#10327 - Mediation - BPC Alternative Dispute Resolution

MEDIATION

• what is mediation?

  • = negotiation facilitated by a neutral 3rd party

  • confidential

• how do you end up in mediation?

  • voluntary by consent of both parties

  • directed by courts (robust encouragement, but can't compel)

  • pre-action protocols

  • dispute resolution clause in contract

  • referred by dispute resolution scheme

• best time to mediate

  • ideally, before litigation starts - especially if issues fully defined, claim quantified and key info disclosed already

  • after litigation starts - if issues not defined to the extent early mediation cannot result in settlement

• suitable and unsuitable case types

  • suitable cases (e.g.s)

    • contracts for goods / services

    • landlord and tenant disputes

    • land disputes

    • clin neg

    • insurance disputes

    • building disputes

  • unsuitable cases

    • where precedent needed to clarify law / inform policy

    • where settlement not in public interest

    • where settlement not possible due to party's past conduct

    • where protective proceedings required

    • where SJ appropriate

  • PI? no automatic assumption unsuitable, but if parties refuse probably not worthwhile trying to change their mind

  • indicators and counter-indicators of suitability

    • must be prepared to and capable of discussing solution, and must be room for negotiation e.g. not suitable in simple debt claim

    • indicators:

      1. result other than that possible through court ruling desired

      2. speedy solution desired

      3. 'legal proceedings fatigue'

      4. long-term relationship (friends, family, business etc.)

      5. common future interest(s)

      6. more litigation / conflicts than presented in proceedings

      7. importance of confidentiality

      8. more parties involved in conflict that just those in proceedings

      9. longstanding solution essential

    • counter-indicators

      1. earlier mediation attempt failed

      2. parties are comfortable with their conflict

      3. precedent desired

      4. public decision desired

      5. too great a power imbalance

      6. parties have cultural background unsuitable for mediation

      7. legal procedure where only court ruling can bring solution

• professional ethics

  • mediator (BSB Code of Conduct applies to barrister-mediators)

    • competent

    • independent + neutral

      • must refuse to mediate if conflict of interest e.g. personal / final interest in outcome, acted for one of parties in past

    • impartial

      • act and be seen to act impartially

      • being repeatedly instructed by 1 firm does NOT compromise provided disclose to parties

    • ensure parties understand procedure

    • fairness between parties

      • manage dominating parties

      • avoid unconscionable conduct producing settlement

      • don't put undue pressure on party to settle

      • express concerns to parties + lawyers if suspect position misrepresented / info inaccurate; halt process if necessary

    • confidentiality

    • termination of mediation

      • if settlement unenforceable / illegal

      • explain parties have right to withdraw at any time without giving reasons

      • ensure documents securely and confidentially stored

  • barrister

    • position statement - ensure all allegations properly arguable + supported by instructions

    • don't knowingly / recklessly mislead

      • don't be dishonest - can't say anything know or suspect not true, even if client wants this to be done to gain stronger bargaining position

      • don't act for client engaging in ADR with improper motive

• mediation agreement

  • parties must sign before mediation, usually standard form

  • lawyer checks and signs

  • = contract between mediator and parties

  • key clauses

1. scope of mediation - by reference to the dispute, making clear which issues referred

2. practicalities - names of parties + attendees, time, place, confirmation parties have authority to settle

3. confidentiality

4. WP

5. neutrality + impartiality of mediator

6. mediator will not reveal confidential info without consent of provider, unless required as matter of law

7. parties will:

   1. NOT call mediator as witness

   2. NOT require mediator to disclose notes made re: mediation

   3. indemnify mediator for costs of resisting / responding to application required

8. mediation will be conducted under Code of Practice of mediator / organisation concerned

9. settlement NOT binding until recorded in writing + signed by parties

10. costs

• position statement

  • lawyer drafts

  • purpose: brief mediator on each side's case

  • if directed by court / dispute resolution clause, may be a deadline by which you have to serve position statement, usually 7-14 days in advance of mediation

  • attach chronology + list of dramatis personae

  • content

1. heading - names + description of parties, 'without prejudice for use in mediation only', ID party on whose behalf made

2. make clear if going to other side or just mediator

3. formalities - date, time, mediator, attendees + whether they have authority to settle

4. facts

5. issues - legal and factual

6. key issues of primary concern

7. party's case on issues

8. party's interests and objectives

9. position on issues

10. further information if required (though no forced disclosure)

11. negotiations to date

• key supporting docs

  • agreed bundle - SoCs / letter before claim, WSs disclosed by parties, expert reports, offers, documents re: quantum, correspondence etc.

