Mediation FAQs
Please find below a list of frequently asked questions often
raised regarding mediation.
Please click on the question to find the answer below.
When is the right time to mediate?
Will mediation work?
But the case will go to Court anyway...
Going to Court is more likely to get the required result
There are other factors to consider that may hinder the
mediation process
How does mediation work?
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Answers
When is the right time to mediate?
- I think that the other party will
interpret my willingness to engage in the mediation as a sign of
weakness. My lawyer would rather we wait until we've got a few
victories under our belts and are in a stronger position.
This is not an uncommon view for people who haven't used
mediation before but, actually, often the opposite is true: to be
willing to engage openly and honestly about the issues shows great
courage, not to say conviction in the merits of one's case. Such
views are considered by many to be outdated as a result of the
emphasis that has been placed upon mediation and other forms of ADR
by both judges and the CPR over the past 10 or so years.
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- This is all about money. The
problem is that neither of us knows how much money there is, and
how much each of us is entitled to receive, as we don't know the
size of the profits made by the business. There's no point in us
having a mediation until an independent accountant, who can be
trusted by both of us, has carried out a proper 'audit' and worked
out what the value of these profits are, and then what each share
is.
Has your client agreed a mechanism for resolving these valuation
issues, or is that one of the issues in dispute? And have they
agreed how to take things forward once the accounts have been
finalised?
Your client could think about mediating these preliminary issues
now, and perhaps agreeing a process for resolving the distributive
issues in due course, so that everyone is committed to the same
course, and they can all move forward on a timely basis.
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Will mediation work?
- I would like to find a resolution
to this difficult dispute, which is causing a great deal of pain to
the family. The problem is that the relationship of trust and
confidence between us has completely broken down. I just don't have
any faith in the other party's bona fides, and I think that
mediation will be a waste of time. I want my day in Court.
Any statements your client gives will inevitably focus on the
evidence necessary to make their legal case, which may not actually
be what is most important to your client. And in Court, all they
can do is answer the questions put to them by counsel. Even your
client's counsel's cross-examination of the other side's witnesses
will have that focus.
Alternatively, in a mediation, your client will have the
opportunity to tell their own story, in their own words, and their
own time, and they can be assured that whatever the other party
says will be tested as rigorously as what they themselves say.
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- This isn't about money, it's
about principles. I'm a trader. My word is my bond. I have never
compromised my principles, and I don't intend to start now. I see
any mediated solution as a compromise.
Mediation is not about the compromising of principles. Traders
are often successful because they make good trading decisions,
weighing all the options and looking at the pros and cons of each
before they make a decision. Many people find that when they take
the same approach to a dispute - which is what happens in mediation
- there's a "trade" to be done that is better for everyone than the
alternative of protracted litigation.
Bear in mind also that there may be solutions to the dispute
that no Court could order, but which the parties could agree
between themselves. This is one of the particular advantages of
mediation.
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- We have tried talking for years
and got nowhere. There is no alternative but to take this all the
way. It's the only way to get the other party to take me
seriously.
Your client's frustration is understandable. Most lawyers say
the same, yet over 80% of mediations settle.
There are many reasons why unaided bilateral negotiations may
fail, yet a mediation may succeed. A large part of the mediator's
role is to bridge the communications gaps that open up in bilateral
negotiations, whether they flow from:
- the lack of trust that follows the breakdown of the parties'
relationship, or
- the fact that when we are arguing we tend to focus much more on
getting our own side across - often to the exclusion of making any
effort to understand what the other side is actually saying,
or
- the fact that people are wired up differently and sometimes
just cannot achieve effective communication without help.
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But the case will go to Court anyway...
- There is a real question about
the scope of the beneficiary class and other terms of the trust,
and the only way they can be resolved is by a Judge. What is the
point of a mediated settlement, if we will have to go to Court
anyway?
It is often true that if there is a construction issue,
particularly one that impacts other parties, that really has to be
dealt with by a judge.
Having said that, it may be that a mediation might flush out a
solution that avoided the need to take the construction point.
Perhaps all parties could agree to some form of appointment that
protected all beneficial interests.
Even if this isn't the case, it might narrow down the
construction issue that does need to be put to the Court, and allow
it to be put on a much more consensual basis, which could save a
lot of time and aggravation.
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- Won't any settlement agreement
have to be approved by a Court? How mechanically is this going to
be done? Who is going to have responsibility for making the
application to the Court? The mediator?
It is true that, given the involvement of minors and unborns,
any settlement would need to be approved by the Court (see
accompanying guidance). It may also be the case that the trustees
too feel the need to seek the blessing of the Court in any event
and will only agree to settle conditional subject to the Court's
approval.
Any settlement agreement will be conditional upon approval (and
can provide for what happens next if approval is not given). It
will set out who has to do what, and all parties will commit to
supporting the settlement.
