Guide to Mediation

4th January, 2024

There is an increasing move in modern litigation for the courts to encourage parties to explore alternative dispute resolution (ADR) where possible, in order to deal with cases outside of the court system. This is in keeping with the Overriding Objective set out in CPR 1.

The most common form of ‘ADR’ is probably mediation. But what is it, and should you engage in it?

What is mediation?

Whilst there are very few set rules to a mediation, it is a process in which the parties to a dispute get together (either in person or virtually) with a neutral third party (the mediator), who directs the discussions in an attempt to reach settlement or narrow the issues in dispute. It is conducted on a without prejudice basis, which means matters discussed cannot be referred to in proceedings.

How does mediation work?

Traditionally, mediation takes place in a venue large enough to accommodate both parties, their solicitors (if parties are not representing themselves) and the mediator. Each party will require their own room, with the mediator also having a room they can go to. However, mediation is increasingly carried out ‘virtually’ via Zoom or Teams, with the use of ‘breakout rooms’.

The mediator will talk to one party in their room, and then go and talk to the other, and so on, shuttling between the parties and seeking to guide the discussions towards settlement.

Part of the benefit of mediation is that there are no set rules, and the process can be tailored to the participants, their requirements, and the characters involved. For example, if there is extreme animosity, the parties may want to avoid any ‘face to face’ interaction. However, for commercial disputes between businesses, some ‘director to director’ discussions can help unlock things.

With this in mind, there is no set format to be followed. However, mediations may include:

An agreed bundle of documents. In advance of the mediation parties will agree a bundle of key documents that the mediator will read, and that can be referred to as the session progresses.
Position statements. A statement prepared on a without prejudice basis that sets out the parties views on the claim, their settlement offers, and intentions for the mediation.
An opening meeting. This is a session in which all parties gather together to introduce themselves, and their objectives for the day.
Opening Statements. At a joint meeting the parties (usually solicitors) may give a short statement on behalf of their client, setting out what they are hoping to achieve that day. These can be a good opportunity to speak directly to your opponent, and to make your most powerful (or emotive) points.
Private Sessions. The mediator will then visit each party in turn, spending time discussing their case, and seeking to discover if settlement is possible. During these sessions, the mediator may look to challenge the parties’ cases, drawing their attention to the issues they may need to overcome. Everything said in these sessions is confidential, and will not be conveyed to the other side unless the mediator is explicitly authorised to do so.
Settlement. If discussions are productive, and common ground can be found, then a settlement may be reached. If so, this will usually be recorded in a formal settlement agreement. It is good practice for parties to have a draft of the likely terms prepared before the mediation, so that any deal can be concluded swiftly.

What is the role of the mediator?

The mediator assists and guides the parties towards a workable solution, and will not decide the outcome for the parties. The mediator is in control of the day and they have various ways of ensuring the discussions can progress by controlling communications and balancing the power between parties.

The mediator may be privy to confidential information from both parties. They will only share this with the other side if they are expressly authorised to do so by the disclosing party.

Why should you mediate?

There are many advantages to trying mediation in a dispute and the decision to do so should not solely be based on whether you think you have a good case or not.

Some reasons why you should consider mediating:-

Time: It can take years for claims to go from proceedings being issued to a final trial. Mediations can be organised in a matter of weeks.
Saves Costs: the cost of mediation is often significantly lower than the costs of pursuing a claim to a final trial.
Flexible and Informal: the court’s power to settle a dispute is limited but mediation allows the parties to settle the dispute in any way that works for them. The settlement can include things like letters of apology or agreements relating to future work – these things the court cannot order.
Private: mediation is confidential and carried out in private. The mediation day is “without prejudice” which means the court will not be aware of anything discussed during mediation. This encourages parties to be more open during mediation as everything is off the record. It can also be an attempt to reduce publicity on a dispute due to its private nature and each party agreeing to keep it confidential.
Amicable: mediation attempts to keep things friendly between parties and may encourage future relationships.
It is not court: Parties are often extremely nervous about the court process, or the prospect of cross examination. A mediation removes such concerns.

Halsey v Milton Keynes General NHS Trust

The courts are also keen to encourage parties to mediate wherever possible. Following the decision in Halsey it was held that a party can be punished on costs if they unreasonably refuse an offer to mediate. Usually costs follow the event, in that an unsuccessful party pays the successful party’s costs. However, if a successful party unreasonably refused to mediate the court does have discretion to reduce the amount of costs the successful party can recover.

If you have received an offer for mediation and are unsure whether to accept it or you would like us to assist you with an upcoming mediation, contact the dispute resolution team who will be able to advise you.

The information on this site about legal matters is provided as a general guide only. Although we try to ensure that all of the information on this site is accurate and up to date, this cannot be guaranteed. The information on this site should not be relied upon or construed as constituting legal advice and Howes Percival LLP disclaims liability in relation to its use. You should seek appropriate legal advice before taking or refraining from taking any action.

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