Mediation Principles

Question 1

What is mediation?

Answer 1

• A process to allow both parties to explain and discuss what their needs and concerns are
• It’s not face-to-face like negotiation, but through a neutral third party selected by mutual agreement
• There is no determination of liability, and settlement is not necessarily based on the underlying legal rights
• Can happen before litigation or parallel to it

Question 2

Why is mediation effective?

Answer 2

• Helps the parties to present their cases effectively
• Creates a balance between the different negotiating styles
• Mediators have a good understanding of styles, strategies, tactics and rules of negotiation
• Proposals offered by a mediator can be perceived as being more attractive than by a party directly
• There is an element of detachment
• The mediator can be skilled at calming and diffusing strong feelings
• Mediators will bring their own personal attributes
• Helps the parties to communicate constructively and effectively
• Mediator will encourage a more accurate and honest assessment of the strengths and weaknesses of each case
• Can avoid over-ready concessions
• Mediators are highly skilled at assessing the needs, interests and positions of the parties
• Negotiations are structured
• Parties likely to be paying for mediation, which motivates them to settle
• Court can direct the parties to attempt mediation
• Puts control in the hands of the parties – they have ‘their day in court’
• Parties can explore options for settlement that could not be ordered by court

Question 3

What are the differences between Negotiation and mediation?

Answer 3

Negotiation

Mediation

Voluntary

Yes

Yes – although Court can order them to attempt mediation

Structured

Not usually

Yes

Takes place through neutral third party

No

Yes – although he won’t normally evaluate claims or advise on outcome unless asked

Parties will be active participants

Not usually

Yes

Witness of fact or expert witnesses directly involved

Not usually

Unusual but possible

Parties choose date/venue/issues/participants

Yes

Yes, although subject to mediator’s availability

Settlement likely in the event of deadlock

No

Yes

Question 4

What is the judicial endorsement of mediation?

Answer 4

• Court always stresses importance of mediation in particular
• Court endorses massive saving in costs resulting from using mediation not litigation
• In cases of strict determination of rights and liabilities, parties should first explore the possibility of settlement (e.g. neighbour disputes), beginning with negotiation
• Suitable for almost all disputes, regardless of subject matter of cause of action

Question 5

What are the advantages of mediation?

Answer 5

• Flexible
• Quicker resolution than litigation
• Cost effective compared to litigation
• Can be arranged relatively quickly
• Takes place with the assistance of a neutral third party, within a structured process
• Confidential and private
• Avoids adverse precedent being set by the court
• Avoids stress and trauma of giving evidence in court
• More likely to preserve relationships than court-imposed solution
• Enables the parties to be more creative (can include an apology, explanation and continuation of a commercial relationship etc)
• Even if settlement is not reached, going through the mediation process may help the parties to understand each other’s case, narrow the issues and sometimes settlement can be achieved more easily after mediation

Question 6

Why might mediation have been chosen?

Answer 6

• Parties may be bound by a dispute resolution clause
• Court may have encouraged or directed it, and the parties may fear adverse costs orders
• Parties may be referred to mediation by a disputes resolution scheme
• Practical considerations may lead the parties to choose mediation
• Tactical reasons – not improper proved the parties have a genuine intention to settle (mediator will detect this in a very short time, and is likely to terminate the mediation if not)

Question 7

Why might a party be reluctant to engage in mediation?

How should you address these concerns?

Answer 7

A party may be reluctant because they feel mediation displays a lack of confidence in his case and gives an impression of eagerness to settle

Should write a letter to the other side, pointing out that the pre-action protocols, the PD-Pre-action conduct and the CPR all require the parties to consider ADR

The letter should put the reluctant party on notice that if they unreasonably refuse, an order for costs (incl. indemnity costs) will be sought against them at trial

A party can suggest that the parties seek help from an ADR provider to give neutral and independent advice on the benefits of mediation

A party may invite the court to stay proceedings and direct the parties to attempt ADR

A party may be unwilling on the grounds that it would delay the litigation process

He should be made aware of the significant saving in time and costs

Mediation can be attempted without a stay in litigation

A stay is usually short anyway, usualy 28 days

A party may fear revealing their case

The parties themselves control the amount of information given to the mediator and what is disclosed to the other side

A party may fear that information disclosed will be used against them in subsequent litigation

Mediation is a confidential, without prejudice process that is only overridden in the most exceptional circumstances

Question 8

What are Mediation Information Assessment Meetings (MIAMs)?

