Mediation Process [Continued]

AN INTRODUCTION TO MEDIATION – GETTING IT OVER THE LINE

Picking up from where we left off last time, the parties have agreed to enter willingly into the process and a mediator has been appointed or agreed, this short overview will look at the process on the day and dealing with settlement.

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WHAT HAPPENS ON THE DAY?

Before the mediation

Once the parties have agreed to mediate they will enter into a mediation agreement which sets out the minimum procedural framework for the process, including: when, where, who attends (with authority to settle), confidentiality and costs.

The parties will usually exchange short position papers 7-14 days before the mediation, setting out their cases. It is also usual for the parties to agree a core bundle of documents for use at the mediation.

The mediator will generally wish to speak to the parties (or at least their advisers) before the mediation day. The purpose of the discussion will be to ensure that the mediator has a sufficient understanding of the case and the main points of contention that need to be resolved.

At the mediation

Mediations may last anything from a few hours to several days in complex multiparty disputes. Most commercial mediations last one or two days. The process is entirely flexible.

It is normal for each of the parties to have a private room for confidential consultations on their own and with the mediator during the mediation. There should also be a further room large enough for all parties to meet with the mediator jointly.

The mediator will chair and take responsibility for determining the procedure at the mediation, in consultation with the parties.

The likely procedure will comprise:

  • preliminary meetings with each of the parties when they arrive at the venue;
  • a joint meeting of all attending the mediation, at which each of the parties will normally be invited to make an oral presentation;
  • a mix of further private meetings and joint meetings (which may involve all or some of each party’s team), as proposed by the mediator and agreed by the parties.

Professional advisers, particularly lawyers, can and usually do attend the mediation. Such advisers play an important role on a number of fronts, including: in the exchange of information and opinion on fact, evidence and law; in supporting their clients (particularly individuals) in the negotiations; in advising clients on the implications of settlement; and in drawing up the settlement agreement and any consent order. Formal courtroom advocacy is rarely effective – this is an occasion for commercial reality and business negotiation.

No verbatim recording or transcript should be made of the mediation by the parties or the mediator in any form, and any such notes should be destroyed at the conclusion of the process and may not be disclosed or relied upon in any subsequent action.

Mediations can last beyond a normal working day and it is important that the key people attending for each of the parties remain present or, at worst, available by telephone for so long as the mediation continues. Any time constraints should be reported to the mediator as soon as known, as any unexpected departure can be detrimental to the progress of the mediation and perceived as disrespectful by other parties.

PRIVATE MEETINGS (OR CAUCUSES)

The mediator will often conduct a series of private meetings (sometimes called caucuses) with each party, seeking to learn more about each party’s expectations and to test the parties as to the strengths and weaknesses of their case. It is critical to note that nothing said in these meetings is passed to the other party without specific authority for the mediator to do this.

It is likely that the mediator’s first private session(s) with each party will be ‘exploratory’ in nature, seeking to get a better understanding of the issues that separate the parties and their underlying interests (commercial, reputational, emotional, etc).

In the course of the day the mediator will facilitate discussions between the parties but may be more proactive if the circumstances are correct. The mediator may focus on the key decision makers and encourage the parties to move towards making offers and counter-offers, the approach will be informed by what has been learned during the day and, depending on the case, there may be scope to explore non-monetary traded solutions as well as a financial restitution.

CONFIDENTIALITY IN RELATION TO THE MEDIATION

The standard mediation agreement provides that what happens at the mediation is to be treated as confidential by the parties and the mediator, including the facts and terms of settlement.

SETTLEMENT

If a settlement is reached, the lawyers present will draw up a settlement agreement. If no lawyers are present, the mediator generally helps with the drafting.

The agreement only becomes a binding document once it is signed by all the parties.

NO SETTLEMENT

If no binding settlement is achieved, the parties retain the ability to pursue their rights either through litigation or arbitration as appropriate.

However, the mediator may be asked to reconvene a further meeting at a later date, as settlement can be achieved in the following weeks or even months.

THIS OVERVIEW IS PROVIDED AS A SIMPLE GUIDE AND EACH INDIVIDUAL MEDIATION MAY ADOPT A NUMBER OF VARIABLES TO ASSIST THE PARTIES IN ACHIEVING SETTLEMENT. THE BENEFIT OF MEDIATION IS THE LACK OF RIGIDITY.

IF YOU HAVE ANY QUERIES ON ADVANCING YOUR DISPUTE TO SETTLEMENT THROUGH MEDIATION PLEASE CONTACT OUR OFFICES DIRECTLY.

