I’ve seen the light

Government websites are not obvious places to go for a slug of good common sense but try this one:

www.dca.gov.uk/civil/adr/adrmon05.pdf. It is all about the use of mediation by government agencies to resolve disputes.

The lord chancellor said in 2001 that he would consider using alternative dispute resolution, which normally means mediation, in all suitable cases. There has since been steady growth in mediation. During the past 12 months, government departments and the like have used mediation in 229 cases, reached settlement in 79% of them, and thereby saved an estimated £14.6m.

The report on the website gives brief details of the sort of cases that have been resolved. They are varied, ranging from mistakes in the registration of title to land to claims under the Disability Discrimination Act and a complaint against HM Customs for the wrongful seizure of a vehicle. There are several commercial disputes mentioned, including ones that sound similar to those common in construction.

This is a typical example. The Ministry of Defence was involved in a procurement dispute that had been referred to arbitration. A mediation was arranged and ran for two days. There was no settlement but the gap was closed and the case was settled after further direct negotiation. An eight-week arbitration hearing was avoided and the cost saving was estimated to be between £1.5 and £2m. In a case involving fire damage, with a large number of parties involved, a mediation saved an estimated £150,000 in costs and more than that in the amount of damages paid.

I used to be sceptical about this mediation business. After all, if the parties want to settle they can sit down and negotiate without paying a mediator. But I have been involved in several recently that have changed my view.

The first surprise was a mediation about a leisure centre. The employer and the contractor could not agree. There were disputes about variations, design responsibility, prices, measure, extensions of time, delay and disruption costs and what day of the week it was. Someone suggested having a mediation about extension of time, which was identified as a key issue. We all thought it would get nowhere but agreed to have a go. We gathered in an office in London first thing in the morning. Both parties outlined their case, with no new points being made. Then we moved into separate rooms and the mediator had chats with each of us. By lunchtime we had achieved nothing. The afternoon ticked by. We achieved nothing at all until about teatime, when someone – I can’t remember who – made a proposal to settle the time issue. It was rejected but a counter-offer was made. By 8pm we had settled all the disputes, including those that were not the subject of the mediation.

A little while later, two solicitors asked me to be a mediator. I told them I hadn’t done it before and was not formally trained. It didn’t matter, they said. It was all a waste of time because the case wouldn’t settle, but the judge had said that he would not fix a trial date until they had tried. The mediation broke down, apparently having achieved nothing, but in a week the parties had settled. I counted that as a result.

There is quite a range of styles among mediators. Some adopt a John Wayne approach, telling the parties that they will not be allowed to leave the building without a deal being done. They tell you – in private, of course – that your case has no chance of success, and then make similar comment to the other side about their case. Others ooze charm and sympathy to both sides but drone on in such dull tones that the parties will agree to anything to end the tedium. Both approaches, and several somewhere in the middle, seem to achieve success in a high proportion of cases.

Of course it doesn’t always work, and if it achieves nothing it will have been an expensive exercise.

But if in 79% of cases it avoids months of lawyering and uncertainty followed by days or weeks of monstrously expensive hearing it must be worth a try. The government certainly thinks so.