Thus, as I see it, mediation too is an integral part of litigation, and not simply ancillary to it. Many would say, echoing Jane Austen’s famous comment about single men and large fortunes, that it is, or at least should be, a truth universally known that mediation is and must play a fundamental and integral role in our litigation culture.

Lord Clarke referred to his speech at the Civil Mediation Council conference last year (the Birmingham speech) which I have written about before in separate posts. He summarised it as follows:

1) Mediation is a good thing because it helps to engender settlement and “only a fool” does not want to settle.
2) The courts should encourage it.
3) Mediation should not be permitted to give rise to satellite litigation because satellite litigation is one of the evils of civil litigation, as the years of wasted time and cost involved in applications to strike out for want of prosecution show.
4) The courts may well have the power under the CPR as they stand to direct mediation.
5) The reason why mediation is not used as much as it might be (if it is not) is lack of education. What is required is education of judges, lawyers (both solicitors and barristers) and, perhaps most important, repeat clients such as liability underwriters. Put another way: education, education, education.

He then turned his attention to the views expressed by Dame Hazel Genn in the Hamlyn lecture last year. He says she expressed a fear that the civil justice system was being traduced by the promotion of ADR and mediation.He believes her views should be considered carefully once the lectures are published. However in his opinion the existence and role of the courts is not threatened by ADR in general or mediation in particular. Mediation is an important adjunct to the role of the courts – an important supplement and should be made available to all (my emphasis).

Mediation was not made a compulsory element of the litigation process following the Woolf reforms and has never been seen as a panacea or replacement of the citizens’ right to determination by an independent judiciary. What came out of the Woolf review and the Heilbron/Hodge report commissioned jointly by The Law Society and The Bar Council before it were

recommendations as to ADR (and thus mediation) were by way of providing options for litigants, alternatives to formal litigation, while rendering the formal litigation process more accessible and efficient.

Finally there can now be no doubt that the Master of the Rolls, no less, believes the courts have the powers to go beyond even an Ungley Order and actually order parties to mediate.

First of all, the CPR, through the overriding objective and the general case management power set out in CPR 1.3(e) must manage cases by encouraging parties to use ADR and facilitating its use if such is appropriate. Equally, CPR 3(2)(m) provides the court with the general case management power take any other step or make any other order in order to further the overriding objective and properly manage individual cases. Without breaching my self-denying ordinance not to refer to Halsey again this evening, I cannot but think that this provides the power, in an appropriate case and consistently with the duty imposed on the court under CPR 1.3(e), to direct parties to enter into mediation or ADR procedures in appropriate cases. In considering whether to exercise these powers, it seems to me, that the court will have to consider a number of questions. So will the parties and their advisors because of the duty imposed by CPR 1.3 to assist the court to further the overriding objective. Thus both the court and the parties are under a duty to consider whether it is proportionate to pursue their claim through the formal litigation process or whether a mediated settlement might a just way of dealing with their case. Equally, the question will have to be asked whether it is proportionate to other litigants for their particular claim, to be pursued through formal litigation, or whether it would improve access to justice for other litigants if they mediated their case: see CPR 1.1(2)(e).

Lawyers – are you making this integral feature of the litigation process available to your clients?

* “It was the best of times, it was the worst of times…” is the other one.

Thanks to Current Awareness from the Inner Temple Library for reporting this speech.

Related posts:

1. Only madmen don’t want to negotiate.
2. Lord Chief Justice speech to Civil Mediation Council

Judges have the power to order mediation.

The Master of the Rolls expressed his view that case management judges already have the power to order parties to mediate under the CPR. His preferred approach is for the court and the parties to properly consider if mediation is appropriate at an early stage of proceedings and refer suitable cases. He sited with approval the so called “Ungley Order” as discussed by Lord Dyson in Halsey v Milton Keynes General NHS Trust.

He is against costs sanctions being applied to parties who unreasonably refuse to mediate – which is the current situation – see Dunnett v Railtrack PLC. Sir Anthony does not want to encourage a new wave of costs satellite litigation.

For a more detailed discussion of this issue see Should the court order Mediation?

Related posts:

1. “It is a truth universally acknowledged…”
2. Should courts order Mediation?

