An Insight Of Mediation As A Dispute Settlement Mechanism

Following Lord Woolf’s report on the review of civil justice, an increased emphasis has been placed upon Alternative Dispute Resolution (hereinafter ADR). This article will focus specifically on mediation which is one form of ADR. Mediation is a voluntary process which involves the use of a neutral third party, the mediator, who assists the disputants in resolving their issues in a structured manner, within a formal setting and for a defined time period.

As a result of the reforms brought about by Lord Woolf’s recommendations, the Civil Mediation Council (CMC), was set up to ensure that registered mediators possess the requisite qualifications in order to provide competent and ethical standards of work and practice. In his report, Lord Woolf highlighted the benefits that ADR offers potential litigants. These benefits include flexibility and increased cost and time efficiency compared to the traditional avenues of litigation. Statistics obtained from various reports, including those obtained from the Ministry of Justice and the CMC, have shown that the frequency by which mediation is being used is increasing and so is the success rate.

The success of mediation has been supported by a growing body of case law. The landmark case of Dunnett v Railtrack plc highlights that parties who refuse to mediate will face ‘uncomfortable cost consequences’. The Court of Appeal has subsequently softened this hard-line approach but still requires the losing party to prove that mediation would have had no real prospect of success and that the burden of proof rests on the other party asserting that a failure by the other side to respond to an offer to mediate was unreasonable. In addition, Justice Dyson has set out 6 factors to consider when deciding whether a party has unreasonably refused mediation but emphasised that those factors are not exhaustive. 

To aid the mediation process, it is essential to have a competent mediator or mediators depending on the complexity of the dispute. The individual can be someone who has been personally recommended, someone the party knows from prior experience or by using an online tool known as the Civil Mediation Directory. A party may choose a mediator based on his expertise, his performance in an interview, his personality or, if relevant, language and cultural consideration. He must possess relevant, practical and interpersonal skills such as good communication, active listening, patience, empathy and leadership. In addition, a mediator is required to respect some ethical values. These ethical values include but are not limited to maintaining his independence, fairness, remaining competent and impartial, and most importantly maintaining confidentiality. Information communicated to the mediator is considered confidential unless express consent has been given by the party to disclose it to the other parties involved. These communications are also protected by the ‘without prejudice’ rule and legal advice privilege, subject to exceptions.

Mediation in England is a voluntary process and all parties should agree to use it as a settlement mechanism. Before mediation starts, the parties are required to sign an agreement setting out the terms on which the mediator is appointed and any other standard or specific requirements mediation will materialise. The mediator will normally contact the parties to finalise details before the mediation starts. The discussions encompass details such as the venue, attendees, time and duration of the process, setting of a specific timetable, the preparation that is expected from the parties and any specific needs or requirements. The voluntary nature of mediation provides the parties with the right to terminate mediation at any time, thus the needs and requirements of the parties need to be taken into account.

The selection of the venue depends on various factors. Typically, the venue will have at least three rooms. As H. Genn states in her report, “it is important that the surroundings are comfortable, and the sessions are conducted in an atmosphere that is informal but orderly”. It is therefore important that the layout differs from a traditional courtroom. The selection of a venue also includes ensuring that the cost of the venue is affordable and that the room can accommodate the attendees. Whilst mediation often lasts just one day, in some cases, it might be conducted over months. This depends largely on the complexity and urgency of the subject matter. 

The number of people expected to attend the mediation session depends upon the number of people directly affected by the dispute. Blake, Browne & Sime identify in their book a list of key attendees. These include the people who have direct and personal knowledge of the factual issues and the legal representatives of the parties, i.e. their lawyers or acting solicitors. An expert or witness of fact may also attend the mediation if their contribution is important. If the dispute is one where a party is going to be indemnified under a policy of insurance, then an insurer may be among the attendees. It is crucial to have a person who has an authority to settle if the party is an institution. 

The parties will be informed of the documents that they are expected to provide to the mediator. This includes a position statement which contains a summary of the case, the party’s interests and objectives and any negotiation offers may be required by the mediator. This document enables the mediator and the other party to understand the case from their point of view. A party can choose not to disclose his position statement to the other party, but he must state so on the face of the document. For more complex disputes, it may be helpful for the parties to agree upon and to have accompanied with the position statement a chronology, a dramatis personae to identifying the attendees and a Precedent H schedule of costs.

