Why mediation?
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Why mediation?
The traditional way of resolving civil disputes in England is for the parties to ask someone to whom the State gives that responsibility, to make a decision in their dispute and (subject to the question of an appeal), both parties effectively “live or die” by that decision. In the way in which the Court system has evolved , the loser is generally asked to pay the cost of the whole referral.
In the 1970s solicitors’ costs per hour were generally £25 to £30. Now an hourly rate of £300 per hour is routine and some practitioners in large centres such as the City of London are charging £500 to £700 plus per hour. Almost always litigants do not get back the whole of the legal costs they invest in the process even if they win, and many disputes in the courts ensure financial ruin for the loser. An average County Court case can cost at least £50,000 per side to trial with the loser paying all, together with the amount of the Judgment Ordered.
Against this background, Mediation has grown in the last 10 to 15 years as a method of trying to resolve cases on a sensible commercial basis, but leaving control of the negotiation with the parties themselves. The system has the active encouragement of the Courts against the sober background set out above.
The parties arrange to meet with a trusted intermediary (the Mediator) who explores with the parties any common ground that they have, or any solutions that they might want to discuss or he can suggest to them. In circumstances where the result of a dispute in the Courts is likely to be “all or nothing”, then Mediation is a useful step. Even if a solution is not found on the Mediation day, it is a useful exercise for both parties to understand their opponent’s point of view or to gather information about the case that they were previously unaware of. Many cases result in a settlement after the date of Mediation when the parties have again considered their positions and refined their own or their opponent’s chances of success.
The parties to a Mediation always meet without prejudice so that no-one can repeat any of the arguments or concessions that might have been made at Mediation if the case continues. The parties will however take away in their memory all that was said on the day .
The Mediator will not take evidence, make judgements or even comment on the parties’ cases unless the parties ask them to do so. The Mediator will however ask questions to obtain information and help the parties put their own cases in proper perspective. The eventual decision as to whether to settle and on what terms will be the parties responsibility not that of the Mediator.
Above all the Mediator will help the parties to explore solutions to their dispute which might involve remedies or arrangements (say for example as to a variation of a contractual arrangement against the background of an allegation of breach of contract) which the Court themselves might not be able to do. Most of all he will help the parties to concentrate on the realities of the costs of their dispute going to Trial and try to steer them away from the costs consequences of that eventuality.
We are not quite at the stage where Mediation is compulsory before entering or finishing litigation (as it is already in some family disputes) but we are not far off that point. Mediation has been shown to have a high rate of success and is always a fraction of the cost of going to trial.
In my next blog I will comment on the question of risk assessment in commercial litigation which is a consistent feature of all Mediations.
To find out more about the Mediation service we offer please click here.
If you have queries about Mediation please contact me.