“There are too many calamitous neighbour disputes in the courts. Greater use should be made of the services of local mediators, who have specialist legal and surveying skills and are experienced in alternative dispute resolution. An attempt at mediation should be made right at the beginning of the dispute and certainly well before things turn nasty and become expensive. By the time neighbours get to court it is often too late for court-based ADR and mediation schemes to have much impact. Litigation hardens attitudes. Costs become an additional aggravating issue. Almost by its own momentum the case that cried out for compromise moves onwards and upwards to a conclusion that is disastrous for one of the parties, possibly for both.”

Lawyers have a clearly stated professional duty to advise their clients of the availability of mediation as a way to resolve such as dispute but they can not force their clients to accept this advice.

Maybe we should re-word an old adage and include it in the client care letter - “a boundary litigant and his money are easily parted.”

Related posts:

1. Do Solicitors have a duty to advise about Mediation?
2. What should I tell my client about Mediation?

“Relative to the sums involved the costs are enormous. Linbrooke’s costs below were estimated to be £32,700 before the costs of an 8 day trial. Mr. Peakman’s costs were some £18,000. According to the Statement of Costs supplied to this court Mr Peakman’s costs of his appeal (taking into account the uplift on a conditional fee agreement) amount to £30,481.80. This is deeply troubling, not only for this case but as a reflection of the least satisfactory aspect of our civil justice system. It makes no sense at all for over £100,000 and 9 days (including the appeal) to be spent on what was a perfectly straightforward piece of litigation about a few thousand pounds.”

So the partially “successful” defendant received £265 compensation but had to pay its own costs and half of the claimant’s, a figure of something like £75,000. The claimant got off more lightly – he only had about £25,000 to pay!

To quote Lord Ward in Egan v Motor Services (Bath) Ltd 2007“this case cries out for mediation”. Actually it screams out for mediation. Why was it never tried? Did either party suggest it? Why was the Court of Appeal’s recommendation to use it not taken up? Maybe the parties will post an explanation here …

The likelihood is that had they appointed a competent mediator then they would have been assisted in negotiating a settlement that they could both live with. They would have avoided huge wasted expense (they were in court for 8 days!). At the very least the process of reality testing and information exchange that goes on in mediation would have made clear what the judge ultimately found about the counter-claim.

Related posts:

1. Indemnity costs for failing to mediate
2. Mediation and Lord Justice Jackson's costs review

There are increasing pressures on lawyers to, at the very least consider mediation and other forms of alternative dispute resolution. It comes from the CPR, the new Solicitors’ Code of Conduct and from judicial statements on the costs consequences of failing to attempt mediation. You only have to read as far as Rule 1.4 of the CPR to discover that the use of alternative dispute resolution is part of the court’s duty to manage cases. That active case management includes at Part 1.4 (e) “encouraging the parties to use an alternative dispute resolution  procedure if the court considers that appropriate and facilitating the use of such procedure.” 

Paragraph 4.7 of the Pre-Action Protocols Practice Direction states “The parties should consider whether some form of alternative dispute resolution procedure would be more suitable than litigation, and if so, endeavour to agree which form to adopt. Both the Claimant and Defendant may be required by the Court to provide evidence that alternative means of resolving their dispute were considered. The Courts take the view that litigation should be a last resort, and that claims should not be issued prematurely when a settlement is still actively being explored. Parties are warned that if this paragraph is not followed then the court must have regard to such conduct when determining costs;”

The first point to note is that litigation should be a last resort. If it is unavoidable then there is a continuing obligation to consider mediation throughout the process, both by the court in its management of the claim and by the lawyers.

The Solicitors’ Code of Conduct 2007 provides in rule 2.02(1)(b) (Client Care) an obligation on solicitors to “give the client a clear explanation of the issues involved and the options available to the client;” Guidance is given in the notes to rule 2 at paragraph 15 “When considering the options available to the client, if the matter relates to a dispute between your client and a third party, you should discuss whether mediation or some other alternative dispute resolution (ADR) procedure may be more appropriate than litigation, arbitration or other formal processes. There may be costs sanctions if a party refuses ADR – see Halsey v Milton Keynes NHS Trust and Steel and Joy [2004] EWCA (Civ) 576.

