Avoiding common mistakes in mediation
While mediation is recognised and recommended as a quick and cost-effective means of resolving a dispute by ‘alternative’ means to litigation (and thus falling under the umbrella of ‘alternative dispute resolution’ (ADR) methods set out in paragraph 10 of the Practice Direction – Pre-Action Conduct and Protocols (PDPACP) of the Civil Procedure Rules (CPR)), some parties continue to approach mediation as no more than a tick-box exercise en route to the “real battle” in court and without a real understanding of how to get the best out of the process and to ensure a successful outcome.
Mistake 1 – Mediation is an opportunity to show the other side what a strong case we’ve got
Sometimes parties approach mediation wearing their litigation hats and with the same degree of combativeness and adversariality as they would in court. Such an approach often results either in failure and frustration, or at best, in settlements that could have been more satisfactory to the parties had a more constructive and conciliatory approach been adopted during discussions on the day of the mediation.
Mediation is a confidential and non-binding process (up until a legally binding settlement agreement is signed at the end of it if settlement is reached), and this allows parties to show goodwill and extend an olive branch without compromising their legal position(s). For example, one seldom hears an opponent concede that their case may have certain weaknesses or that the other side’s case may have certain strengths, and that it would be in the best interests of all involved to seek to come to a mutually beneficial and agreeable settlement. There is nothing lost by saying out loud what everyone in the room already knows – that every case has its strengths and weaknesses (without the need to necessarily specify what those strengths and weaknesses might be).
Tip: To the extent possible, and for the purposes of the mediation, move away from the legal arguments in the case and focus on the commercial aspects and common ground between the parties, and what risks they face if the matter was to proceed to trial. This will help clarify each party’s mind as to what it can and can’t live with by way of settlement, rather than how strong they think their respective legal cases are.
Mistake 2 – The mediator must see that we are in the right
As part of the litigation mindset, parties often make the mistake of approaching the mediator as they would a judge and devote significant energy towards attempting to convince the mediator of their position. This is futile, since the mediator’s role is to facilitate a discussion while at all times remaining neutral. Mediators cannot decide matters, and neither is it their place of offer advice or direct the parties to do one thing or another.
Most commercial disputes involve sums of money (albeit not always exclusively), and when the parties mediate, it is a golden opportunity for them to talk to each other directly. Yet, very rarely does one see legal advisers in the open sessions talk directly to the client on the other side directly or look at them while addressing the room. The fact of the matter is that there are usually one or two people on either side of the table who have the power to offer/agree a settlement – and it isn’t the lawyers or the mediator.
Tip: Prepare your arguments for the day with a view to addressing and convincing the principal decision maker(s) on the other side, not the opposing lawyers or the mediator. One of the principals has to write out a cheque, and the other principal has to be willing to accept it – those are the only people that matter for the purposes of the mediation. Identify them, convince them.
Mistake 3 – Failing to prepare, preparing to fail
Another common mistake that causes mediations to be unsuccessful is the parties’ failure to prepare properly for the day, and leave matters solely in the hands of their legal advisers (as they would do for a trial or an application). While it is important for the legal teams to make their preparations in advance of the mediation and draft the position papers etc., it is equally important for the clients on each side to assess the commercial aspects of the case and be clear in advance of the mediation where their red lines are on any offers likely to be tabled.
On a related note, if the client is a corporate entity, it is vital to ensure that the person attending the mediation is authorised to agree to a settlement on the day on behalf of that entity and that the requisite board resolutions and the like are in place in advance. If there are limits on the person’s authority in terms of the amount they are able to offer or accept, this should be made clear (at least to the mediator in private session) at the earliest practical opportunity.
Tip: Trust and goodwill are generally in short supply by the time parties turn up to mediation, so any procedural or administrative spanners in the works when it comes to a party being able to offer or accept a settlement do not go down well – try and anticipate the possibilities in advance and turn up prepared to deal with them.
Manan Singh is an experienced Barrister and Mediator certified by the Society of Mediators (London).