Answer 8

• Mandatory meetings which the parties must attend with a mediator, with a view to obtaining information about mediation, assessing the suitability of the case, and, if appropriate, securing the agreement of all parties to commit to the process
• Currently take place in the small-claims track in the county court
• And family cases
• MIAMs are compulsory consideration of mediation, not mandatory mediation

Question 9

When can mediation take place?

Answer 9

(Before mediation the parties should first attempt to settle by direct negotiation between themselves. This will be less expensive and may narrow issues.)

• Mediation can take place at any stage of the dispute
• It can be an alternative to litigation/arbitration or can take place in parallel

Question 10

What considerations are there in mediation before litigation begins?

Answer 10

A lawyer should consider the following issues in deciding on whether to litigate early:

• Are the issues fully defined yet?
• Is the client’s own case clear?
• Has all the key information been obtained?
• Have the main witnesses been interviewed and have statements been taken from them?
• Is the other party’s case clearly developed?
• Have key documents that are material to the dispute been exchanged? If not, can a court order be obtained for limited disclosure for the purposes of mediation?
• In a technical case, is it necessary to obtain an expert report before attempting ADR?
• Is this a case where it would be more advantageous to the client to secure an early resolution, despite all the information not having been obtained yet?

If the parties have fully defined issues, disclosed key information, and quantified the claim, an early mediation is best

But if a party decides that it would not be sensible, he should be prepared to explain and justify this to the court

The decision should be objectively reasonable on the facts.

Otherwise an adverse costs order could be made against him

Question 11

What are the benefits of commencing mediation before litigation begins?

Answer 11

Neighbour disputes are common:

An attempt at mediation should me made at the beginning and before things turn nasty and expensive

By the time neighbours get to court it is often too late for ADR to have much impact

Litigation hardens attitudes and costs become an aggravating factor

Benefits:

• Achieves largest saving on costs and time
• Parties less likely to have entrenched positions
• Parties have greater incentive to settle – avoiding stress, costs and time of litigation
• Relationships are more likely to be preserved
• Total confidentiality more likely to be achieved

Question 12

Engaging in mediation after litigation begins

Answer 12

• Issues will be defined more clearly and the outcome can be assessed with more accuracy
• However, costs saving decreases the closer mediation is undertaken to the trial date
• So parties who wish to attempt mediation should apply for a stay in order to save costs
• The court may even take the timing of the mediation out of the parties’ hands. It may grant a stay already at the track allocation stage (r26.4) (or any stage) of its own volition
• If mediation cannot reasonable be undertaken before issue, the best time to attempt may be after the exchange of statements of case or after disclosure.

Question 13

What are the

COSTS

of mediation?

Answer 13

The parties’ own costs

• Lawyers preparing position statements, case summaries and other documents
• Solicitor’s and counsel’s fees
• Expert’s costs (if needed)

Mediator’s fee

• Hourly/daily basis
• Depends on nature and value of the case
• May be less if a court or fixed-fee scheme is used
• Fixed-fee is likely to include all associated expenses, although is likely to be higher than a mediator appointed directly
• Fees payable to mediator or ADR provider are usually payable in advance

Expenses of the mediation

• Other associated costs, e.g. venue and refreshments
• Mediation agreement will usually provided that fees and expenses will be borne equally by the parties, and that each side bears their own costs
• However the parties may agree something different (e.g. parties may agree that all costs are regarded as costs in the case, so the overall winner will pay the overall loser’s fees)
• In some cases, a party may be able to recover their costs from the other side in litigation
• Alternatively, a party may be able to recover some or all of their costs by the settlement agreement reached at the end of the mediation

Question 14

What kind of funding is available for mediation?