Ideally, the Counsel who will have to write an opinion for the
Court should be at the mediation and commit to writing an
appropriately positive opinion. If time permits that opinion could
be produced before the mediation agreement is signed, and appended
to it. Or there could be a holding agreement pending its
production.
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Going to Court is more likely to get the required result
- I think the other side has a weak
case. As far as I'm concerned, the court will completely vindicate
what I've done. They are just using the mediation as an information
gathering exercise to try to find something to use against me.
Mediation is conducted on a "without prejudice" basis, so any
information disclosed in the mediation cannot be used in evidence,
although it can be said that it might provide the other party with
intelligence - and even inform how they might approach the
litigation if the mediation should fail.
But if their case is weak, your client may benefit from putting
their case to them without it being filtered through their lawyers,
and where a neutral third party can make sure they really
understand the merits of their own case (as well as of your
clients).
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- I am willing to mediate. However,
I need to understand the other side's case. But I know them. The
only way to make them realise the weakness of their position is for
them to be made to provide a witness statement and for this to be
put to the test in cross examination. They will hate this and will
realise that what they did was quite wrong and that they ought to
settle on reasonable terms.
Your client's need to understand the other party's case is quite
understandable. No case should settle until all parties properly
understand the other parties' position.
However, experience dictates that whilst cross-examination may
show up holes in the evidence, and even paint the witness in a bad
light, it rarely persuades them that they're wrong - just
misunderstood!
On the other hand, the reality testing process that goes on in
mediation can be profoundly powerful, partly because there are no
rules of evidence; partly because it takes place in private; and
partly because it's done by someone the party trusts, the
mediator.
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- The other party has always been overbearing and, at times,
bullying. I've had enough of it. I want to teach them a lesson. I
want to get my own back for everything they've done to me over the
last 30 years.
Your client is clearly very angry about the way the other party
has behaved. However, litigating would not necessarily help. It is
more likely that both parties would suffer. Look at press reports
on the effects that hard fought litigation can have on
families.
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- This family is extremely rich;
worth hundreds of millions of pounds. Therefore the usual
cost/benefit comparisons that you might make don't apply. We won't
be troubled by spending £10 million litigating this case for the
next 5 years. It's just a 'drop in the ocean'.
In terms of the direct costs of litigation, that may well be so,
but your client may stand to lose a great deal of money if that
goes on for another 5 years. Their health and personal lives may
also suffer.
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There are other factors to consider that may hinder the
mediation process
- One of my concerns is that the proceedings affect a large
number of family members. How can we ensure that unascertained
beneficiaries are properly catered for in the mediation? At the
moment there is just a charity beneficiary in one of the Trusts and
the intention was to add other beneficiaries in due course and
remove the Charity. It was never intended that the Charity should
derive economic benefit from the Trust. Do they all have to be
involved in the mediation?
All of these issues will also be present in litigation.
Therefore, your client will have to deal with them whether they
mediate or not.
So far as the minors and unborns are concerned, if their
interests class are not interests that can be represented by an
adult member of the class, it may be advisable if their putative
litigation friends joined in without formal representation orders.
That has certainly worked successfully in cases in the past.
It may be that your client needs to get appropriate
representation orders before the mediation can begin in earnest.
Such a move is often misunderstood, and can put back the chances of
a negotiated settlement. If there is a risk of that, your client
could consider having that dialogue itself mediated, i.e. have the
mediator negotiate buy-in to a mediation process, the first step in
which is the seeking of representation orders in agreed terms.
As to when parties get involved, if the major issues are between
your client and X, it may be more appropriate to deal with them
first, and then have the two of them collaborate to secure buy-in
from all the other parties.
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- I have been appointed Litigation
Friend to represent my three children in the claim before the Court
and would want to continue representing them. The other side says
that I face a conflict between my personal interests and my duties
to his children as their Litigation Friend on the other. What is
the general opinion?
There are a number of potential conflicts of interest here that
would need to be investigated, and it may be that various parties
will ultimately need separate representation.
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- This is all very private and confidential. It's a family
matter. There are a number of reasons why the Court has made orders
sealing the Court file and making the proceedings private and
confidential. None of us are keen on this being discussed outside
the family and we are therefore not comfortable involving a
mediator, as we can't be sure that they won't divulge our family
secrets to third parties. What are a mediator's confidentiality
obligations in this sort of situation?
The need for confidentiality is understandable. The mediator
will be bound by whatever confidentiality provisions the parties
choose to put in the mediation agreement.
If the parties wish to keep even the existence of their dispute
and the fact of the mediation confidential, they are free to do
that, and the mediator must abide by their wishes.
In any event, the mediator will treat everything produced, or
said, to them as confidential to those in the room at the time.
