negotiated settlement (a form of neutrally assisted negotiation).

• Non-adjudicative;

• Voluntary process, non-binding (until the point of settlement).

• There is no determination of liability in mediation; any settlement reached is not necessarily based on underlying legal rights/obligations of parties.

(2) Why do parties mediate/How do parties find themselves in mediation?

• From a contractual obligation (a dispute resolution clause in the contract, that first attempt to resolve any dispute shall be by mediation);

• Court ordered stay (may require the parties to undertake ADR including mediation)

• Court may have encouraged parties to attempt to settle by mediation, and the parties may fear adverse cost orders/other sanctions if they unreasonable refuse to mediate.

• Parties have Voluntarily chosen to mediate

• Parties are referred to mediation by a disputes resolution scheme.

• Tactical reasons

  • eg seek clarification of issues; assess strengths/weakness of other side’s case). Such intentions are not improper if coupled with a genuine intention to explore settlement.

  • Eg fishing expedition, is probably bad faith, no genuine intention to settle.

• Practical considerations, eg:

  • Desire to settle a multiplicity of claims re a number of different but related issues (in court, each claim may proceed in different courts/jurisdictions);

  • Where a multitude of parties, eg a number a number of Ds and additional parties; all parties & claims can be brought into the mediation process.

(3) What preparation to lawyers do before mediation?

• Review and sign mediation agreement

• Check parties’ authority to settle

• Prepare a position statement

• Manage/explain mediation process to client

• Decide who should attend mediation

• Decide what docs need to be prepared and exchange, prepare bundle (preferably joint)

• Decide if and what expert evidence should be sought on any issue

• Choose a mediator

• Prepare any docs/evidence

• Prepare statement of costs to date and going forward (costs that would accrue if went to trial)

• Identify legal & factual issues;

• Evaluate the evidence, reach conclusion on likely outcome.

• Consider with client BATNA and WATNA (will include consideration of costs)

• Plan a strategy for negotiation.

• Identify objectives for mediation.

• Do a costs analysis.

What preparation does the mediator do?

• Reads the papers sent to her, including any confidential briefing

• Contacts each of the parties/lawyers (pre-mediation meeting/phone call), to ensure they understand the mediation procedure; ask if they need to know anything further.

• Check who is attending, including people with authority to settle

• Discuss the likely duration

• Sometimes ask the lawyers to discuss with their respective clients possible terms of settlement and consider drafting them in advance

• Find out what experience of mediation the lawyers and parties have.

• Set timetable for pre-mediation events, eg when mediation agreement should be signed & returned; date for providing and exchanging position statements and docs).

The Mediation agreement, what should it contain

• The Mediation agreement = the contract between the mediator and the parties appointing him.

  • Sets out terms on which the mediator is appointed and the scope of the mediation.

  • It regulates the relationship between the parties themselves and between the parties and mediator.

  • By signing the mediation agreement, the parties demonstrate a degree of commitment to the mediation.

• Courts have recognized that: mediation agreements are valid and they contain enforceable terms.

• Courts have granted an injunction to restrain breach of a confidentiality clause in such agreement.

• Most agreements will contain the following key clauses:

  • That the parties are attempting to settle dispute at mediation

  • Role of mediator

  • Terms on which mediator is appointed

  • Scope of mediation (if it is only to deal with certain aspects of the dispute) which issues in dispute are to be mediated.

  • Practicalities, eg

    • names of parties and mediator;

    • date and time and place of mediation;

    • duration;

    • that the reps of the parties attending the mediation have authority to settle).

    • Fees.

  • Express clause that Process is confidential: that neither party can reveal any details of the mediation process or any info obtained during the mediation, without express consent of all parties.

  • Express clause re ‘without prejudice’ rule protection for comms between the parties and/or the mediator.

  • Preparation and exchange of documents for the mediation

  • The procedure that will be followed at the mediation

  • The mediator is neutral and impartial.

  • An immunity clause for the protection of the mediator.