Answer 14

Public funding

• Legal Aid Agency funds family work. LAA can require mediation to be attempted.
• Public funding will only be available if ADR appears the most cost-effective way
• Public funding may be withdrawn if a party unreasonable refuses to settle at mediation

Conditional Fee Agreement – CFA

• Mediators may mediate on the basis that fee is dependent on outcome
• A success fee (enhancement) is paid upon winning, but upon losing they are paid nothing
• Many mediators will refuse instructions on this basis

Question 15

Style of mediation

FACILITATIVE MEDIATION

Answer 15

Focuses primarily on the real interests and concerns of the parties that underpin the dispute rather than the strict legal merits

Role is active, not passive. Mediator will:

• Ask questions to test strengths and weaknesses of each case
• Explore each situation and help identify what each party really needs/wants
• Encourages parties to think about the likely outcome of litigation (and the cost)
• Focusing each party’s attention on their underlying objectives and needs
• Help work out a creative solution
• Helps negotiating more effectively, formulating offers in an attractive way and giving guidance on making offers and concessions
• Won’t give his own opinions
• Will exert less control and be less interventionist than an evaluative mediator
• Is the primary, true form of mediation

Question 16

Style of mediation

EVALUATIVE MEDIATION

Answer 16

• Will use a facilitative style but will go further and (if asked) evaluate the claim/issue and the strengths and weaknesses of the cases
• Will exert control, and give an opinion on the likely outcome
• Evaluation carried out in a legalistic way, with emphasis on legal and factual issues
• He may be asked to recommend a form of settlement
• Will communicate his opinions to each party
• May be asked to set his opinion out in writing
• Will be limited to what he is asked to do, so as not to appear non-impartial

PROS/CONS

• Some ADR providers do not permit this approach
• Expressing an opinion compromises neutrality
• Evaluation may not be based on complete information and may be misleading
• Providing an evaluation can expose him to a potential claim in negligence
• But it can speed up settlement negotiations
• And provide a reality check to enable parties to move towards settlement

The parties should specify they want an evaluative mediator in advance

Will usually be agreed at the outset and recorded in the mediation agreement (or in the addendum if sought during the course of mediation)

Very similar to conciliation

Question 17

Style of mediation

TRANSFORMATIVE MEDIATION

Answer 17

• Tends to focus on improving the relationship and communication rather than having the settlement as its primary focus
• Aims to help communication so the parties can resolve their own dispute
• Parties will control the nature of the discussions, mediator provides a reflective role

Question 18

Role of the mediator

ORGANISING THE MEDIATION PROCESS

Answer 18

Before the mediation

• When appointed, mediator will contact parties
• In a pre-mediation meeting will explain the nature of the process, how they should prepare, the mediator’s function, the role the parties will play, and costs
• He will discuss with each party who will attend
• He will check that the attendees have authority to settle, any limits on that and what needs to be done to avoid problems thereof
• He will set the timetable for pre-mediation events (agreement signing, returning, date of position statements exchange)
• If a service provider is used, it will make these practical arrangements instead

At the mediation, he performs an organisational role:

• Chair the meeting and managing the process
• Set the agenda
• Control the form the mediation follows on the day
• Decide when discussions should take place in joint or private meetings
• Impose/suggest time limits for delivery of statements in joint meetings
• Decide whether further joint meetings are needed
• Prevent interventions during opening statements
• Ensure parity in the amount of time he spends with each party
• Control the form of questions one party may put to another

Question 19

Role of the mediator

ACTING AS A FACILITATOR

Answer 19

• Gathering information at all stages about the parties’ needs and interests
• Helping the parties to identify legal and factual issues
• Encouraging parties to treat the mediation as their ‘day in court’ and air their feelings privately so they can move forward
• Helping the parties to listen and communicate more effectively
• Diffusing confrontational behaviour
• Encouraging the parties to analyse the strengths and weaknesses
• ‘Reality-checking’
• Encouraging parties to consider the BATNA and WATNA, risk assessment and costs
• Reviewing previous negotiations and encouraging them to see why they failed
• Encouraging brainstorming and generating options of settlement
• Creating and using strategies and options to end deadlock between the parties

Question 20

Role of the mediator

ACTING AS AN INTERMEDIARY

Answer 20

• Enables the parties to negotiate through him can be very effective
• He will keep a record of agreements reached over individual issues
• It is vital that each party trusts him – the mediator must build trust by treating the parties evenly
• He may play devil’s advocate, but must not do/say anything to indicate he is not impartial
• He should not force a solution on the parties

Question 21

What are the ethical considerations of mediation?

