FREE CHAPTER from ‘Commercial Mediation – A Practical Guide’ by Nick Carr

CHAPTER TWO
THE ANATOMY OF
MEDIATION

2.01 What follows in this chapter is a general outline of the path normally taken in mediation but it must be remembered that firstly, the parties are in charge of the process, so they can change it to suit their needs, and secondly, flexibility is integral to the process.

2.02 Many of the stages summarised here are explored in greater detail later in this book.

When to mediate

2.03 Once a dispute has crystallised it is appropriate to mediate. In potential court proceedings the parties normally follow the relevant pre-action protocol under the CPR. In general the parties are obliged to:

  1. Set out the details of the claim (and any counterclaim) in writing;

  2. Respond to the allegations;

  3. Disclose key documents; and

  4. Consider whether negotiation or other form of ADR might allow them to settle the dispute without resort to court action.

2.04 Once that stage has been reached there is real merit in mediating. It may be possible to start the process at an earlier stage (adopting a truncated version of the protocol steps) or sometimes appropriate to defer for a while (for example, if expert evidence is crucial to issues of liability or quantum or one party is not forthcoming in providing required evidence).

Mediator selection

2.05 If there is a contract between the parties it may provide for the mediation procedure and mediator selection. Otherwise, there are two main ways of appointing a mediator. The parties can approach one directly or use a mediator provider or panel. Either way, as this is a consensual process, there will need to be agreement on who should be selected.

Preparation

2.06 This should never be underestimated and it is a team effort: client, lawyer and any other relevant persons, such as experts.

2.07 You will have an expectation based on the merits, both commercial and legal, but remember that negotiation involves give and take so do not be too prescriptive. Plan your strategy, although be prepared to be flexible.

2.08 Sense check your wishes with how the other party (or parties) are likely to react and how the case could play out in court or arbitration.

2.09 Work out who will be at the mediation. At least one person there should have authority to settle. Do you really need counsel or the expert? Will they assist the process? Who will do the talking in any open session with the mediator and other party present? It does not need to be the lawyer.

Before the day

2.10 Fix the date and liaise with the mediator on the arrangements. There will be a timeline agreed with the mediator for exchanging and submitting position papers and any agreed core bundle of documents.

2.11 A venue will need to be booked and travel and accommodation arrangements made, as appropriate.

2.12 Aside from the practical arrangements, it is always wise to engage with the mediator before the day and most, if not all mediators, will make contact, usually by phone. This gives you an opportunity to let the mediator know anything that is relevant but not in the position paper, such as awkward relationships between the key principals or commercial trading factors. Anything that gives the mediator a better picture can only help.

On the day

2.13 Turn up in good time. Mediations normally start around 9.30 or 10 a.m. Find your room and get comfortable. There is usually a larger room for joint meetings and smaller break out rooms for the parties.

2.14 The mediator will normally see you privately to make an introduction and possibly outline the intended process for the day. The mediation agreement may be signed at this stage.

2.15 This is usually followed by a joint session where the mediator will reinforce the basic ground rules that may have been discussed in any earlier chat. Confidentiality will be explained. The overall process is confidential (and this is written into the mediation agreement). Next, it will be emphasised that anything the mediator is told in a private session with one party will not be divulged to the other without permission.

2.16 The mediator is also likely to stress that he or she is there to help and facilitate a settlement but will not make a decision.

2.17 Finally, it will be made clear that the mediation is non-binding and no deal is done until the parties reach agreement and (usually) sign a document to set out the terms of the settlement. As the process is voluntary either party can withdraw at any time.

2.18 If the mediation agreement was not signed earlier it will be signed now.

2.19 Each party then makes a short opening speech. It is better not to reiterate what is in the position paper. Everyone there should have read it by this stage. Key is to try to get your position across to the person who really matters – the principal decision maker on the other side.

2.20 After this opening session, unless further discussion is likely to serve any useful purpose, the parties normally decamp to their rooms and the mediator will start the private sessions (caucus). The shape and approach to these discussions will vary depending on the style adopted by the mediator, the nature of the dispute, the characters involved and their positions on the issues and the process generally.

2.21 At some stage further joint meetings or discrete meetings of, say lawyers or experts or principals, are likely. There will be times when little appears to be happening. The truth is that the mediator will be with the other party and not sat alone reading the newspaper.

2.22 Hopefully a deal will be brokered at some stage. Remember, the odds are much better than ‘evens’ that this will happen.

2.23 A document will be prepared setting out the terms and creating a binding contract when signed by the parties. This can be a frustrating time because the principals see the day as over whereas the lawyers may have an hour or two of drafting to do before it can all be signed off.

2.24 If there is no deal, all is not lost. Statistics show that a fair proportion of those disputes will settle shortly after the day. The mediator is likely to stay in touch and assist in that process.

2.25 If nothing else, you will now have a better idea of where the other party is coming from and what is driving them. Seeing and hearing someone is always more informative than reading their case in sterile court or arbitration documents. And, at least you know you have tried to settle the dispute.

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