Alternative dispute resolution (ADR), is all but mandatory for parties involved in a commercial dispute. Cost penalties can be imposed by the Court on those who refuse to participate. Taking early advice on the issue is key.
What is mediation?
Mediation involves a third-party mediator, often a barrister (but not always), helping parties to a dispute identify common ground and reach a binding compromise. Mediation often takes place at a neutral location. It is a without prejudice process which effectively means that the things said and done in those discussions are entirely off the record and cannot be referred to in the event a dispute continues to Court.
Mediations are effective in resolving disputes and, in our experience, the success rate is very high. There are, however, two downsides to mediation. Firstly, any mediation requires both parties to compromise. Accordingly, you will never walk away from mediation with absolutely everything you want to achieve from the claim. Secondly, mediations come at a cost and can cost each party upwards of £5,000 for a full day’s mediation. Those costs can increase if barristers and experts are also involved.
When we are advising clients with a dispute, we will help with:
- Selecting a suitable mediator with relevant experience;
- Briefing the mediator on the background and legal context;
- Preparing a mediation bundle and position statement; and
- Supporting you throughout the process to secure a favourable and enforceable settlement.
We have an abundance of experience representing clients in mediation. For information about how we recently secured settlements in four recent cases, not just by mediation, click here.
What about using a mediator instead of using a solicitor?
What clients often need is a ‘true’ mediation – where the mediator is not only legally trained but also experienced in dispute resolution and capable of understanding the legal and commercial context of the issues at hand.
Sometimes we speak with parties at the enquiry stage who are considering engaging in a non-traditional mediation meeting at an early stage. This is often informal and without legal structure. When this arises, we explain the risks and how our approach differs:
- We prioritise clear, cordial, yet robust correspondence which can lead to more productive negotiations. This approach helps to anchor your legal position and signals to the other party that you are serious about protecting your position and resolving the matter.
- If the other party in the dispute never receives a formal letter of claim setting out the legal basis of your position, they may not perceive a credible risk of litigation or you defending the claim. Without that pressure, they may have little incentive to engage meaningfully or make concessions.
- In a non-traditional mediation meeting no binding agreement is typically reached. The other party could walk away at any time and later renege on any verbal commitments. You would have incurred the cost of the meeting but this may ultimately result in no enforceable outcome.
- Key legal drafting may be overlooked. While parties might agree on payment terms or the transfer of intellectual property, for example, without precise drafting critical issues such as ensuring there is a valid assignment of intellectual property prepared to execute the transfer could potentially lead to further disputes. Alternatively, no consideration is given to what happens if a party doesn’t adhere to the terms of the agreement.
- There is a risk that the other party may not respect the ‘without prejudice’ nature of the discussions because of the informality. This could compromise your legal position if the matter escalates.
- Although you are paying for the mediator’s time, they are not acting for you. You must therefore be cautious about what you disclose which is something we would handle if we were instructed to assist with a ‘true’ mediation.
Getting it right from the start
If you are considering pursuing a claim against another party, or you are on the receiving end of one, you may not know where to turn or what to do next. As your solicitor, we will guide you through the litigation process, from start to finish, and help you achieve a resolution that’s right for you.
If you instruct us, we will discuss your objectives, and the pre-action rules that govern the steps before a party issues a claim and create a strategy together. In modern times, disputes rarely make it to Court, not least because of the cost, and we regularly help clients resolve complex issues without recourse to proceedings.
Why choose Tozers?
Drawing on relevant legal skills in negotiation, and problem-solving and a deep understanding of our client’s specialist industries, we have supported clients to reach practical, cost-effective outcomes. We don’t just handle disputes – we manage them. A leading firm for client satisfaction, we will coordinate every step of the process with strategic oversight and clear action steps.
If you’re involved with a dispute, or think that you may be soon, you can speak with a lawyer in a non-chargeable preliminary call.