Answer 21

Most mediators operate under a Code of Conduct (either their own or of a governing body)

Competence

• Must be competent and knowledgeable in the process of mediation, bearing in mind complexity of the dispute and needs and objectives of the parties
• Includes being adequately trained

Independence and neutrality

• Must ensure there is no conflict of interest with any party, directly or indirectly
• If there is, it should be disclosed immediately to the parties
• He should only act in these circumstances if the parties expressly authorise this in writing
• There are some situations where a mediator must refuse to mediate even where there has been full disclosure and consent:
• Mediator or persons associated have a personal or financial interest in the outcome
• “ has acted for any of the parties at any time in relation to the issues
• a therapist/client or counsellor/client relationship has existed
• Mediator or a member of his organisation has previously acted with a 3rd party whose interest may conflict with either party
• Mediator is aware of circumstances or personal/other reasons which make it impossible for him to act impartially

Impartiality

• He should at all times act, and endeavour to be seen to act, with impartiality
• Must not do anything which demonstrates actual or perceived bias
• E.g performing an evaluative role

The mediation procedure

• Should ensure the parties understand every detail of the process, and the procedure to be followed

Fairness

• Should ensure all parties have adequate opportunities to be involved in the process
• That process is conducted in a manner fair to all parties (e.g. managing dominating parties)
• Must also avoid any party being forced to mediate or settle as a result of unconscionable conduct
• (Although this does not extend to making sure the terms of the agreed settlement are fair to both parties)
• (Must also not put pressure on a party to settle. If this happens, the agreement could be set aside for undue influence or duress)

Confidentiality

• Must keep confidential all information arising out of or in connection with the mediation, including that it will/has taken place
• He should ensure that any files or documents, including personal notes, should be securely and confidentially stored

Termination of the mediation

• The mediator should terminate the mediation if they believe a settlement to be unenforceable or illegal, or that continuing is unlikely to result in settlement
• He should explain that the parties have the right to withdraw at any time, without giving reason for doing so.
• If agreement is reached, he should ensure all parties understand the terms, and that they consent.
• He may give advice (if requested) on how the agreement can be formalised

Repeat instructions

• Be careful that repeat instructions don’t compromise neutrality
• It’s ok as long as disclosure makes all parties aware of prior contact

Practice administration

This requires mediators to:

• Have an efficient system of personal practice administration
• Have access to a complaints resolution system
• Make effective arrangements for obtaining peer review and feedback
• Be insured
• Be sensitive to diversity, equality and anti-discrimination issues

The agreement to mediate is likely to contain provisions which set out the ethical conduct expected.

Mediators from other professions will operate under professional conduct rules specified by professional bodies to which they belong.

Question 22

Which communications are protected by the Without Prejudice rule?

Answer 22

• Applies to communications between the parties in the context of mediation, so these cannot be relied upon or referred to in subsequent proceedings if mediation fails
• Halsey – the court should not know/investigate why agreement was not reached
• The rule applies to communications aimed at settlement before and during mediation
• It’s usually stated in the agreement and strengthened by a confidentiality clause – which the court will uphold
  
  • The court will grant an injunction to restrain any party from referring to any part of the mediation discussion

Communications that are protected:

• Any oral/written communications made specifically for the purposes of settlement (e.g. position statements, correspondence about the mediation, offers or concessions)
• Any communications (with a view to exploring settlement) between the parties and mediator, or parties and their lawyers
• Applies to communications before, during or after mediation
• Communications created for the purpose of trying to persuade the parties to mediate
• Investigations carried out as part of the mediation (the fact-finding process)

Question 23

Which communications are not protected by the Without Prejudice rule?

Can the mediator rely on the rule?

Answer 23

• Open offers
• Offers that can be communicated to the court on the question of costs, after issues of liability and remedies have been determined.
  
  • If a party wishes to rely on a document in relation to costs, they should either mark the document ‘without prejudice save as to costs’ or make a formal Part 36 offer.
  • Then, if the offer is not accepted by the other party, and they fail to beat it at trial, it can be drawn to the attention of the court in order to persuade the court to make an adverse costs order
• Communications that are not aimed at settlement
  
  • E.g. statements of case, contractual documents, documents relating to loss, accident report forms, maintenance records
• Any similar documents that would have to be disclosed during the course of litigation
• The mediation agreement itself (can be produced to prove its terms)
• The court can look at communications to see if a mediation resulted in a concluded settlement
• If all parties waive privilege

If the rule is abused, the court will not allow a party to shield behind it and will order disclosure.

Can the mediator rely on the rule?