They can also be required to destroy, or to return to the parties,
all copies of any papers provided for the purpose of the
mediation.
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- I live in London most of the year
as does the other main family party. The trustees are in Cayman.
Where is the mediation going to take place? What rules and
procedures will govern it?
One of the beauties of mediation is that there are no set rules.
It is for the parties and the mediator to agree where it should
take place (if, indeed, it needs to be in one place - sometimes a
mediator shuttles between parties in remote locations) and what the
process should be.
In this case, it would be advisable for the mediator to spend
time with each of the parties beforehand, and preferably in a
location in which each of them feels at ease. The mediator would
then have a better sense of what is likely to be most productive.
Both parties may benefit from a joint session in which each put
their case in their own words to the other party. Some ground rules
would need to be agreed for that of course.
After that, the mediator may want to spend some time alone with
each party to consider whether to get everybody back together again
or to shuttle between them, or perhaps to suggest that the mediator
prepares some heads of settlement for each to react to.
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- The Trustees are concerned that
they have very limited powers and don't have the power to pay the
costs of a mediation from the trust fund. If they can't use trust
funds to pay costs then they cannot participate. They are also
unsure whether they would even have the power to enter into a
settlement agreement.
These are questions on which the trustees must take their own
advice. However, experience shows that advisers seem to take the
view that for English law trustees the power to compromise in
section15 of the Trustee Act 1925 is broad enough to allow the
trustees to enter into both a mediation agreement and a settlement
agreement, although if the settlement is of fundamental importance
they may wish to do so conditionally upon the Court blessing the
settlement. Provided all parties understand that is their position
at the outset, that should not get in the way of the mediation
taking place.
Of course, if the trustees are subject to an attack on their
conduct as trustee, that would be different, as it would also be in
litigation. Generally there is no issue over the scope of the
trustees’ powers, as the trustees face personal liability for
breach of trust.
Who ultimately bears the costs will be part of any settlement,
so the question is really one of upfront funding (i.e. cash flow),
and the risk to those providing the funding if the case doesn't
settle. Again, it must be for the trustees and their advisers to
decide whether they need to make a Beddoe application but, given
the Court's promotion of ADR, most advisers seem to feel
comfortable that incurring the cost of mediation to avoid
litigation is a reasonable course of action.
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How does mediation work?
- What sort of mediators would you
recommend and what are their fee arrangements? Can we agree that
the mediator should get no fee if the mediation doesn't
succeed?
Mediation purists would say that a mediator does not need to
know the law involved with the dispute, and it is often true a good
mediator who knows nothing about trusts is better than a bad one
who is an expert in trusts. Ideally though, someone with both skill
sets, who knows what sort of arrangements a Court might approve,
would be preferable.
People who think they have a strong legal case often favour
someone with a so-called "interventionist" style, who will "tell
the other side they are wrong"! In fact, a good mediator will test
the strength of all the parties' positions, albeit in private
session with each of them.
As to the costs, it is unlikely that a mediator will agree to a
conditional fee. Were they to do so, they would have a vested
interested in your client doing any deal to settle, when their
concern should be simply that your client makes a fully informed
decision as to whether the best deal on the table at the mediation
is better for them (and the other parties) than the alternative of
protracted litigation.
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- Does the putative protector need to be involved in the
mediation? If they do need to be involved, what is the extent of
their involvement? Bear in mind that they are elderly.
The putative protector may need to be joined, particularly if
their consent is needed for any action agreed to be taken by the
trustees, or if they might have a fiduciary duty to object to a
deal if they thought it inappropriate. But this could also be the
case if your client litigates.
Their age is clearly a factor in a number of decisions (venue,
format etc), but judgment should be reserved on how best to address
that until after the mediator has spoken with them and understood
what their wants and needs are in all this.
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- Who should participate in the mediation? I have a huge team of
lawyers in a number of jurisdictions. The other side has a large
team too. Do you think they should all attend?
All parties should be encouraged to assemble a small, cohesive,
and persuasive mediation team, and to remember that this is
diplomacy, not warfare!
If your client decides that they want to put their case directly
to the other party, without their lawyers summarising and
paraphrasing all they have said, they should bring a good advocate.
But remember this isn't a trial, and that he is trying to persuade
the other party, not his lawyers, and certainly not the
mediator.
And your client should have a good problem solving negotiator
with them. They should have done all their litigation risk analysis
before they get there, so whether they need counsel there to
revisit the merits needs to be decided.
There is no reason why others that your client might need
shouldn't be close by, or at the end of the phone. Here again, if
all parties actively engage the mediator at an early enough stage,
the mediator can contribute to that discussion. Above all, your
client should have people who are committed to trying to solve the
problem if there is a solution there to be had, but who are not so
frightened of the alternative that they won't walk away from a bad
deal.
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