05 September 2013
How a collaborative approach can cut costs
The widely-reported Jackson reforms, which came into force in April 2013, called for increased cost certainty and greater proportionality of costs during litigation cases.
As a result, more people are turning to mediation as a means of settling disputes and litigators are being encouraged to behave in a more collaborative way. In some cases, parties are being penalised in costs if they refuse to attend mediation, even if they subsequently win in court.
As a mediation expert who has handled well over 50 mediations and achieved a high rate of settlement, Nick Hallchurch, partner in litigation and dispute resolution, explains why mediation is such an effective way to settle disputes.
“Mediation can be an extremely cost effective way of resolving disputes, not least because it provides a much cleverer, creative environment in which to discuss the issues,” said Nick.
“Mediation is an opportunity for the parties to truly investigate the real issues and their real objectives with the other side, using the impartiality of the mediator whose sole function is to facilitate them to reach a settlement.
“As a mediator you have the key advantage of being able to recognise if and when there is any overlap between the parties which they cannot see themselves, but a good mediator will continue to allow the parties to make their own progress. It’s essential not to drive the parties towards an end goal.”
It is, he says, important to realise that a mediator is not a judge and must be wary of expressing any views about the case.
Among the notable mediations Nick has been involved in was a civil claim for damages by a well-known national company against its suppliers.
With both parties present for the mediation session in what he describes as an “icy” atmosphere, Nick suggested that the two clients might want to take some time out together to see if they could find a solution.
Two hours of talking later and they had done so, reaching an agreement which was then documented by the lawyers.
“It is unlikely that the parties would have had the opportunity to meet together to discuss settlement without mediation, meaning settlement may not otherwise have been achieved until much later and at a much greater cost to both sides,” said Nick.
“There are many misconceptions about mediation, particularly amongst lawyers and even the courts are making the mistake of beginning to classify the kinds of cases which might be suitable for mediation or not.
“They are also trying to assess the likely outcome of the mediation in cases where mediation was refused by one party. In my view, that is dangerous ground.
“If anything, in my experience the simplest cases can turn out to be the most difficult and the most complicated or high value cases can turn out to be the simplest. This is both the beauty and conundrum of mediation – people have to trust it and give it a go.”
The benefits of mediation
• Cost and speed – mediation takes place in a day or less, while the cost and timing of litigation can be substantial. A mediation session can be organised within two weeks
• Voluntary and non-binding – the clients are in control. In a court case, the judge decides and the decision may go against them
• Without prejudice and confidential – mediation allows free off the record discussions without prejudicing the parties’ position on the record • Direct involvement – the parties involved are at the heart of the mediation process
• Flexibility – mediation allows the parties to agree wide ranging terms with any outcome suiting both parties
• Issues investigated – it provides the opportunity to investigate all relevant issues, including the personal issues of the parties as well as the business ones
• Maintaining relationships – both parties are far more likely to maintain business relationships following a successful mediation where misunderstandings can be ironed out and trust restored