If alternative dispute resolution were better understood, it would be more widely used. That is the main conclusion to be drawn from the responses to the Lord Chancellor’s Department discussion paper on ADR, which was issued in November 1999 to 3000 lawyers, ADR providers and consumers.
The department is promoting ADR as part of its access to justice campaign. This aims to ensure that “where people need help [to resolve disputes], there are effective solutions that are proportionate to the issues at stake”. One respondent to the paper – a lawyer – deplored the fact that the department had issued so much material in favour of mediation, saying: “It’s as though the Department of Health were to issue leaflets advocating aromatherapy.”
For this article, I am going to assume that the term ADR is interchangeable with mediation. Other terms such as early neutral evaluation or conciliation are really only nuances. In fact, the definition of ADR includes judicial processes that result in an imposed decision, such as arbitration, expert determination and adjudication. However, in the common usage, ADR and mediation are coming to mean the same thing.
Mediation is swift, cheap and highly successful. Estimates vary, but CEDR (a charitable organisation founded in 1990 and the pre-eminent promoter of mediation in the UK) claims to have an average success rate of 82%. This figure is supported by other surveys from the USA. The construction industry is CEDR’s single biggest user – it makes up 12% of cases referred – but this still amounts to only about 55 a year. Of course, there are many mediations that do not involve CEDR, but, it is submitted, mediation has still not really taken off.
There are two principal differences between mediation and all forms of dispute resolution that result in an imposed decision. Mediation is not strictly legal and there is plenty of room for the parties to raise issues of commercial reality. That is not to say that legal issues are not important or do not play a decisive part, but commercial drivers such as the need to preserve business relationships and the commercial background to the negotiation of the contract in dispute are given weight.
The second distinguishing feature is that the parties are very much in control in mediation; the feeling of having stepped aboard a rollercoaster that accompanies legal proceedings is absent. The timetable, the format of the proceedings and the contribution of each person present are in the hands of the parties.
How to mediate
The format of mediation is entirely up to the parties, but typically statements of case and defence are exchanged before the mediation hearing. Documents and witness statements will support these. On the day of the mediation, each party will usually present its case in an open session. The parties will then retire to separate rooms and the mediator will shuttle between them, improving his understanding of each party’s position and pointing out the weaknesses in them out of the hearing of its opponents.
Try to hold back some evidence until the opening, to throw the other side off balance. Not politically correct, but this is still a dispute
Preparation is the key to success in mediation. The success rate is so high that the parties must assume that the mediation is going to be successful and that the only issues are quantum and terms. It is a bad mistake to enter into the process half-heartedly. The party that best persuades the mediator of the strength of its position will come out best. Of course, mediation is a “win/win” process, but some win more than others.
Work out in advance what irrecoverable legal and expert costs you and the other side face if the dispute goes to trial. The mediator will deduct those costs from your view of what your entitlement should be, so the more convincing your assessment, the more likely he or she is to accept your figures rather than your opponent’s.
The opening is important. It may be the only chance the parties get to hear one another’s case in front of the mediator, so make it no more than 20 minutes and concentrate on the big points. There is no time for detail in mediation and it involves bargaining, so be prepared to surrender expendable points in order to preserve the important ones. Think about holding back some evidence or argument until the opening so as to throw the other side off balance from the beginning. This may not be in the spirit of political correctness that pervades ADR but, after all, this is still a dispute.
Stamina is essential. Settlement usually happens at the end of a long bruising day and the parties need to be very alert when the terms are being set down. Do not allow anyone to leave until the settlement is drawn up and signed, unless, of course, some terms remain to be resolved, in which case do not sign anything. Mediations often settle within a few days after an apparently unsuccessful hearing, and that period of contemplation is beneficial.
Are there disputes that can’t be mediated?
Although many types of cases are cited as unsuitable for mediation, most do not stand up to scrutiny. For example, cases involving a point of law can be mediated by an eminent lawyer; if the parties are not speaking to one another, then the mediator can bridge the gap.
Conceivably, it is inadvisable to mediate if one party is confident that its opponent has no case in law. However, that party should be prepared to have its confidence tested.
Certain public policy issues may come to the fore if mediation becomes widespread. For example, “test” cases, which develop the law or affect wider groups in the population, such as employees or tenants, might not appear before the courts. But this is a difficult argument to sustain given the haphazard manner in which the law develops. We are not really reliant on a few litigious maniacs with limitless funds to develop the law, and businessmen do not bring their disputes to the courts with a view to benefiting the wider population. The law will not fall into disuse if mediation becomes widespread. It will become more widely used in the context of commercial dispute resolution.
Christopher Hill is managing partner of solicitor Norton Rose’s construction and engineering group.