Mediation has become a very significant feature of the dispute resolution landscape. This article/FAQ/fact sheet, call it what you will, looks to provide a simple explanation of all you might want to know about it.
What is mediation?
Mediation is an alternative form of dispute resolution to litigation. It is a process where the parties meet together with a neutral third party (the Mediator), who will attempt to encourage discussion that will lead to the resolution of a dispute. It is completely voluntary and will only take place if all parties involved agree to mediate. The mediation takes place in private and is entirely confidential. Any agreement reached is binding in the form of a contractual agreement between the parties.
What is the role of the Mediator?
The Mediator is a neutral third party who will assist the parties to work towards negotiating a settlement to their dispute. They are responsible for developing effective communications between the parties. Mediators cannot give advice in relation to the claims made. Anything discussed with the Mediator is confidential and will not be shared with anyone else present unless they are given authority to do so.
Why use mediation?
Statistically, most mediations result in settlement.
Mediation provides a more informal setting to the court
room and offers a forum for the parties involved in a dispute to work together to gain an understanding of each other's position. Mediation can help identify points of agreement and narrow the main points of dispute. If a resolution is not agreed, the mediation can be used as a starting point for further settlement talks.
There are many advantages to mediation:
- It is much cheaper than going to court
- It is an informal and non-adversarial process and is ideally suited to cases where there are difficult emotive issues which are better resolved by discussion and negotiations
- It allows flexible and pragmatic agreements to be reached which may not have been available at court
- Clients actively participate and drive the mediation process and can control the outcome
- It is a quick process most cases are resolved on the day
- It is low risk even if the parties do not settle on the day, the matter can still go to trial and/or settlement talks can continue. Going forward, the parties will have the benefit of understanding the other side's case more clearly and hopefully will have narrowed the issues in dispute
- The whole process is entirely confidential. Details about what went on at the mediation cannot be referred to
- outside of the mediation, even at a court hearing
- The agreements reached are entirely confidential. This is of particular importance to charities
What actually happens at a mediation?
- Mediations usually start at 9 or 10am and last for the whole day.
- Parties will attend the mediation with their legal representative who will advise them during the course of the day.
- Each party will be based with their legal representative in separate rooms so they can discuss settlement options privately.
- A typical mediation will usually start with the Mediator meeting each party in their own rooms to explain their role, the basic `rules' of the mediation and how they envisage the day proceeding.
- The Mediator will offer a meeting where all the parties are present and they all have the opportunity to briefly explain their positions to each other. This joint meeting is not mandatory and often parties ask not to have such a meeting as emotions are too raw.
- Over the course of the day, the Mediator will go between each room to get a good understanding of the parties' positions, the main dynamics of the case and to try to narrow the points of dispute. Ultimately they will encourage negotiation. Sometimes the Mediator will help to formulate an offer which is put to the opposing party with the intention of reaching an agreement.
- The process will continue until either a settlement is reached or one or all of the parties withdraw from the mediation.
- If a settlement is reached, a binding agreement will be drawn up by the legal representatives and will be signed by the parties before they leave.
How much does mediation cost?
The cost of a mediation varies widely, but the costs will usually consist of the following:
1. The venue: the cost of a venue will depend on the venue itself, the location, the duration of the mediation and the number of parties in the claim. As a rough estimate, you should account for between 300 600
for the day which would be shared equally between the parties. Sometimes the parties will agree to attend the mediation at one of the legal representatives' offices to keep costs down.
2. The Mediator: the Mediator's charges will vary depending on their experience, expertise, location etc. As with the venue, the mediator's charges are usually shared equally between the parties. As a rough estimate, Mediators usually charge between 1,500 3,000 plus vat per party.
3. Your legal representative's costs: your solicitor will have to charge for their time preparing for and attending the mediation, usually at their standard hourly rates. Bear in mind that mediations will often start at 9am and finish at 5pm but can often go on much later. We can sometime agree to fixed fees or enter into some other form of flexible funding arrangement with our clients to assist them with funding their mediation.
4. A barrister: sometimes it is advisable to have a barrister at the mediation which would increase the costs. Again their costs will vary significantly depending on seniority, location, expertise, etc.
A day's mediation is not cheap. However the costs are substantially less than the case going to trial and the benefits far outweigh the initial outlay.
Is mediation compulsory?
No. It is entirely optional. Neither the other party nor the court can force you to mediate and not every case will be suitable for mediation. However, if you `unreasonably' refuse to mediate, you are likely to later be criticised by the Judge who might order that you pay the other side's costs of the case. To refuse mediation is therefore a very risky decision and it should never be rejected out of hand.
Practically speaking, there are few situations where it would be appropriate to refuse mediation, but it might be that the proposed timing is not quite right, for example, where you might need more information or documentation.