  • confidential bundle NOT revealed to other party - common if disclosure not taken place

    • disclosure NOT compulsory BUT failure to disclose key documents may result in settlement being overturned

    • mediator will refuse to communicate offer / info to other side that is contradicted by confidential doc he is aware of

• costs

  • party's own costs

    • lawyers fees for preparing position statements etc. + preparing + attending mediation

    • expert fees (if necessary)

    • standard term in mediation agreement usually = each party bears own costs BUT can agree otherwise e.g. loser pays

  • mediator's fee - hourly / daily, payable in advance

  • expenses of the mediation

    • venue, refreshments etc.

    • mediation agreement usually states split equally BUT can agree otherwise e.g. loser pays

  • recoverability from losing party in litigation

    1. if the mediation agreement deals with costs, court will enforce its terms (any Tomlin order only refers to the costs other than ADR and does NOT override the mediation agreement)

    2. if mediation agreement does NOT deal with costs, recoverable if 'incidental' to proceedings (s51 SCA)

       1. mediation costs incurred as part of complying w/ pre-action protocol - yes

       2. costs of a separate stand-alone mediation - no

• styles

  • used in combination

  • facilitative (the norm)

    • does NOT give opinion on merits of case, evaluate likely outcome or put forward settlement proposals

    • BUT not passive - explores situation and IDs true objectives, asks Qs that test strength and weakness of case

    • can intervene, but not especially interventionist

  • evaluative / directive N.B. large overlap with conciliation

    • mediator evaluates dispute + expresses non binding opinion on likely outcome / suggest settlement range

    • only at request of both parties

    • record in mediation agreement or add it if request made during mediation

    • usually communicates opinion privately to each party, but can be joint meeting

    • exerts more control, interventionist, challenge parties to re-evaluate

    • problems: neutrality may be compromised, unlikely to have all documents, so evaluation incomplete

    • advantages: can speed up process, provide reality check to enable settlement

  • transformative

    • primary focus on improving relationship + communication (NOT settlement)

• duty of confidentiality in mediation

  • confidentiality

    • express confidentiality clause

    • if no express clause, likely to be implied

    • can obtain injunction + damages for breach

    • unless mediation agreement provides otherwise mere fact parties have tried to mediate NOT confidential

    • general duty

      • party-party communications + party-mediator communications should NOT be revealed to:

        • court (if settlement NOT reached); or

        • 3rd party (regardless of whether settlement reached)

    • duty in party-mediator communications in private meetings

      • confidential unless disclosing party agrees otherwise

      • separate and enforceable duty

    • exceptions

      • court will override if disclosure in interests of justice (can also explicitly agree in mediation agreement)

1. setting aside settlement agreement on grounds of economic duress, undue influence, misrep

2. claim against mediator or solicitor for negligence / misconduct

3. risk of harm to any person

4. to determine if settlement reached in mediation

5. prevent commission of crime

6. statutory duty of disclosure

   • all parties waive

     • can the mediator enforce the confidentiality clause?

       • yes - express / implied clause in mediation agreement, binds all parties to agreement (including mediator)

       • parties + mediator required to waive N.B. CANNOT rely on WP

     • can be waived in following circumstances:

       1. important for public mediation to take place where several interested parties

       2. parties want settlement to be made public

       3. parties agree info from private meeting can be revealed to opposing party

   • legal professional privilege applies to mediation

   • mediation privilege?

     • suggestion that new common law privilege should be created for mediator-party communications, similar to legal professional privilege

   • without prejudice

     • applies to often WP clause in mediation agreement + bolstered by confidentiality clause (see above), both enforceable by injunction

     • applies to:

       • communications aimed at settlement: before mediation agreement signed, before mediation commences, during mediation:

         • position statement

         • offers + concessions

         • correspondence about mediation

         • communications created to try to persuade the parties to mediate

       • investigations conducted as part of mediation process

     • does NOT apply to:

       • open offers

       • costs offers

         • mark document 'WP as to costs'; or

         • Part 36 offer - if offeree rejects and fails...