  • That the parties will not bring a claim against the mediator (at all, or only in very limited circumstances).

  • That the Parties will not call the mediator (or his employees/agents) as a witness or expert in later legal proceedings in connection with the dispute or in relation to any matter arising out of the mediation.

  • Mediation will be conducted under mediation standard rules and/or Code of Conduct.

  • Any settlement reached will not be binding until recorded in writing and signed by the parties (/other steps required if a settlement is reached).

  • Set out the costs & expense of mediation and who is responsible.

    • Often provides that fees & expenses should be borne jointly and that each party is responsible for their own legal costs. & that each Party agrees that any court/tribunal may treat the Mediation fees and parties’ legal costs as costs in the case in relation to any litigation/arbitration, where that court/tribunal has power to assess or make orders as to costs.

  • An express term that each party will ensure the mediation is attended by someone with authority to settle.

  • Which law the agreement is governed by: eg England and Wales. And courts of Eng & Wales have exclusive jurisdiction to decide any matters arising out of or in connection with this Agreement and the Mediation.

  • That the referral of dispute to mediation does not affect any rights under Article 6 ECHR if mediation does not result in settlement, the parties’ right to a fair trial remains unaffected.

(4) What goes in a position statement?

• Confidentiality (that the info is confidential & without prejudice)

• Formalities: Date & Time & Location

• Facts

• Issues – Legal and factual

• Position on issues (the party’s case on the issues)

• Client’s objectives/interests

• Further info required

• Summary of ADR/negotiation history (eg if an offer, including any Part 36 offer, has already been made).

• Documents which should accompany the position statement:

  • Chronology

  • Dramatis personae

  • Precedent H Schedule of Costs – if a schedule of costs has been prepared for litigation.

• Key supporting docs

  • Each party will prepare a bundle of key docs for the M, to support the assertions & arguments made in the position statement.

  • Docs purpose are to: inform M of the issues in dispute; of the strengths of each party’s case; enable M to test the other side’s case.

  • Where possible, parties should cooperate and produce an agreed bundle, consisting of:

    • Statements of case if proceedings have been issued, and detailed letters of claim if proceedings not issued.

    • Witness statements that have been disclosed by the parties

    • Any expert reports

    • Any case management orders

    • Part 36 offers or other offers made but not accepted

    • Any key docs that relate to the issues in dispute. Eg docs re quantum

    • Any other relevant correspondence

  • Confidential bundles:

    • Parties can also produce a small bundle of additional docs for the mediator which they do not wish the other side to see. Eg setting out party’s view of the case, issues they are willing to compromise on, counsel’s opinion on liability/quantum etc.

  • Parties are not obliged to disclose anything; but bear in mind CPR and Pre-Action Protocols encourage a ‘cards on the table’ approach to litigation.

Possible attendees of mediation

• Reps of the parties (if individuals, themselves; if companies/bodies, a representative, someone with direct personal knowledge of the issues)

• Person with authority to settle (if a body/organisation/company)

• Lawyers

• Insurers

• Interest groups

• Experts (rare)

• Witnesses of fact (rare)

(5) How is settlement recorded & enforced?

• Same as with negotiation, remember you first need to ask ‘have proceedings been issued?’

• If proceedings started, settlement recorded by:

  • (1) settlement agreement

  • & (2) consent order (Tomlin Order?)

• If proceedings not started: just (1) settlement agreement.

• Enforcement:

  • Breach of contract (re the settlement order)

  • Contempt (re the consent order)

What can be done to make a reluctant party engage in mediation?

• If one party wants to try mediation, and the other does not, steps can be taken:

• (1) a letter should be written to other side:

  • pointing out that pre-action protocols/PD and CPR all require parties to consider using ADR to resolve dispute before issue of claim, and at the allocation and case management stages of the case.

  • Letter should put the reluctant party on notice that if they unreasonably refuse to engage in mediation/another ADR process an order for costs (including indemnity cots) will be sought at trial.

• (2) a party can suggest that the...