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Why is mediation important?

13 January

Why is mediation important?

At some point in your life, you will probably need to instruct a lawyer. It may be that you want to draft a will, or you might require help in purchasing a property. It is less likely that you find yourself in a situation where you have to instruct

Your perception of what might happen in a legal dispute (should you ever find yourself thinking about such things) might be that at some point, somebody says “I’ll see you in court”, the case goes to trial and the lawyers are the main winners.

What might come as a surprise to many is the fact that, in modern English dispute resolution, it isn’t automatically assumed by the courts – or the lawyers – that a dispute will end up going to trial; quite the opposite.  Any party unfortunate enough to find themselves involved in litigation will be expected by the courts to take all reasonable steps to try and settle their case before trial and, ideally, before legal proceedings have even been issued.

What is Alternative Dispute Resolution?

Mediation is one possible method of “Alternative Dispute Resolution” (ADR), and the method with arguably the highest profile. 

Since the Civil Procedure Rules were introduced in 1999, ADR has become increasingly important, and the profile of mediation has grown hugely as a result.  Other elements of ADR can include written or verbal negotiation and “without prejudice” meetings between the parties.  Mediation though, as it relies on the skills of an independent mediator, is often seen – with some justification – as a very good way of settling a case on terms that are agreed by the parties, and which avoids those parties incurring further costs, and risk, in taking their case to trial.

What is mediation?

In terms of practicalities, mediation will often take place at a neutral venue, with the independent mediator shuttling between the parties (who sit in separate rooms) trying to find a workable solution to the problem.  Mediation tends not to be based on the legalities of the dispute, but on a broader attempt to get the parties to find what they can both “live with” in order to bring their dispute to a close. 

Why should I consider mediation? 

There are many practical reasons why parties might wish to settle their case at mediation, often on less attractive terms than they may have hoped to achieve at the start of the process.  As is well known, the costs of legal disputes can be punishing.  No party can ever be entirely sure of what the outcome would be if the case did go to trial and, as a general rule, every party needs to be aware that, if they do lose their case at trial, the normal position is that they will be expected to pay their opponent’s reasonably incurred legal costs.  Litigation, particularly for individuals and small businesses, can be a draining and upsetting experience.  These are all legitimate, practical reasons to want to settle a case at mediation, and so draw a line under the dispute.

Does mediation always work?

Mediation of course may not be successful in solving the issues between the parties and bringing the dispute to an end (though anecdotally, the suggestion is that around 8 out of 10 mediations in the dispute resolution arena are successful). 

Do I have to consider mediation?

Mediation is also not obligatory under the current Civil Procedure Rules and, whilst legal commentary often raises the possibility of this situation changing, it seems unlikely to happen in the near future.  A party involved in litigation may think that, in those circumstances, it is not worth their while mediating their case. 

Does refusal to mediate have any impact on my case?

However, irrespective of the practical reasons for mediating, there are also good tactical reasons to mediate.  It has become clear, based on numerous court decisions in recent years, that any party refusing to consider mediating their case takes a big risk.  Refusing to mediate won't impact on the outcome of the case at trial as such, but such a refusal could have a huge impact on the costs of the case.  Put simply, the courts do not want litigants clogging up the court system with cases that could have been settled without the need for court involvement. 

Reported cases make it clear that courts are often prepared to make orders penalising parties who have won their case at trial, in terms of the costs they can recover from the losing party.  Given how high the amount of incurred costs frequently are, in relation to the value of the dispute, this should always be a vital consideration. 

Case law suggests that, even if you think that your case is so strong that there is no point in mediating because you are sure to win at trial; if you think that the mediation simply can’t work because of the bad relationship between the parties; even if you fail to explain why you are not willing to mediate; you could be at risk of a negative costs order at the end of a trial, no matter how strong you might think your case is. 

Generally, the courts are in favour of mediation

Whilst the general judicial trend seems to be in favour of mediation, in the interest of balance it should be said that you can never be entirely sure of what could happen if your case proceeds to trial.  There have been cases where courts have found that it was reasonable for a party not to mediate in a dispute.  There will always then be an element of uncertainty as to how a court would look at a refusal to mediate.  Whether it is worth taking that risk over the costs of the case is a question that will always require very careful consideration.