#10465 - Unit 5 – Mediation - Commercial Dispute Resolution

Unit 5 – Consolidation CDR

What will we be examined on?

what is mediation as a form of dispute resolution
Be able to identify which form of ADR is best? [party wants to maintain relations/confidential etc/save costs]
explain the mediation process
how to draft a case summary

benefit of ADR is that wider remedies than litigation
Mediation clauses are enforceable as long as they are sufficiently certain (who will be mediator/how appointed etc?)

OUTCOME 1 – cost consequences of refusal of ADR

if your refusal is unreasonable the court will penalise you in costs

Dunnett v Railtrack (2002) was the first case where the winner didn’t get costs because of their unreasonable refusal to mediate:

- For first time since CPR introduced a successful litigant didn’t get costs award they might have expected because they didn’t mediate

*Lord Justice Dyson Halsey* reasonable guidelines:**
Nature of the dispute	ADR not appropriate if C seeking a remedy that only the court can give (injunction) Remember that mediation is possible at any time (e.g. after the injunction/undertaking has been granted) If the parties need the court to resolve a point of law which establishes from time to time and which is essential to the future trading relations of the parties under a long term contract Where the dispute involves allegations of fraud or commercially disreputable conduct
Merits of the case	If a party reasonably believes they have a strong case then the court might think they have a good reason for reasonably effusing ADR because: ADR inevitably leads to concessions you don’t think you need to make as your case is so strong you would win in court If this wasn’t the case there would be scope for C to use threat of costs sanctions to extract a settlement from D even where claim is without merit (e.g. C hoping to get a nuisance value offer from a large D to buy off cost of mediation) Daniels v The commissioner of police for the Metropolis 2005 – reasonable for public body (police) to refuse ADR in circumstances where it wished to contest what it considered to be an unfounded claim In truly borderline cases, the fact that a party refused to ADR because he thought he would win is to be given little or no weight when considering the reasonableness of refusal to ADR The party MUST reasonably believe his case is watertight, unreasonable belief is no justification
Extent to which other settlement methods have been attempted	If previous settlement offers have been made and rejected this shows that one party is making efforts to settle and the other has unrealistic views of the merits of their case, may make it more reasonable BUT mediation often succeeds where previous attempts to settle have failed Remember that court would know about P26 offers as this is decided at the end during costs
Whether costs of ADR would be disproportionately high	When the sums at stake in litigation are comparatively small. A mediation can sometimes be at least as expensive as a day in court Prospects of mediation being successful cannot be predicted, possibility of successful party having to incur costs of an abortive mediation is a relevant factor
Whether any delay in setting up and attending the DR would have been prejudicial	If mediation is suggested late in the day, acceptance of it may have the effect of delaying the trial of the action then this may be relevant
Whether ADR had a reasonable prospect of success	Most of the time it will do because you cannot rely on your own unreasonableness “I was never going to try so it wouldn’t have worked” A valid reason would be that A reasonably took the view that B is unlikely to accept a reasonable compromise Some disputes are more intractable than others Some mediators are more skilled than others The burden of proving an unreasonable refusal is on the unsuccessful party and therefore they must show that mediation did have a reasonable prospect of success He doesn’t have to prove that mediation would have succeeded just that there was a reasonable prospect of success It is easier for him to prove this that for successful party to prove the contrary

- para 8 PD on Pre-action conduct – while ADR is not compulsory, the parties should consider whether some form of ADR procedure might enable them to settle the matter without starting proceedings

- PGF II SA v OMFS Company 1 Ltd 2010 – silence in response to the oppositions requests to mediate amounts to a refusal to mediate which may be unreasonable

OUTCOME 2 – Be able to:

identify legal issues in dispute and possible outcomes at trial
recognise strengths and weaknesses of parties bargaining position
Needs and desires of the parties

FOR ALL OF THE ABOVE CHECK THE FACTS IN THE EXAM QUESTION

Basis of settlement between parties
Finalise a settlement

Have you agreed what will happen to the court proceedings?
Have you dealt with any interim apps or undertakings?
What has each party agreed to do?

Logistics of the agreed activities?
Any problems with the agreement?
Precise timing? Is it realistic

Have you agreed that one party pays money to the other?

Precise timing?
Method and place of payment?

Have you agreed any property transactions (sale, lease, grant of right over land)?

Have you covered legal formalities for grant/transfer of an interest in land?
Have you thought about possible future use of land in question?

Have you dealt with cost of court proceedings?

OUTCOME 3 – Draft a confidential case summary for use in mediation

1. The parties
Describe the parties to the dispute Names, addresses and any “abbreviations” to be used throughout
2. The court proceedings
When proceedings issues and what were was the application for? What stage has case reached? Concise description of your clients case (don’t need to much detail as mediator will read court docs in mediation bundle Are there any relevant time restraints? Any interim apps/undertakings given by either party and there date? Any case management directions and there date?
3. Costs
What are your client’s costs to date? What do you estimate that your client’s costs will be to trial? Is your client paying privately, are they legally aided, funded by CFA or covered by legal expenses insurance? If client funding privately, say that they wish to avoid costs of preparing evidence, instructing their experts and attending trial
4. Other issues
Are there any matters in the background which you think the mediator ought to be aware of
5. Basis for settlement
Have any offers of settlement been made by either party? What does your client hope to achieve from the mediation? What do you think the opponent hopes to achieve from the mediation? Is there any possible common ground which could form the basis for the settlement?
6. Attendees
Client (individual or representative on behalf of a co) Solicitor, name and firm
Note: When drafting, bear in mind the following: doc will be confidential to you, client and mediator unless otherwise agreed be open in your approach to the mediator, it is quite unlike the approach which you would take to a hearing in court. Mediator is not permitted to pass anything which you or your client says to opponent without permission

OUTCOME 4 – Understand and advise about process of mediation

- Form of non-determinative ADR, agreement must be consensual and cannot be imposed by the mediator

- CEDR defines it as a flexible process where mediator actively assist parties

When to mediate:

- CPR 1.4 sol must discuss some for of ADR with client

- Mediation can take place at any time during the course of the dispute resolution process (even after judgement, when appeal pending)

- Should not be considered as an either or (litigate or mediate)

Setting up the mediation process:

- Check for mediation clause, if there isn’t one parties must agree how mediation is conducted and who is going to act as mediator

- Parties can select a mediator themselves or request an ADR organisation

- Who will pay mediators costs and costs of the venue (usually shared)

- Parties usually agree to pay...

#10465 - Unit 5 – Mediation - Commercial Dispute Resolution

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