In addition to the aforementioned documents, parties are expected to submit a mediation bundle comprising of statements of case, key documents, witness statements and expert reports, part 36 offers or other offers, any key correspondences between the parties and any case management orders that may have been made. Mediators may limit the maximum pages for the bundle of documents. The parties may choose to submit the documents separately or jointly. To adhere to the confidentiality principle, parties who are submitting the bundle together should submit any confidential document separately. 

A full risk assessment has to be conducted by the lawyers before mediation. This involves assessing the strengths and weaknesses of the case by analysing the law and evidence and using their judgement and experience. In addition to the qualitative analysis, a quantitative analysis must be made. A breakdown of the costs and expenses that are potential and realised must be set out. After conducting the risk assessment and a discussion with his client, the instructed lawyer will have planned out an appropriate negotiation strategy.

The mediation process has four key stages but, due to the flexibility of meditation, it is possible to deviate from this process to suit the needs of the case. For example, in cases that raise public policy or environment issues. During the opening stage the mediator will convene a joint meeting and will set the tone for the day through an opening statement. He will be sitting at the head of the table with the parties sitting next to him instead of the lawyers. The opening statement will explain the agenda, highlight the confidentiality and voluntary nature of the process and reiterate the neutrality of the mediator in reaching a settlement. As Genn observes “at the preliminary meeting, the role of the mediator is to reduce tension, and produce a calm and constructive atmosphere”.

Parties will then summarise their complaints and are offered the opportunity to put forward their perspective on the dispute. The mediator may impose time constraints on parties, but this will depend on the complexity of the issue. Whilst one party is speaking, the other party must refrain from interfering until the end, when he will be allowed to ask questions to clarify issues. An effective opening speech is concise but persuasive and delivered with confidence and conviction. After the party has spoken, their lawyer may deal with the legal merits of their case followed by evidence from witnesses and experts. At the end of each party’s opening statement, the mediator will seek to clarify unclear points. The mediator will then close the meeting by explaining to the parties the next stage of the process.

During the exploration stage, the mediator will hold private meetings and the parties may disclose any confidential information. It is at this stage that parties gradually reassess their case with the help of the mediator. The mediator will explore the underlying issues by asking open ended questions to adjust their perceptions. A major part of this stage involves making the parties have a more realistic assessment of the dispute by conducting a ‘reality check’. The mediator will then explore party settlement options.

The negotiation stage follows, where the mediator will commence the process of ‘shuttle diplomacy’. The mediator will shuttle between the parties bringing them offers, counteroffers, concessions and conveying authorised information. This process has led authors such as Roberts to view mediators as “constructors of deals”. If a stalemate has been reached, the mediator will try to break the deadlock by employing techniques such as calling for a joint session, producing a draft agreement, inviting the parties to consider the situation from the opponent’s perspective or by finding alternative ways to formulate offers.

The final stage of the mediation process is the settlement phase. Once a settlement has been reached, it needs to be documented and signed by the parties to become complete and legally enforceable. This agreement is subject to contractual principles. The drafting is usually carried out by both lawyers in a joint meeting with reasonable skill and care. This drafting is supervised by the mediator to mediate any disagreement over the terms and to ensure that all the important points have been included, and contingencies considered. If no settlement has been reached, the mediator will record and highlight any progress that has been made. 

With ADR being embedded in pre-action procedure, there has been an increasing trend in the use of mediation as an alternative to litigation, due to its flexible, voluntary and confidential nature. The mediator acts both as an intermediary with limited scope for intervention and a facilitator by proving parties with specialist analysis and advice. The preparatory stage of mediation is a vital stage and it creates foundations for achieving an effective settlement. On a final note, not all mediation culminates in the signing of a settlement agreement.

Bibliography

Case Laws

• Brown v Rice & Patel [2007] EWHC 625
• Dunnett v Railtrack plc [2002] All ER 850
• Halsey v Milton Keynes General NHS Trust [2004] EWCA (Civ) 576
• Hurts v Leeming [2003] 1 Llyold’s Rep 379

Journal Articles

• Roberts S ‘Listing Concentrates the Mind: The English Civil Court as an Arena for Structured Negotiation’ (2009) 29(3) OJLS 457
• Lord Woolf, Access to Justice, Interim Report (1995) Lord Chancellor’s Department

Books

• Blake S, Browne J & Sime S, A practical approach to alternative dispute resolution (5th edn, OUP 2018)
• Genn H, Mediation in Action: Resolving court disputes without trial (Calouste Gilbenkian Foundation 1999)