• It is not a privilege of the mediator
• If the parties waive it, the mediator cannot still rely on it
• This is so even if the agreement contains an express provision as to the without prejudice nature of the process

Question 24

Legal advice privilege in mediation

Answer 24

• Communications between a party and his lawyer (made for the purposes of giving or receiving legal advice are protected by legal professional privilege
• Waiver of legal advice privilege could only occur in proceedings between the client and the solicitor, and not by suing a third party

Question 25

What is a confidentiality clause in mediation?

Can the mediator enforce the confidentiality clause?

Answer 25

A confidentiality clause in the agreement amounts to a contractual promise by all parties

An injunction can sometimes be obtained to restrain breach of this obligation

Damages can therefore also be claimed for breach

Even in the absence of an express clause, one is likely to be implied

A confidentiality clause reinforces the without prejudice rule and may be wider than it

Unless the agreement provides the contrary, the mere fact that the parties have agreed to try and resolve the dispute by mediation/had a mediation hearing is not confidential (But didn’t it say above that a mediator cannot reveal that the mediation has/will take place??), the confidentiality therefore attaches to the events during the mediation rather than the fact that they are about to or have embarked on mediation.

Examples of a confidentiality clause

Any info, whether written/oral, disclosed to a mediator in private will be treated as confidential by him and will not be disclosed to any other party or person unless:

• The party making the disclosure agrees
• The law requires the mediator to disclose the confidential information
• The mediator believes there is a serious risk to the life/safety of any person if disclosure isn’t made

The parties also agree that they won’t disclose any info arising out of or in connection with mediation, including the facts and terms of settlement, unless they are compelled by law or if necessary to enforce any settlement agreement.

Information given to the mediator

• Any info given/revealed is protected
• The mediator cannot reveal this to the other side or any party unless expressly consented
• Confidentiality applies even after mediation has been completed/terminated

Can the mediator enforce the confidentiality clause?

This is different than without prejudice – the express/implied confidentiality exists not just between the parties themselves but between the parties and mediator, so can only be waived by them all

Question 26

When can the confidentiality clause by overriden?

What are the other exceptions?

Answer 26

Overriding confidentiality provisions in the interests of justice

• The court has the power to override the provisions if in the interests of justice
• Extremely unlikely and will only happen in exceptional cases:
  
  • Necessary to ascertain what was said and done at the mediation in order to determine whether the agreement reached should be set aside for economic duress
  • If one party is seeking to vitiate an agreement reached on the grounds of undue influence or misrepresentation
  • Unlikely to allow a mediator to rely on a clause so as to prevent the parties from revealing advice given by him during the mediation in respect of any action against him for breach of contract/negligence
  • Likely to override in order to determine a professional negligence claim against solicitors arising out of their conduct connected to a mediation

Other exceptions to confidentiality

The exceptions may be spelled out in the mediation agreement:

• Where disclosure is required by law
• To prevent risk of harm to the public
• If the mediator believes there is a risk of significant harm to the heath, life or well-being of a person or a threat to their safety if confidential information is not disclosed
• If disclosure necessary to prevent criminal activity, or prevent the mediator being charged with colluding in the commission of an offence
• If a failure to disclosure may amount to a criminal offence on the part of the mediator

Question 27

Can the mediator be a witness?

Answer 27

• Mediators should not be compelled to give evidence regarding info arising out of mediation
• Exceptions are where all parties agree or there are public policy considerations
• The agreement will usually contain a clause by which the parties agree not to call the mediator or any of his employees/agents as witnesses in relation to the dispute
• But this will be taken into consideration by the court when deciding whether the mediator should be called in the interests of justice
• Limited recollection of the mediation does not prevent a mediator giving evidence

Question 28

Can the mediator be sued?

Answer 28

Legal proceedings

• It is probably an implied term that he should perform with reasonable care and skill
• Theoretically a claim could be brought for breach of contract/negligence therefore
• Such claims are difficult to prove and will raise difficult causation issues
• If a settlement was reached as a result of undue pressure exerted by a mediator, this may provide grounds for overturning the settlement agreement
• The mediator could also be liable if he personally recommends a settlement at a certain level to the parties, if the settlement was unreasonable on the facts
• Some mediation agreements will contain an exclusion clause that purports to exclude the mediator from liability, which may be unenforceable in law or under the Unfair Contract Terms Act 1977.

Disciplinary proceedings

It is possible that these can be brought against a mediator who acts improperly or not in accordance with the code of conduct adopted by the ADR service provider by whom he was accredited and appointed, or by his professional organisation.