You can’t bully people into mediation. Both parties must have a genuine desire to settle the dispute. And that’s one of the reasons why, in construction, it has never really taken off
Do you sometimes get the feeling that in the building disputes business, mediation is bumping along the bottom? Mind you, I sometimes get the same feeling about adjudication, arbitration and litigation. Let me tell you about a recent quarrel in court about mediation, or rather, the lack of it. It’s not a building case, but that makes no odds; it came to Mr Justice Akenhead, chief judge in the Technology and Construction Court. So it’s important for your construction disputes to know what gives in that camp.
Mediation as we know it today, in the sense of a negotiation with knobs on, came to construction in June 1990. That’s when CEDR (Centre for Effective Dispute Resolution) had its inaugural party. It told us about how effective its effective system would be for a building world and, come to think of it, the world. Mind you, it didn’t have much else to compete with. Litigation and arbitration in 1990 were, er well, ineffective, or rather, a hopeless mess.
I liked this mediation malarkey. Much like having a new Archbishop of Canterbury, it somehow gave hope to a lost cause
I liked this mediation malarkey. Much like having a new Archbishop of Canterbury, it somehow gave hope to a lost cause. But, damn it, mediation just didn’t get lift-off in the building world. In the first five years it was hardly used.
Three immediate snags got in the way. First, mediation is supposed to have the ingredient of willing parties. All of the parties have to come to the table with a will to settle, to compromise. But the strategy in litigation and arbitration is to wear the other bloke down, exhaust the blighter into a dithering lump, then bayonet the injured soul. It was much less fun to arrange a mediation. Second, nobody could compel the other party to come and play mediation. Third, all of it could easily be a waste of time and money because nobody sat in the middle to make a binding decision.
Another odd snag got in the way. Folk crept out of the woodwork to become Trainers of Mediators. “Roll up, roll up, and pay your thousands of pounds to become a trained mediator.” There were half hints that once you shelled out for a Certificate of Competence, the appointments would roll in. They didn’t.
And some of that training was skew-whiff. You had to pretend you eschewed “evaluative mediating” and adored “facilitative mediating”. Otherwise you got the thumbs-down. And when some of us did come to a “qualified mediator” we found it was hopeless to have a “facilitator only” mediator when it really needed someone to kick one of the parties, if not all, in the pants - or worse. More bumping along the bottom, if you see what I mean.
In this ADS case, the argument for a penalty discount failed. The judge accepted that a mediation was unlikely to succeed. Remember, the claimant wanted $16m
Then, oh dear, the courts pressed us to use mediation. And that leads me to this latest case. ADS sued EMS Global for $16m and lost hands down. The loser properly accepted that it was liable for the not insignificant legal costs of the opponent. But there is a but. The loser wanted
a reduction in the winner’s costs entitlement “of at least 50%”. The reason for this sanction was that the court ought to take a dim view
of the winner’s unwillingness to take part in a mediation.
That argument has come out of a case eight years ago when the Court of Appeal took umbrage at the winner’s attitude towards mediating. The winner said “no thanks” to the idea. So the court reduced its legal costs recovery. This was a sort of policy decision by the court. The idea was to get people into mediation and avoid the costs of litigation. Mediators rubbed their hands. It would push people into mediation.
And for a while it did. Folk were coming to mediators so as not to be thumped in costs for refusing. Those mediator training courses thrived again.
But the truth is that the commercial world felt it was being collared, some say bullied, by this policy. Believe me, mediation only works and works well when there are consenting adults coming to the mediation table.
In this ADS case, the argument for a penalty discount failed. The judge accepted that a mediation was unlikely to succeed. Remember, the claimant wanted $16m. The defendant was nowhere near willing to pay up. In the event, nothing was payable anyway. It’s not hindsight that is the test. It’s not that the defendant was proved right. But if it’s entirely plain that the parties are hopelessly apart, forget mediation.
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings, Temple