Mediation Process

AN INTRODUCTION TO MEDIATION

Elemental regularly act as advisors when contractual disputes arise and the clients want to find a cost effective way in getting to its money. There are many options available: adjudication; arbitration; or litigation. However, where the circumstances allow it is often best to consider mediation. This process allows the parties to retain control of the outcome and find a settlement that suits its business and maintain a business relationship with the other party.

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I am going to briefly set out this procedure for those not familiar with mediation and look at the benefits of the resolution process.

WHAT IT IS AND HOW IT WORKS

This guide provides a useful introduction to the operations during a mediation, by far the most commonly used ADR process. It will outline the mediation procedures common to commercial referrals and the approach to the process by those required to participate in it.

WHAT IS MEDIATION?

Mediation is a confidential process in which an independent and neutral third party (the mediator) is appointed by the parties to help them reach a negotiated settlement of their dispute, principally through structured settlement discussions. The process can be conducted before the commencement of formal legal or arbitration proceedings or alongside such proceedings.

The mediator does not act as a judge and has no power to make binding decisions. Rather, he or she will explore options for settlement with the parties and attempt to broker a deal between them.

The key goal of mediation is to reach a settlement that brings the dispute to an end on terms that are acceptable to both parties – not to determine the parties’ legal rights or arrive at the ‘correct‘ legal position.

WHAT ARE THE MAIN ADVANTAGES COMPARED TO LITIGATION OR ARBITRATION?

The most obvious benefits are:

  • speed – most mediations last one day and can be set up within weeks
  • flexibility and informality – the extent to which lawyers are involved (if at all) is largely subject to the will and confidence of the parties. In fact, it is often the case that the more direct communication between the clients at the mediation, the more effective the mediation
  • cost savings resulting from the above – in both legal expenses and management time
  • confidentiality – anything said or done or any documents created for the purpose of the mediation are ‘Without prejudice. and, except in very limited circumstances, cannot be relied upon in subsequent litigation or arbitration
  • better chances of preserving business relationships due to the conciliatory mature of the process
  • the range of potential outcomes – mediation can result in any terms that suit the parties, unlike court orders which are limited to particular legal remedies

WHAT IS THE MEDIATOR’S ROLE?

The mediator controls the process and encourages open and honest communication between the parties. However, he or she has no power to make an order for the production of documents or to make a final determination. As such the parties remain in charge of the outcome and they must reach an agreement themselves and sign a written settlement agreement in order to be bound. Until such agreement is reached the parties are free to walk from the mediation.

The style of mediators can vary from pure ‘facilitators’ (who assist the parties in their negotiations) to ‘evaluators’ (who encourage settlement by expressing views on the merits and likely outcomes).

AT WHAT STAGE IN A DISPUTE CAN YOU USE MEDIATION?

In very simple terms, if you feel in a position to negotiate a dispute then you can mediate it. The ‘right’ time to mediate will depend on the circumstances of the case – and getting the timing right requires careful judgment.

The key is having sufficient information to make sensible decisions about possible settlement options. In many cases, this will be after the exchange of initial correspondence and documents about the dispute. For some larger cases, it may tactically be better to hold off until there has been more substantial disclosure of documents.

Generally speaking, the earlier you mediate, the greater the likely savings in legal costs and management time.

HOW IS A MEDIATOR APPOINTED?

If a proposal to mediate is accepted, the parties must then agree the appointment of a neutral to act as a mediator.

In most jurisdictions this can be done either:

  • through an ADR/mediation service provider, more information on these appointment services can be found on websites such as www.PrimeDispute.com; www.theMII.ie; www.CEDR.com ; or
  • through the parties agreeing to appoint and instruct an independent mediator, you can contact the offices of Elemental to discuss the availability of Jarlath Kearney, a Certified Mediator, to act in such a role, or contact him directly at JPK@ElementalConsultants.com.

Mediator fees vary but in large commercial disputes mediation costs are usually insignificant compared to the parties’ other costs and the sums in dispute.

In our next blog we will look at the process on the day and the pursuit of settlement.

For advice on this procedure or any contractual issue please contact our offices for a free initial consultation.

THIS OVERVIEW IS PROVIDED AS A SIMPLE GUIDE AND EACH INDIVIDUAL MEDIATION MAY ADOPT A NUMBER OF VARIABLES TO ASSIST THE PARTIES IN ACHIEVING SETTLEMENT. THE BENEFIT OF MEDIATION IS THE LACK OF RIGIDITY.

IF YOU HAVE ANY QUERIES ON ADVANCING YOUR DISPUTE TO SETTLEMENT THROUGH MEDIATION PLEASE CONTACT OUR OFFICES DIRECTLY.

+44 (0) 28 9043 4884

JPK@ElementalConsultants.com