A dispute has arisen and mediation has been suggested as an option. The board wants to know more about what this involves. Read on for our answers to some frequently asked questions.
What is mediation?
A without prejudice settlement discussion facilitated by a neutral third party mediator.
Will we look weak if we are the ones to suggest mediation?
No. The court expects parties to try to resolve their differences without the need for a trial. The Civil Procedure Rules promote settlement and the court may penalise a party which it considers has unreasonably refused to mediate. An offer of mediation is therefore a common step in a dispute.
Will the mediator decide the case?
No. Their role is purely to facilitate settlement and not to impose a decision on the parties.
What happens if we agree a settlement?
You will normally agree the terms of a binding settlement agreement that will settle the dispute and dispose of any court proceedings that may have been issued.
Why use mediation rather than another settlement method?
Although not suitable in every case, mediation can be a very useful method to help focus the parties’ attention on settlement and try to bridge the gap between them. Settlements can also go beyond what the court would be able to order. For example, a confidentiality clause or a non-disparagement clause could be included in the settlement or an agreed press release setting out what the parties agree they are allowed to say about the case. A settlement could also be on the basis of an agreed future trading relationship such as discounted rates or an agreement to enter a new contract.
Who pays for the mediation?
The usual position is the parties bear their own costs of the mediation and share the mediator’s costs 50:50. If settlement is reached this usually includes agreement about overall liability for costs. If no settlement is reached then the costs usually form part of the costs of the case and will be assessed by the court after trial if settlement is not achieved before then.
What happens if we can’t reach an agreement?
The case will continue if proceedings have been issued, although often an unsuccessful mediation can still lay the groundwork for further settlement discussions. If the case is not settled then at trial the judge will not be aware of any offers which were made during the course of the mediation.
How long does it take?
You should normally set aside a day for mediation in person, although it can be a very long day often going into the evening with lots of apparent inactivity. Be prepared to eat a lot of biscuits!
What can I do to prepare?
Give careful thought to the highest/lowest figure you are prepared to pay/accept and ensure the individual attending the mediation is appropriately authorised. It is always worth having some contingency to be used if necessary. There is nothing worse than being a few thousand pounds away from a settlement and the scope of authority to settle has been exhausted.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.