The guidance brings us to the final pressure to at least consider mediation, namely that of costs sanctions against parties who refuse to mediate. The refusing party did not in fact face any costs penalties in that case because on the facts it was reasonable not to attempt to mediate. The judgment sets out clear guidance on this and should be read carefully before an offer to mediate is turned down. In his judgment in that case Dyson LJ says “The value and importance of ADR have been established within a remarkably short time. All members of the legal profession who conduct litigation should now routinely consider with their clients whether their disputes are suitable for ADR.”

Dyson LJ goes on to say that the courts will not compel parties to mediate. Mediation is and should always remain a voluntary process which is very much part of its success.

It is apparent then that there is considerable pressure from different sources to lead parties to mediation. Lawyers may well be sceptical of the reasons for this. The Ministry of Justice is no doubt keen to reduce court costs and the backlog of cases. The lawyer’s first consideration however will be his or her client. How, if it all, can mediation benefit them?

The proponents of mediation point to a number of factors in answer to this question. Cost is the first consideration. A mediation which takes place very shortly before a trial may not in fact produce a great saving in legal costs unless a lengthy trial is anticipated. Conversely the earlier in the proceedings the mediation takes place the greater the potential saving and the costs saving can be substantial. Legal costs are not the only costs clients incur. Time away from running a business or from a job is a cost to a client. If witnesses from the same company are needed then their time is a further cost. Early settlement of a claim, however achieved, will reduce this burden and create a huge saving in management and personnel time.

Mediations can be arranged at short notice once the parties have agreed to go ahead. They very rarely last more than one day. The mediation itself is often said to provide the parties, particularly claimants, their equivalent to a day in court and the opportunity for them to see their lawyer acting on there behalf at first hand. The range of solutions to a dispute available at a mediation are far wider than solutions that a court can impose. From a simple apology to an agreement dealing with the future trading relationship of the parties. A mediation can restore a previously mutually beneficial trading relationship which for both parties may well be more important than the issue in dispute. The range of solutions is only limited by the imaginations and wishes of the parties.

One important task of the mediator is to educate the parties about each others’ case. That is to say the mediator can help to clarify the case that lies behind the pleadings, or simply clarify the pleadings. Apparent weaknesses in an opponent’s case may not be weakness once there is a clear understanding of that case. This may be from an explanation of a document, further disclosure or just seeing at first hand the quality of witness an opponent would be in court.

Any solution will not have been imposed. It will be joint solution to a joint problem worked out and agreed by the parties. The mediator does not provide the answers. He or she assists the parties to solve their dispute in their own way. Brooke LJ put it this way in Dunnett v Railtrack plc [2002] EWCA Civ 303:

“Skilled mediators are now able to achieve results satisfactory to both parties in many cases which are quite beyond the power of lawyers and courts to achieve. This court has knowledge of cases where intense feelings have arisen, for instance in relation to clinical negligence claims. But when the parties are brought together on neutral soil with a skilled mediator to help them resolve their differences, it may very well be that the mediator is able to achieve a result by which the parties shake hands at the end and feel that they have gone away having settled the dispute on terms with which they are happy to live. A mediator may be able to provide solutions which are beyond the powers of the court to provide.”

Most mediations follow a similar pattern. The parties meet together in a joint room where the mediator will explain the procedure and then give each side the opportunity to make a short statement about the case. The mediator will insist that this uninterrupted. After these preliminaries the parties will retire to separate private rooms where they will be visited in turn by the mediator. Anything they say in those rooms is treated with the strictest confidence by the mediator which allows a full and frank examination of the case and an opportunity to explore all the possible solutions to the problem. The mediator will only pass on information to the other side when authority has been given and the mediator considers that passing on this information will assist the parties in reaching an agreement.

The ultimate aim of course is to achieve a settlement that both parties are prepared to agree to in writing. The lawyers will be responsible for drafting that agreement once the principles and details have been agreed. Mediation, entered into freely by both parties, does have a high success rate. Different providers will quote different figures but the range is usually between 70% and 80%. Many mediations which do not provide a result on the day often help to narrow issues and this frequently leads to a settlement following shortly afterwards.

ADR processes including mediation do not offer a panacea to all disputes and a large number of cases will be unsuitable for mediation but there is clearly now an obligation on lawyers to at least consider alternatives to litigation as a matter of routine and there may be severe consequences for failing to do so.

Related posts:

1. What should I tell my client about Mediation?
2. Do Solicitors have a duty to advise about Mediation?